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while, under the circumstances of this conduct of the practical administration of case, a sale of all of the property of a the affairs of the Amalgamated and Anacorporation could be authorized by the conda Companies, and that he very cerowners of less than all of the stock, for tainly was in control of the boards of an adequate consideration, it must be for directors of the companies which were money only, for the reason that the parties to the sale of the Alice properties. minority stockholders may not lawfully The relation of directors to corporations be compelled to accept a change of invest is of such a fiduciary nature that transment made for them by others, or to elect actions between boards having common between losing their interests or entering members are regarded as jealously by the a new company.

law as are personal dealings between a But it has been suggested that this rule, director and his corporation; and where also, should be subject to the exception the fairness of such transactions is chalthat when stock which has an established lenged, the burden is upon those who market value is taken in exchange for would maintain them to show their entire corporation property, it should be treated fairness; and where a sale is involved, the as the equivalent of money, and that a full adequacy of the consideration. Espesale otherwise valid should be sustained. cially is this true where a common director Noyes, Intercorporate Relations, $ 120, is dominating in influence or in character. and cases cited. We approve the sound. This court has been consistently emphatic ness of such an exception. It would be in the application of this rule, which, it a reproach to the law to invalidate a sale has declared, is founded in soundest otherwise valid because not made for morality, and we now add, in the soundest money, when it is made for stock which business policy. Twin-Lick Oil Co. v. a stockholder, receiving it, may at once, Marbury, 91 U. S. 587, 588, 23 L. ed. in the New York or other general market, 329, 330, 3 Mor. Min. Rep. 688; Thomas convert into an adequate cash consider- v. Brownville, Ft. K. & P. R. Co. 109 ation for what his holdings were in the U. S. 522, 27 L. ed. 1018, 3 Sup. Ct. Rep. corporate property.

315; Wardell v. Union P. R. Co. 103 U. S. In this case the trial judge determined 651, 658, 26 L. ed. 509, 511, 7 Mor. Min. without difficulty the market value of the Rep. 144; Corsicana Nat. Bank v. Johnstock received in payment for the Alice son, 251 U. S. 68, 90, 64 L. ed. 141, 155, properties, and it is, of course, public 40 Sup. Ct. Rep. 82. knowledge that there was a wide and gen- [600] The district court found that eral market for Anaconda stock. This the price agreed to be paid by the third contention of appellant must be de- Anaconda Company was not an adenied.

quate one, and the circuit court of apFinally, it is argued that the sale of peals refused to disturb that finding. the Alice properties is void because negoWith this conclusion we agree, apply. tiated and made by two boards of directors ing the settled rule of this court that, having a member in common, and for an in suits in equity, a concurrent findinadequate consideration.

ing by two courts on a question of fact John D. Ryan, at the time of the sale, will be accepted unless it be clear that was president and a director of the their conclusion is erroneous. Baker Alice Company; he was also a director v. Schofield, 243 U. S. 114, 118, 61 L. ed. [599] and general manager of the Ana- 626, 630, 37 Sup. Ct. Rep. 333, and cases conda Company, and had been its presi- cited. dent from 1903 to 1909; he was elected But the district court, notwithstanding a director and president of the Amal- his finding of inadequacy of price, did gamated Copper Company in 1909, and not set the sale aside, but ordered that had been a director of each of the the Alice properties should be offered at subsidiary companies of the combina- public auction by a master, and that if tion prior to that year. In 1905 he no bid should be received for an amount obtained an option on the majority of greater than that which the Anaconda the Alice stock for $600,000, and carried Company had agreed to pay, the sale it until it was purchased by the Butte should be confirmed. The offer at public Coalition Company, an Amalgamated sub- sale was made, no bid was received, and sidiary, of which he was a director, and the private sale to the Anaconda Comthat company voted a majority of the pany was thereupon confirmed. The cirAlice stock in favor of the disputed sale. cuit court of appeals, by a divided court,

The record shows beyond controversy affirmed that decree. that Ryan was the representative of the Both courts relied upon Mason v. chief investors in the enterprise involved Pewabic Min. Co. 133 U. S. 50, 33 L. ed. in this litigation, that he dominated the 1524, 10 Sup. Ct. Rep. 224, as authority

for approving the sale for a price which / sale was confirmed without any reference they found was inadequate, after a greater being made to the action ordered if the amount could not be obtained for the upset price should not be obtained, and property when offered at public sale, and we must conclude that that part of the in this we think they fell into error. decree was not considered by this court.

