Statement of the Case. ment of his claim, and the resolution was duly signed by each member of the board present, being a majority of all the directors. After presenting the averments, of which the foregoing statement is the substance, and averring that the amount so allowed him was fair and reasonable compensation for the time and labor which he had devoted to the interests of the company, the complainant alleged that the defendant Main, with intent to defraud the complainant and to prevent his collecting the said amount allowed him by the board of directors, and the said salary and travelling expenses, combined and confederated with the other stockholders residing in Marion County, Illinois, to wreck the corporation by the process of the courts, and to buy in all its assets at a sum greatly below their real value, so that ostensibly the assets would all be gone when the complainant should take steps to collect the said debts; that with this end in view, on June 27, 1878, a bill in equity was filed in the Circuit Court of Marion County, Illinois, by Isaac Main, Frank Seymour, Francis H. Edwards, Lambert Noland, Charles Reinhardt, Jacob Lichty, C. N. Rockwell, and Henry Wellhoener (the latter of whom, as the complainant averred, withdrew from the suit upon learning the animus thereof) against the said company, Ozias Townsend, of St. Louis, Missouri, (the present complainant,) and all the other subscribers to the capital stock who resided out of the State of Illinois. The complainant showed that the said bill alleged, among other things, that on January 10, 1878, the company had entered into a contract with the said Frank Seymour (a defendant in the present suit) to sink a shaft on the said land down to the coal thereunder; that Seymour, in pursuance of that contract, had sunk a shaft to the depth of about 114 feet, when he stopped work for the reason that the company had failed to perform its part of the contract; that the corporation was indebted to Seymour on account of the said work in the sum of about $1700, and owed other persons about $1300 (not mentioning, however, the company's said alleged indebtedness to the complainant Townsend); that the whole cost. Statement of the Case. of sinking the shaft down to the coal would be about $10,800; that on February 14, 1878, an assessment of five per cent on the capital stock had been made; that the said plaintiffs Isaac Main, Lambert Noland, Jacob Lichty, C. N. Rockwell, Charles Reinhardt, Francis H. Edwards, and Henry Wellhoener paid their assessments, but that all the other stockholders of the company failed to pay; that, by reason of such failure, the stock of all the other stockholders except three (who do not appear in the present suit) was, on April 29, 1878, forfeited, but that the holders thereof were still liable for their indebtedness to the company; that some time, between March 3 and April 6, (the year not being given,) the directors of the company, with the exception of Isaac Main, fraudulently and without consideration acknowledged, by resolution, an indebtedness of $10,000 to the said Ozias Townsend for services claimed to have been rendered and money expended for the company; that such services were never rendered, and that no money was expended by Townsend for which the company was liable; that, according to the provision of the said resolution, that if Townsend so desired the said $10,000 should be endorsed upon the stock. held by him as a member of the company, he had issued, of paid-up stock, to his wife $5000, to George W. Wharton $4000, and to True N. Blackman $1000, which stock those persons pretended to hold as paid-up stock, but for which they had paid nothing to the company; that the said mining rights were conveyed to Townsend in trust for the company, with a condition that a shaft should be sunk upon the land within two years from November 6, 1877; that those rights were valuable, provided the shaft should be sunk within the said time, but that in the then unfinished condition of the shaft the mining rights and the land were not worth enough to pay the company's debts; that such property and the buildings upon the land were all the effects the company owned; that nearly all the stockholders of the company were insolvent; and that in the then present condition of the company it would be useless to attempt to continue its business. The complainant showed that the prayers of that bill were that the affairs of the company might be wound Statement of the Case. up, a receiver be appointed, the property of the company be sold, the proceeds of the sale thereof be applied to the payment of the company's debts, and that, if the same should be insufficient to pay the debts, then the stockholders. might be assessed to pay the balance, and that the corporation might be dissolved. The complainant averred that, as a defendant in the said bill so described by him, no summons was served upon him either in his individual capacity or as president of the company, and that neither he nor the company appeared, but that summons was served upon said Isaac Main as a director; that, at the August term, 1878, of the said Circuit Court of Marion County a decree pro confesso against the defendants in the aforesaid bill was entered, finding the facts alleged in that bill to be true, and granting the relief therein prayed for; that the court appointed a receiver of the company's property, and directed him to sell the same; that on September 28, 1878, the receiver sold at public sale all the property belonging to the company to the