200 U. S. BROWN and PECKHAM, JJ., dissenting. the meaning of the statute. The seventh and eighth items of the stipulation of facts are as follows: "7. A meat packing house is a place where the business of slaughtering animals and dressing and preparing the products of their carcasses for food and other purposes is carried on. The products thus prepared consist of fresh and cured meats, such as hams, dry salt sides, bacon, lard, beef extracts, glue, blood, tankage, etc. "8. Said Armour Packing Company does not anywhere within the State of North Carolina slaughter, dress, cure, pack or manufacture any products hereinbefore set forth, of any animal, for food, or for commercial use, or for other purposes." As one article of the findings defines the meat packing business to consist in doing certain things, and the very next article declares that none of these things are done within the State, it is difficult to say that, notwithstanding these findings of fact, there is a conclusion of law that the company is doing a meat packing business in that State. The Packing Company doubtless falls within the letter of the statute. It does a meat packing business in Kansas City. It does a business in North Carolina. But as we have said in numerous cases, a thing may be within the letter of a statute and not be within its spirit. United States v. Babbitt, 1 Black, 55. The letter of the statute in this case would be satisfied if the Packing Company did a furniture or dry goods business in North Carolina, yet it would clearly not be within the intent of the statute. If, for instance, the tax were upon breweries, and the beer were all manufactured out of the State and then shipped into the State for sale and distribution, is it possible that the defendant would be liable for doing business as a brewer? So if the tax were imposed upon manufacturers of carriages, and all the manufacturing were done in Chicago, and the carriages shipped into North Carolina and there sold, the defendant would be liable as a dealer in carriages, but certainly not as a manufacturer. The business done at the five cold storage plants, which consists in packing the meats and wrapping them for delivery as WHITE and MCKENNA, JJ., dissenting. 200 U. S. they are sold, is not mentioned in the seventh finding, even as an incidental part of the packing business. Much less even is the business of selling meats at retail as ordinary butchers do. Yet, in the opinion of the court, the company was doing a meat packing-house business within the State. In the view of the minority the business done within the State must be a meat packing business, and not the business of selling meats either at wholesale or retail, and when the meat packing house is accurately defined in the stipulation, and no part of the business thus defined appears to have been done within the State, it is impossible to support the tax. The case resembles that of Kehrer v. Stewart, 197 U. S. 60, in many particulars, but with the vital difference that the law of Georgia imposed a tax upon "all agents of packing houses doing business within this State, $200, in each county where said business is carried on." As the tax was imposed upon agents of packing houses, and not upon the packing houses themselves, the court was unanimously of the opinion that the managing agents of foreign packing houses were subject to the tax. But in this case the act attempts to reach out and tax packing houses doing business as such exclusively in another State. With the utmost deference to the opinion of the court, we are constrained to dissent from its view. MR. JUSTICE WHITE and MR. JUSTICE MCKENNA also dissented upon other grounds. 200 U. S. Statement of the Case. HALLENBORG v. COBRE GRANDE COPPER APPEAL FROM THE SUPREME COURT OF THE TERRITORY OF ARIZONA. No. 87. Argued November 29, December 1, 1905.-Decided January 8, 1906. This was a minority stockholder's suit to set aside a contract made for the sale of a large block of stock of the corporation under an arrangement made by the respective owners thereof with the party making the sale who was also president of the corporation. The contract was ratified by a majority of the stockholders and by the directors but against complainant's protests. It contained provisions for payments to the president for services. Complainant charged fraud, alleged a conspiracy between the president and the purchaser and asked for a receiver and an accounting. Other suits were brought in other courts in which similar charges were made. Held, that: On the record of this case the charges of fraud were not sustained and the complaint was not established. Where the allegations in the suit in which fraud is alleged are held to be untrue, records of other suits in which like charges were made and sustained on ex parte statements cannot be regarded as evidence of the fraud. THIS is a minority stockholder's suit. It was brought originally by Axel W. Hallenborg as owner of 8,617 