In the Pewabic Case the charter period As an original proposition, we cannot of the corporation having expired, a ma- think that the amount offered for propjority of the stockholders favored the erty at a public sale for cash is such a organization of a new company, with the measure of its value that the failure to same amount of capital stock as the old, obtain a bid at such sale for more sliould to take over the whole of its property, be accepted by courts as a sufficient reason and that there should be allotted to the for aflirming a sale for a price which stockholders the same number of shares they [602] found, on other evidence, to which they held in the old company, or, be inadequate. In business life forced in the alternative, that those who did not sales for cash are such a last resort for desire the stock should receive the value obtaining money that a sale “under the of their shares, computed on a basis of hammer” is synonymous with a sale at a $50,000 for the entire property of the sacrifice, and prices obtained at such sales company. The minority stockholders have usually been rejected by courts when favored sale of the property and division tendered as evidence of value. of the proceeds. [601] On the bill In this case, from evidence as to the filed by the minority stockholders the character of the Alice properties, their circuit court enjoined the transfer to location and surroundings, and from the the new company, and ordered a public opinions of experts, the trial court consale of the property by a master, with cluded that the price paid for them was a proviso in the decree that if no bids inadequate, and we cannot doubt that were offered in excess of $50,000 above from like or other evidence a more trustthe debts of the company, then the worthy conclusion could be obtained as proposal of the majority should be car- to what their value was than would be ried into effect under the direction of derived from an offer at a public sale the master. Before the property was for cash. offered for sale each of the parties ap- To this it must be added that the resolupealed to this court from separate parts tions of the Alice Company to sell and of the decree. On that appeal, in addition of the Anaconda Company to purchase to a question of accounting, not material were for a price named, to be paid and here, this court considered and decided received in designated stock. Neither only the question whether, on such a wind- contemplated a public offering of the ing up of the affairs of a corporation, properties, and that a sale should be made the majority of the stockholders could at another price, greater than an amount lawfully compel the minority to either decreed by the court, if it should be take stock in a new company or accept offered. Under the pleadings the court for their stock a value to be fixed by the had power to confirm the sale if it was majority. No mention is made in the found to have been lawfully made, but opinion of the court of the alternative only upon the terms on which the parties character of the order of sale, and, al- bad contracted to make it; and when the though it was subsequently shown that the price was found to be inadequate, a decree price proposed was an inadequate one, should have been entered, vacating and there had not been any finding by the lower court that such was the fact when setting it aside, as prayed for by the

appellants. the case was decided here. It is probable that there was no objection to this

It results that the decree of the Circuit

ure of the decree. The minority stockholders, Court of Appeals must be reversed and praying, as they were, for a public sale, the case remanded to the District Court for obvious reasons would not object to for further proceedings in conformity it, and the contention of the majority was with this opinion. that no sale at all should be ordered, but Reversed and remanded. that their reorganization plan should be adopted. The decree of the circuit court Mr. Justice McReynolds concurs in the that the property should be sold at public result. 65 L, ed.

28

433

V.

(603) STATE OF OKLAHOMA, Com relief, is hereby denied, without prejuplainant,

dice.

