Meredith v. Washington Loan & Trust Co.

Adkins, J., delivered the opinion of the Court. The bill of complaint in this case was filed by certain stockholders of The Chesapeake & Columbia Investment Company against the other stockholders of said company living, and the representatives of deceased stockholders, as trustees, - heirs, or unknown heirs, the purpose of the bill being the disposition by sale of the real estate in Maryland standing in the name of said corporation. The bill alleges that the company was incorporated under the laws of the State of Virginia in the year 1890; that the purposes for which said corporation was formed and the chief business to be transacted by it, were “to buy, hold, own, sell, exchange and lease real estate, and generally to- do all such things as might be necessary to improve the same in any manner, and, to construct all works necessary for the maintenance of a residential settlement, and for the convenience of holders of portions of said property, as fully set out in said charter”; that said company purchased a large tract of land, situated on the Chesapeake Bay, in Anne Arundel County; that said property was subdivided into streets, blocks and building lots, and a number of said lots sold, but a large quantity of said land remains unsold, and undisposed of, title to which remained in said company until it was dissolved by due process of law by the State of Virginia, for non-payment of registration fees for the year 1904 and 1905, the charter and license of the said company having been re- ²⁷⁷ yoked and annulled by said state on the 12th of April, 1907; that the company issued 1,476 shares of capital stock of the par value of fifty dollars per share, and at the time of the dissolution of said corporation certain persons held the number of shares of said stock set opposite their names (giving a list of names with the number of shares held by each, and noting those who were dead at the time of filing the bill), all the living parties being non-residents of the State of Maryland and all said deceased parties in their lifetime having been non-residents of said state; that the property of said company now consists of the remainder of said tract of land consisting of about two hundred and seventy-five acres; that the said holders of stock are now tenants in common in fee simple of the real estate mentioned in these proceedings; that said land is now not susceptible of partition amongst the parties entitled thereto, according to their respective interests therein^ without loss and damage to the parties interested, and that it would be to the benefit and advantage of all parties concerned and interested in said land to have the same sold and the proceeds of sale divided amongst the parties entitled, according’ to their respective interests; that Thomas W. Smith, Nicholas H. Shea, Lawrence Cavanaugh, Minnie C. Taylor, George W. Driver, Henry K. Simpson and William Deitz, who in their respective lifetimes owned the number of shares opposite their names, died after the revocation of the charter of said company, but it is unknown to the plaintiffs, except as to said Smith, Cavanaugh and Shea, whether they died testate or intestate, and whether or not they left any heirs at law, and if so> who said heirs at law are or where they reside, and they are therefore making as parties defendant to this suit the unknown heirs and devisees (with the exception of said Smith, Cavanaugh and Shea) of the said deceased parties, who if living would be proper parties defendant to the suit; that Michael I. Weller died in 1904, leaving a will whereby he devised all of his property to his wife, the defendant, Rita Weller, absolutely. The prayer of the bill was for a sale of the land for the purpose of partition, and for “such other and further relief as their cause and equity may entitle them to have.” ²⁷⁸ There were filed as exhibits with the bill certified copies of the articles of incorporation, of a. deed of the property to the corporation, of the annulment of the charter, of the wills of Thomas W. Smith, and Nicholas W. Shea.

An order of publication giving notice to nonresident parties, known and unknown, was duly published. A guardian ad litem duly appointed answered for the infant defendants, and the trustee of Thomas W. Smith, and Emma J. Cavanaugh, widow of Lawrence Cavanaugh, of the adult defendants, also answered. As to the other adult defendants a decree pro confesso was signed. Testimony was taken by the plaintiffs and on July 21st, 1925, the chancellor signed a decree appointing James M. Munroe and Arthur Peter trustees to sell the property.

On August 24th, 1925, the trustees filed their report of sale, from which it appears that, after filing their bond and advertising the property for sale in two newspapers published in Annapolis, two in Baltimore City, one in the City of Washington, and also by hand bills extensively circulated, they, at the court house door in the City of Annapolis, on August 18th, 1925, in the presence of a large concourse of people, offered the property at public sale, first offering it in lots, blocks and parcels, the aggregate of bids being $18,125, and then offered it as a whole, and sold it to Carey L. Meredith for the Meredith Lumber Company for $32,750. Exceptions to ratification of sale were filed by the Meredith Lumber Company: “1. Because this honorable court was without jurisdiction in the premises to pass the decree under which said property was sold. “2. Because the title to the property so reported as sold to this exceptant is not a good and merchantable title. “3.

Because as to a part of the property so attempted to be sold to this exceptant the title thereto was not vested in the parties to this cause at the time of the sale. “4. And for other reasons to be shown at the hearing of these exceptions.” ²⁷⁹ It seems that one of the objections urged in the argument on the exceptions was that receivers should have been appointed to make the sale, and the court suggested the appointment of receivers to receive the purchase money and to join with the trustees in the conveyance of the property. At any rate, one of the plaintiffs filed a petition setting out, among other things, that on account of the death of certain holders of shares of stock it is uncertain to whom the proceeds of the sale of said real estate may be payable in some cases, and that petitioner is advised that, in order to protect the interest of all parties concerned, to pay any debts if any that may be due and owing by the corporation, and to ascertain with certainty the present holders of the stock of said corporation, who are entitled to receive the proceeds of the sale of the land, it is advisable that receivers be appointed to take charge of the assets of the company and make distribution thereof under the order of court, and praying for such appointment. Whereupon the chancellor signed an order appointing the said Munroe and Peter receivers of said company and authorizing them to unite with the trustees theretofore appointed in the sale of said property, and requiring them to give bond.

Subsequently the said Munroe and Peter as trustees and receivers filed a report in which they recited the filing of bonds by them both as trustees and receivers, and the previous advertisement as reported by the trustees, and reported that “the said trustees and receivers did in execution of the said decree heretofore passd and of the said order of January 20th, 1926, sell to the Meredith Lumber Company, a body corporate, on the 26th day of January in the year 1926, for the sum of $32,150, all the property described in these proceedings as “Arundel-on-the-Bay” as laid down on the plat thereof made by J. Revell Carr, surveyor, in July, 1925, and duly filed in this case, except certain lots which were excepted from said sale (and also excepted from the sale previously reported by the trustees). Whereupon the chancellor passed the following order ratifying the sale: ²⁸⁰ “Ordered, this first day of March, 1926, that the sale made and reported by the trustees and receivers in this case, be and the same is hereby ratified and» confirmed, no sufficient cause to the contrary having been shown, although due notice appears to have been given as required by the order nisi passed in this cause. And the trustees are allowed the usual commissions and such proper expenses as they shall produce vouchers for before the auditor. And upon the payment of the purchase money, and the conveyance of the property in these proceedings to the purchaser of the same, the said trustees are directed to pay said purchase money, after the deduction of the costs of this proceeding, to said receivers; and said receivers are hereby directed to immediately give notice for the period of thirty days to the stockholders of this corporation living, as well as to the assignees of any of said stock, and to the heirs and personal representatives, to file with said receivers, or in the clerk’s office of the Circuit Court for Anne Arundel County, all shares of stock in their possession.

And, at the same time, give notice to the creditors of The Chesapeake and Columbia Investment Company to file their claims, if any, duly proven, with the said receivers or the clerk of the Circuit Court for Anne Arundel County, within sixty days from the first publication of said notice. Said notice to be published in one newspaper puhlished'in Anne Arundel County and one in Washington, D. C. “And heirs at law and personal representatives of deceased stockholders are, hy said receivers, to he required to produce the proper proof to said receivers that they are entitled to receive the distributive share of the