Geddes v. Anaconda Copper Mining Co., 254 U.S. 590 (1921)

Geddes v. Anaconda Copper Mining Company

No. 25

Argued April 25, 28, 1919
Restored to docket for reargument December 8, 1919
Reargued March 3, 4, 1920
Decided January 24, 1921
254 U.S. 590

APPEAL FROM THE CIRCUIT COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

1. The Anti-Trust Act of 1890 provided the exclusive remedies for the rights it created, and it did not enable a private party to set aside a sale because the purchaser bought in pursuance of a purpose to restrain interstate commerce in a commodity. P. 593.

2. Although the federal question which was the basis of the jurisdiction of the district court became settled adversely to the plaintiff’s contention by decisions of this Court rendered in other cases after this suit was begun, the jurisdiction nevertheless continues to decide the other questions in the case. Id.

3. The evidence fails to show that defendants constituted in 1911, when this suit was begun, such a combination in monopoly or restraint of interstate or foreign trade in copper, within the terms of the Anti-Trust Act of 1890, as would justify granting an injunction to the plaintiff under § 16 of the Clayton Act. Id.

4. When the business of a purely private corporation has proved so unprofitable that there is no reasonable prospect of conducting it without loss, or when the corporation has not, and cannot obtain, the money necessary to pay its debts and to continue its business, even though it may not be insolvent in the commercial sense, the owners of a majority of the capital stock, exercising their discretion in good faith, may authorize a sale of all the corporate property for an adequate consideration and distribute among the shareholders the net proceeds after payment of debts, even over the objection of the minority shareholders. P. 595.

5. Such a sale, if otherwise valid, will not be set aside upon the ground that the consideration is not money, but shares in another corporation if the shares received as the consideration have such an established value in a general market that the shareholder receiving them may convert them at once into a cash consideration adequate for his interest in the corporate property sold. P. 598.

6. Where the minority shareholders of a corporation seek to set aside a sale of its property to another corporation negotiated and made by boards of directors having a member in common, the burden is upon those who would maintain the transaction to show its entire fairness and the adequacy of the consideration. P. 598.

7. Unless clearly erroneous, a concurrent finding of the district court and the Circuit Court of Appeals that the consideration for the sale was inadequate will be accepted by this Court. P. 600.

8. When it appears from the evidence in a suit to set aside a sale that the consideration was inadequate, the court is not justified in affirming the transaction merely because no greater amount is bid upon offering the property at public auction. Id.Mason v. Pewabic Mining Co., 133 U.S. 50, distinguished.

9. In a suit by minority shareholders to set aide for inadequacy of consideration a sale of all the property of their corporation to another corporation for a price paid in shares of the latter’s stock, held that, under the pleadings, the court, having found the price inadequate, should have set the sale aside, and was without power to depart from the parties’ contract by selling the property at auction for a cash price found adequate. P. 602.

245 F. 225 reversed.

The case is stated in the opinion.