The motion of C. J. Benson, William STATE OF TEXAS, Defendant; The Unit- Murdock, and James R. Armstrong, filed ed States of America, Intervener.

herein December 20, 1920, for an order (See S. C. Reporter's ed. 603-605.) requiring Frederic A. Delano, Esq., re

ceiver, to file an inventory of certain ma(No. 23, Original.]

terial and equipment purchased by him Motions submitted December 20, 1920, and and paid for out of the proceeds of the

January 3, 1921. Entered January 24, oil produced by him from certain premi1921.

ses in said motion described, and to acMr. W. A. Ledbetter for the Sinclair count for the value thereof; and requirOil & Gas Company, the Oklahoma ing said receiver to file forthwith an Petroleum & Gasolene Company, and for itemized statement of moneys charged C. J. Benson et al.

by him against certain wells, and a stateMr. Horace F. Baker for the South- ment of all sums of moneys realized by west Petroleum Company.

him from certain wells, and for other Mr. J. S. Flannery for the receiver.

relief, as in said motion specified, is here

by denied without prejudice. Orders announced by Mr. Justice Mc- Upon consideration of the motion of Kenna:

Southwest Petroleum Company, filed The Motion of the Sinclair Oil & Gas herein January 3, 1921, for an order diCompany, filed herein on December 20, recting Frederic A. Delano, Esq., receiver 1920, for an order to require Frederic A! herein, to return to said company, purDelano, Esq., receiver, to refund to it one suant to the order of June 7, 1920, a cersixteenth (1/16) of the proceeds of the tain well, known as receiver's well numoil produced from certain premises in said ber one hundred and eighty (180), togethmotion described, and heretofore deposit- er with the land appurtenant thereto and ed with said receiver pursuant to the the structures, equipment, and material order of this court, together with the in- pertaining to said well, and the reterest collected thereon by said receiver, sponse of the receiver to said motion, and to require said receiver to surrender filed January 5, 1921, and the reand pay to said Sinclair Oil & Gas Com- sponse of the United States, filed Janupany one sixteenth (1/16) of the oil or ary 22, 1921, it is ordered that said the proceeds thereof delivered to said re- receiver do return to said Southwest ceiver since the 15th day of October, Petroleum Company said well number 1920, is hereby denied, without preju- one hundred and eighty (180), which lies dice.

south of the south edge of the sand The petition of the Oklahoma Petro-bed of the Red river as it was on the 1st leum & Gasolene Company, filed herein day of April, 1920 (marked generally by on December 20, 1920, for an order the border line of vegetation along the requiring Frederic A.' Delano, Esq., edge of the flood plain), together with receiver, to file a statement of expenses the land appurtenant thereto, lying to incurred by him from May 16, 1920, the south of the south edge of the sand to July 1, 1920, in operating certain bed of said river, and the structures, wells designated in said petition, and equipment, and material pertaining to requiring said receiver to pay tó said said well, and the net proceeds of the company the proceeds of one-sixteenth production thereof that have [605] (1/16) of the oil produced from said come to the hands of said receiver, wells from April 1, 1920, to November less operating expenses and reservations, 15, 1920, and the interest collected by upon terms that said Southwest Petrosaid receiver upon said proceeds, and leum Company comply with the prorequiring said receiver to refund to said visions contained in the order of this company one third (3) of the three six- court, made June 7, 1920, respecting teenths (3/16) of the proceeds of the oil the return of certain lands lying south from said wells, paid to said receiver of the south edge of the sand bed of since November 15, 1920, and that said said river which were, on the 1st day company be not required hereafter to of April, 1920, in the possession of pay to said receiver more than two six- persons claiming under patents from the teenths (2/16) [604] of the oil and gas state of Texas, and not included in the produced from said ls, and for other / river-bed lands in said order defined.

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error.

NORTHERN TRUST COMPANY et al., Trus- EX PARTE: IN THE MATTER OF THOMAS

tees, etc., Plaintiffs in Error, v. ADOLPH Welsh, Petitioner. [No. —, Original.] H. EILERS et al. [No. 345.)

Motion for leave to file petition for a Error to district court-jurisdiction be- Writ of Mandamus herein. low.

Mr. Martin Conboy for petitioner. In Error to the District Court of the No appearance for respondent. United States for the District of Oregon. [608] October 11, 1920. Denied.

