Virginia C. Mining, Milling & Smelting Co. v. Corrigan
Opinion of the Court
This is an appeal from a decree dismissing a bill of complaint under general equity rule No. 29 (198 Fed. xxvi, 115 C. C. A. xxvi). For immediate purposes, the allegations of the bill may be thus sufficiently summarized:
In 1905, one Clayton had a verbal option for the purchase, from the owners, of the Hidalgo Mines, socalled, in Chihuahua, Mexico, at a price of 50,000 pesos. Clayton sold (his option to one Chew (the written option being taken for his benefit, in the name of one Raines); Chew assuming to pay to the owners the purchase price mentioned in three equal annual installments, beginning January 15, 1906. The mines were then conveyed to a Mexico corporation called the Virginia C. Mining, Milling & Smelting Company, capitalized at 10,000 pesos, and organized for tire purpose merely of holding the legal title to the mines. All the capital stock of the Mexico corporation was immediately turned over to an Arizona corporation of the same name (one of the plaintiffs here), which was to finance, manage, and operate the mines. The Arizona corporation was capitalized at $1,250,000, and all of its capital stock was turned over to Chew, who, as an additional payment for the option mentioned, gave one-eighth of it to Clayton, agreeing also to give the latter 10,000 pesos, in three annual installments, maturing at the same time as the installments of purchase price of the mines. Chew was president and Clayton vice president of both the Mexico and Arizona corporations; Chew being also treasurer of the Arizona corporation. Raines was an officer of both corporations. The plaintiff Mexican-Pacific Mining Company is a corporation organized under the laws of Arizona, and is a citizen of that state as well as of Missouri. It duly purchased from its coplaintiff and took over the remaining 4 shares of the Mexican corporation, and still owns them. The first two installments of the purchase price of the mines, as well as of Chew’s agreed payment to Clayton, were met; but Chew was unable to meet the third installment of either of these payments, and to> avoid forfeiture of the mines obtained from Clayton a loan of 24,000 pesos to cover both items of indebtedness, and, as security for that loan, pledged, for Claytop’s benefit, without the authority, knowledge, or consent of the Arizona'corporation, the 6 shares of the Mexico corporation’s stock held by the Arizona company. This indebtedness to Clayton was not paid, and, in 1910, he obtained possession of the pledged 6 shares of stock, assumed control of the affairs of the Mexico corporation and of the management and operation of the mines, and effected a reorganization of the Mexico corporation which, through a board of directors controlled by him, contracted, in 1915, to sell the mines to the defendant, Corrigan, for $200,000. The bill alleges that Clayton’s possession of the 6 shares of stock in the Mexico corporation, and the control thereby obtained of its affairs resulting in the contract of sale to Corrigan, was fraudulent, and that Corrigan knew it; also, that the mines, when sold to Corrigan, were worth more than $1,-250,000. The bill prays that defendant be temporarily and permanently restrained from attempting to make or consummate any propos
Plaintiffs, however, attempt to avoid the effect of lack of parties defendant by alleging that the Arizona corporation has, without avail, exhausted every possible effort to secure a settlement between itself and Clayton respecting the 6 shares; that that corporation, in 1913, began suit in St. Louis against Clayton to recover their possession, and for an injunction restraining their sale, pledge, or other disposition, as well as the disposition of the mines, or any interest therein; that appellee was notified of the pendency of the St. Louis suit, and of plaintiffs’ claimed rights, before be contracted for the purchase of the property; that the St. Louis case is still pending and at issue, but that testimony of witnesses in Mexico is needed before hearing can be had, and that such testimony cannot now be taken because of the suspension of all civil authority in Mexico; that Clayton and the directors of the Mexico corporation are all in Mexico, and beyond the jurisdiction of this court, and not amenable to its process, or to that of any other American court; that there are now in Mexico no courts having civil jurisdiction over transactions of this character, or in which plaintiff could obtain relief, either against Clayton or the directors of the Mexico corporation, and, moreover, that it is unsafe, by reason of the revolution there prevailing, to go to Mexico for the purpose of relief to plaintiffs ; and they urge that if, for lack of necessary parties, the court below could not determine the ownership of the disputed shares, it yet has full power to hold matters in statu quo until appellant can litigate the question with Clayton in a court which has jurisdiction, as the St.
Normally, plaintiffs’ remedy respecting this mining property — situated as it is in a foreign country, and whose legal title and right of disposition are governed by the laws of that country — is to he found through the courts of that foreign country, and, before plaintiffs can obtain in the courts of this jurisdiction the extraordinary relief .asked, their right thereto should be made clear.
Moreover, there is nothing in the record furnishing any assurance that conditions will so change in the near future as to permit the effective prosecution either of the St. Rouis suit or of new proceedings in Mexico, and thus that a mere temporary injunction against the carrying out of defendant’s contract of sale would benefit plaintiffs. Indeed, if, as plaintiffs allege, defendant made his contract of purchase with knowledge of their claimed rights, they are not shown to be entirely remediless.
We think it clear that plaintiffs have not stated a case entitling them to relief here, in the absence of other interested parties.
The decree of the District Court must be affirmed.
Reference
- Full Case Name
- VIRGINIA C. MINING, MILLING & SMELTING CO. v. CORRIGAN
- Status
- Published