shares of the Cobre Grande Copper Company, an Arizona corporation, and also as creditor of that corporation, for advances to the amount of $50,005. The appellant Addicks owned 5,000 shares and was allowed to intervene at the trial, and adopted Hallenborg's complaint. In November, 1898, defendant (appellee) Greene owned certain mining properties in Sonora, Mexico, and had an option on other properties. He gave an option on these properties to defendant Mitchell. It was provided in the option that $12,500 should be paid in cash and $237,500, as follows: $37,500 on or before November 26, 1899; $100,000 on or before November 26, 1900; $100,000 on or before November 26, 1901. In April, 1899, Greene, Mitchell and other parties, under the laws of Arizona, organized the Cobre Company. One hundred and ninety-nine thousand nine hundred and ninety-five shares of the stock were turned over to Mitchell in consideration of his option from Greene, which option was assigned to the Cobre Company subject to Greene's rights. The Cobre Company went into possession and was in possession in September, 1899. In October of that year controversies arose between Greene and the company over the option and the right to possession of the properties, and Greene entered into possession of them. Thereupon the company instituted suits in the courts of Mexico to gain possession of the properties, and also instituted a suit in the District Court of Maricopa County, Arizona, to restrain the delivery to Greene of the deeds which were put in escrow under the contract with Mitchell, which had been assigned to the Cobre Company. In the latter suit an injunction was granted restraining Greene from demanding or receiving the deeds. A suit was also brought in New York and one in Texas to recover the product of the mines. In the suit in Arizona the Cobre Company alleged, among other things, in substance, all the facts set forth in paragraph three of the original complaint in the present suit, and prayed that Greene be required to account for the proceeds of the products of the mines and other property alleged to have been appropriated by him. Issue was joined by the defendants therein the case tried and a judgment entered dismissing the complaint. The judgment was not appealed from. At the time of the judgment the plaintiffs were stockholders of the Cobre Company. While the litigation was pending the stockholders of the Cobre Company, or a majority of them, comprising stockholders to the number of 115,049 shares, entered into a pooling arrangement, whereby all of their stock was delivered to defendant Gage, with power to vote the same at all meetings of the stockholders. Subsequently Gage was granted the right to dispose of and sell the stock at his discretion. Several attempts were made by Gage to sell the stock at $2.50 a share, which failed on account of the other contracting parties not complying with their contracts. The plaintiff Hallenborg and John H. Costello opened negotiations with Gage for the stock at $2.50 a share. This also failed on account of objection by Costello to the contract which was drawn, although negotiations were kept up until December, 1900. Then Gage opened negotiations with Greene, who offered to buy the stock, upon better terms than anybody else had offered. Gage consulted the directors and they urged him to enter into a contract with Greene. The stock represented by Gage represented the entire stock of the company, including Hallenborg's 8,000 shares, except that owned by Greene and his associates and about 6,500 shares owned by other parties. Gage entered into a contract with Greene, December 12, 1900, and it was ratified in its entirety by the directors and by a majority vote of the stockholders. Hallenborg was present by attorney at the meeting and protested against the ratification. The contract was complied with by Greene and he paid the full purchase price for the shares, and they were delivered to him and the Greene Copper Company. All of the stockholders accepted the money so paid except Hallenborg, who returned the money sent to him and declined to be bound by the contract. The court finds that the contract was made with Greene in good faith, with full knowledge and consent of the directors and upon the advice of counsel of the Cobre Company, that the company could not successfully maintain the suit brought in Arizona, and with the full belief on the part of Gage that the contract was for the best interest of the company and its stockholders. And the court further finds that no agreement was made between Gage or other persons, whereby the directors, Adamson, Wood, O'Keefe, or any of them, were to derive benefit or did derive any benefit whatsoever, except such as they derived from the sale of their stock. The contract of December 12, between Gage and Greene, provided for the payment of the stock in certain instalments. Greene was to pay to Gage $25,000 in cash in addition to the VOL. CC-16 |