Mr. John Taylor Booz for plaintiffs in

Mr. Ralph R. Duniway for defendants MARY L. GREER CONKLIN, Appellant, v. in error.

GEORGE H. CONKLIN * et al. [No. 192.] October 11, 1920. Per Curiam: Dis- Appeal—from district court-frivolous missed for want of jurisdiction upon the

Federal question. authority of Courtney v. Pradt, 196 U. S. Appeal from the District Court of the 89, 91, 49 L. ed. 398, 399, 25 Sup. Ct. United States for the Southern District Rep. 208; Farrugia v. Philadelphia & R. of Georgia. R. Co. 233 U. S. 352, 353, 58 L. ed. 996,

Mrs. Mary L. Greer Conklin, appellant, 997, 34 Sup. Ct. Rep. 591; Louisville & pro se. N. R. Co. v. Western U. Teleg. Co. 234

Messrs. William H. Barrett, Bryan U. S. 369, 371, 372, 58 L. ed. 1356, 1358, Cumming, C. Henry Cohen, W. G. Brant34 Sup. Čt. Rep. 810; Male v. Atchison, ley, Wm. E. Howard, and A. F. Purdy T. & S. F. R. Co. 240 U. S. 97, 99, 60 for appellees. L. ed. 544, 545, 36 Sup. Ct. Rep. 351.

October 18, 1920. Per Curiam: Dismissed for want of jurisdiction upon the authority of Farrell v. O'Brien (O’Cal

laghan v. O'Brien) 199 U. S. 89, 100, 50 Vogt BROTHERS MANUFACTURING Com- L. ed. 101, 107, 25 Sup. Ct. Rep. 727;

PANY, Petitioner, v. ELLICOTT MACHINE Goodrich v. Ferris, 214 U. S. 71, 79, 53 CORPORATION. (No. 426.]

L. ed. 914, 917, 29 Sup. Ct. Rep. 580; Error to circuit of appeals--jurisdiction. United Surety Co. v. American Fruit

Petition for Writ of Error to the Unit- Produce Co. 238 U, S. 140, 142, 59 L. ed. ed States Circuit Court of Appeals for 1238, 1239, 35 Sup. Ct. Rep. 828; Sugarthe Sixth Circuit.

man v. United States, 249 U. S. 182, 184, See same case below, C. C. A. 63 L. ed. 550, 551, 39 Sup. Ct. Rep. 191. 267 Fed. 945.

Messrs. Helm Bruce and Alexander Galt Barret for petitioner.

Mary L. GREER CONKLIN, Appellant, v. Messrs. Edward P. Humphrey, James AUGUSTA CHRONICLE PUBLISHING COMPiper, Alex. P. Humphrey, and William PANY. [No. 353.] W. Crawford for respondent.

Appeal—from district court-frivolous October 11, 1920. Per Curiam: The Federal question. petition for writ of error is denied. See § 237 of the Judicial Code, as amended

1 Death of Turner C. Vason, one of the by the Act of September 6, 1916 (39 appellees herein, suggested, and appearance Stat. at L. 726, chap. 448, Comp. Stat. the said Turner C. Vason, deceased, as a

of Anthony J. Salinas, administrator of § 1214, Fed. Stat. Anno. 2d ed. p. 411), party appellee, filed and entered October § 2. Petition for a writ of certiorari and 12, 1920, on motion of counsel in that befor a writ of mandamus denied.

half.

pro se.

Appeal from the District Court of the Messrs. Charles A. Towne, Duane E. United States for the Southern Distriet Fox, and Frank B. Fox for appellants. of Georgia.

Solicitor General King and Mr. Leslie Mrs. Mary L. Greer Conklin, appellant, C. Garnett for appellee.