said Isaac Main, who was the only bidder, for the sum of $200, and executed and delivered to him a properly acknowledged deed for the same; that the sale was reported to the court, and that the court, on February 11, 1879, confirmed the same; that at that time the property thus sold was worth $20,000; that on March 24, 1881, an appeal was taken to the Supreme Court of the State, and was there reversed on the ground that the service upon Main as a director of the corporation when he was one of the plaintiffs in the case was not legal service upon the corporation, and that the Circuit Court of Marion County had had no jurisdiction over it. The complainant further averred that the cause having been remanded to the said court, he and the other defendants therein filed their answer to the bill, denying that the board of directors of the company wrongfully acknowledged an indebtedness to him; that the company in its answer to the said bill denied that it fraudulently acknowledged an indebtedness to him or issued paid-up stock to him or to any one else without consideration, and that such allegations were the only ones in the Statement of the Case. said bill and answers in regard to the company's indebtedness to him. He showed that the case was heard in that court in July, 1883, upon bill, answers, and evidence, and that the court found that the company had, on March 10, 1878, ceased to prosecute the work for which it was organized, leaving debts unpaid to the said Frank Seymour and others (but making no finding with relation to the complainant's claim); that the business of the company had been mismanaged by its officers; that the company was insolvent and that it would be useless for it to resume business; and decreed that the corporation be dissolved and that the appointment of the receiver be confirmed, and ordered the receiver to make a further report. It was further averred by the complainant, that in pursuance of the fraudulent scheme to prevent the collection of his claim against the company, Isaac Main and some of the plaintiffs in the above-described suit organized a new corporation under the laws of the State of Illinois, having its principal office at Sandoval, called the Sandoval Coal and Mining Company, for the purpose of having the property of the old company conveyed to it; that Main, in the year 1879, conveyed to the new company the said land and mining rights and all the assets of the company for the nominal sum of $200, but really upon the consideration that the new company should pay all the debts of the old company, except the said debts of Townsend, the present complainant; that the new company took the property with knowledge and notice of those debts, and also of such scheme to prevent their collection; that the property was charged with a trust in favor of the complainant as a creditor of the old company; that at the time the property was transferred by Main to the new company it was worth at least $20,000, and that that company was not a bona fide purchaser of the same. The complainant showed that at the February term, 1885, of the said court the plaintiffs in the aforesaid bill filed a supplemental bill in the cause, making the new company a party defendant, and that the new company filed an answer thereto, and at same time filed its cross-bill, in which it alleged that Statement of the Case. it had bought the said property from Main in good faith and had paid all the debts of the old company, amounting to $2465.30; that it had made valuable improvements under and upon the said land; that the plaintiffs in the said bill against the old company and others were the only legal stockholders in the old company; that the complainant Townsend and others, defendants in that bill, were not bona fide stockholders in the old company; and prayed that a conveyance might be made to it of the said property of the old company, and that the old company might be restrained from prosecuting an ejectment suit against the new company, and also from prosecuting an action of trespass against its officers. The complainant showed that an answer was filed by him to the said cross-bill, and that the case was heard by the Circuit Court of Marion County, and a decree entered therein in August, 1885, granting the relief prayed for in the cross-bill, and that thereupon he and the old company and other defendants in the said original, supplemental, and cross-bills appealed to the Supreme Court of the State, where the decree was affirmed. It was alleged by the complainant that since the original decree pro confesso had been held void by the Supreme Court for want of proper service on the old company, and since there was no new sale of the property under the decree entered after the remanding of the cause, it followed that the sale to Main under the former decree was also void. He further alleged that the question whether the old company, if it had not been dissolved, would have been liable to him for his said services, and for money expended by him for its benefit, was not in issue in either of the said cases and was not determined therein; and that, therefore, he was not estopped by the decrees entered in those cases from asserting in his present bill his rights as a creditor of the old company. The complainant finally averred that the new company, pretending that in the suit to dissolve the old corporation his said debts due by it were considered, and that the decree entered therein was a final adjudication of his account, had never paid those debts or any part thereof, and refused to |