Court Opinion

ID: 8654105
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:14:07.629762+00
Date Added: 2024-06-11T16:56:37.628545
License: Public Domain

Bartch, J.
(after stating the facts):
The controlling question in this case is whether the restraining order issued by the court, in the case of Wy-man et al. against Ferguson et at., was violated in any of the proceedings which culminated in the issuance and delivery of the treasury stock to Duncan J. Frew, and Frew’s title thereto rendered void, so that he and his transferees could not lawfully vote it at the annual meeting in 1895 for the election of directors. If that stock was illegally voted, then the defendants have no right to act as directors of the company. The command of the restraining order, so far as material to this decision, is “that said defendants, and each of them, their agents, ■,servants, and employés, be, and they are each of them hereby, enjoined and restrained from performing any of ■.the acts threatened bv them to be performed and com*431plained of in said complaint, pending the further hearing of this order.” This, in a general way, as will be observed, prohibits each and all of the defendants in that suit, and their agents and servants, from doing any of the acts threatened to be performed by them, and complained of in the complaint. There are no specifically threatened acts mentioned in the order, but only such as are complained of, and in determining whether an actual breach has been perpetrated the terms of the injunction itself must be considered, and where the writ does not' specifically restrain the parties enjoined from the commission of definite acts, but only in a general way enjoins them from the performance of acts complained of, which, it is claimed, will produce certain results, it must satisfactorily appear, in order to constitute a breach of the injunction, that the acts performed were included within its scope. High. Inj. § 1433. In the case at bar the question, therefore, arises, what acts are complained of in the complaint to which the order refers, which the defendants, or either of them, threatened to perform? And upon a determination of this, the further question will necessarily be presented, were the acts performed by Frew and others, which resulted in his obtaining the stock in question, within the terms or spirit of the injunction? To determine these questions reference must be had to the complaint wTuch was made the basis of the restraining order. An examination thereof shows that it charges the defendants therein with having “entered into a fraudulent and wrongful conspiracy for the purpose of injuring these plaintiffs,” and all other shareholders, and for the “purpose of obtaining to themselves the entire control of said company;” and then alleges in detail certain acts and things which the defendants would perform, among others that defendants Ferguson *432and Campbell claimed to be a majority oí tbe executive committee, and would sell tbe treasury stock to pay fictitious claims, for the purpose of obtaining control of tbe company, in furtherance of that conspiracy. Tbe allegations as to these acts and things, however, appear to be mere suppositions as to what the defendants would do, and not averments of what they had threatened to do. Nor does the evidence show that the defendants threatened to do what it is alleged they would do. It is clear that the gravamen of that action was the conspiracy attempted to be set up in the cdmplaint, and the restraining order was directed, as its terms plainly indicate, to the acts which might be performed to carry out the alleged conspiracy, Whether it was sufficiently definite for that purpose, it is not necessary to decide. It is apparent, however, that it enjoined the commission of no act on the part of the defendants, even as to the treasury stock, which was not complained of. Nor did it prohibit the bringing of any action at law against the company by any person which might involve such stock. Nor was there any allegation in the complaint that any of the defendants had threatened to issue and deliver the stock, or would deliver the same, as a part of the alleged plot to obtain control of the company. Under these circumstances the defendants Ferguson and Campbell committed no breach of the injunction if they delivered the stock in question in obedience to the demand of a person who had the lawful right and title thereto-. On this point it is shown that Frew was not a defendant or party to the action for the injunction; that he had a valid claim against the company, and brought suit at law thereon in a court of competent jurisdiction, obtained judgment therefor, caused an execution to be issued thereon, which was levied on the stock; and that thereafter the *433stock was sold by a proper officer, under the execution, in a regular manner, and purchased by Frew. The officer delivered to him a certificate of sale which he presented to Ferguson and Campbell, as vice president and secretary, respectively, of the company, and they issued and delivered the stock to him. It is admitted by counsel for the appellants that the restraining order did not prohibit the obtaining .of the judgment against the company, but it is insisted that its officers could not issue and deliver the stock without first having obtained permission from the court which issued the injunction. We have seen, however, that the only acts restrained were such as might be committed in furtherance of the conspiracy charged, and therefore the issuance and delivery of the stock upon demand to one who had the lawful right thereto constituted no breach of the injunction, and was neither in violation of its spirit nor terms. Frew thus having lawfully obtained the stock in question, he and his transferees had the right, after the same was properly transferred on the books of the company, to vote it at the annual meeting for the election of directors; and the defendants in the ca.se at bar, having received a majority of the legal votes cast, and qualified, constituted the rightful board of directors. We find no reversible error in the record. The judgment is affirmed.
Minee, J., and Cheeev, District Judge, concur.