November 8, 1920. Per Curiam: DisMessrs. Benjamin E. Pierce and Wm. missed for want of jurisdiction upon the H. Barrett for appellee.

authority of United States es rel. ChamOctober 18, 1920. Per Curiam: Dis- pion Lumber Co. v. Fisher, 227 U. S. missed for want of jurisdiction upon the 445, 57 L. ed. 591, 33 Sup. Ct. Rep. 329; authority of Farrell v. O'Brien (O’Cal- United States ex rel. Taylor v. Taft, 203 laghan v. O'Brien) 199 U. S. 89, 100, 50 U. S. 461, 51 L. ed. 269, 27 Sup. Ct. L. ed. 101, 107, 25 Sup. Ct. Rep. 727; Rep. 148. Goodrich v. Ferris, 214 U. S. 71, 79, 53 L. ed. 914, 917, 29 Sup. Ct. Rep. 580; United Surety Co. v. American Fruit Produce Co. 238 U. S. 140, 142, 59 L. ed. POSTAL TELEGRAPH-CABLE COMPANY, Pe1238, 1239, 35 Sup. Ct. Rep. 828; Sugar

titioner, V. J. L. DICKERSON. [No. man v. United States, 249 U. S. 182, 184,

57.] 63 L. ed. 550, 551, 39 Sup. Ct. Rep. 191. Commerce-conflicting state and Federal

regulation---telegraph companies.

On Writ of Certiorari to the Supreme

Court of the State of Mississippi.
Ex PARTE: IN THE MATTER OF UNION See same case below, Miss. 79

Tool COMPANY, Petitioner. [No. So. 719.
Original.]

Mr. W. W. Millan for petitioner.
Motion for leave to file petition for a

Mr. William D. Anderson for respondWrit of Mandamus.

ent. See same case below, C. C. A. November 8, 1920. Per Curiam: Re262 Fed. 431.

versed upon the [610] authority of Mr. Melville Church for petitioner. Postal Teleg.-Cable Co. v. Warren-GodNo appearance for respondent.

win Lumber Co. 251 U. S. 27, 64 L. ed. [609] October 18, 1920. Denied. 118, 40 Sup. Ct. Rep. 69; Western U.

Teleg. Co. v. Boegli, 251 U. S. 315, 64

L. ed. 281, 40 Sup. Ct. Rep. 167.
STATE OF OKLAHOMA, Complainant, v.

STATE OF TEXAS. [No. 23, Original.]
October 18, 1920. Order. The motion

MIDLAND LINSEED COMPANY, Plaintiff in of E. Everett Rowell for leave to intervene is granted, but with the restriction

Error, v. AMERICAN LIQUID FIREPROOF

ING COMPANY et al. [No. 60.] that such intervention shall not delay the

Error to state court-Federal question. approaching hearing on general questions in the cause, and that, as respects that

In Error to the Supreme Court of the

State of Iowa. hearing, this intervener must rely upon the evidence already taken and reported 166 N. W. 573.

See same case below, 183 Iowa, 1046, to the court. Other parties to the cause

Mr. Denis M. Keleher for plaintiff in are granted ten days within which to answer the petition of this intervener.

Mr. Fred P. Carr for defendants in

error.

error.

November 8, 1920. Per Curiam: DisFRANKLIN SHAW et al., Appellants, v. missed for want of jurisdiction upon the

JOHN BARTON PAYNE, Secretary of authority of § 237 of the Judicial Code, the Interior. [No. 28.]

as amended by the Act of September 6, Appeal—from District of Columbia 1916 (39 Stat. at L. 726, chap. 448, Court of Appeals-Federal question. Comp. Stat. § 1214, Fed. Stat. Anno.

Appeal from the Court of Appeals of Supp. 1918, p. 411), § 2. the District of Columbia.

See same case below, 47 App. D. C. 170.

JANE FIELD,

FIELD, Appellant, 1 John Barton Payne, present Secretary

, v. UNITED of the Interior, substituted March 30, 1920,

STATES. [No. 73.] as the party appellee herein in the place Eminent domain – taking - improving

of Franklin K. Lane, former Secretary of navigation. the Interior.

Appeal from the Court of Claims.

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