240 'by one creditor of a national'bahk over another, after the bank has be· come insolvent, whether obtained with' the, consent of or by adversary has or has not proceedings against the bank, arid whether the · any reason to suppose the bank 'to be insolvent at the time. The com, plainarit is entitled to a decree, and the defendant 'must account for all the which it has ,not returned to the complainant, their value or ,ptoceed'S', less the amount of and overdrafts made after it re"ceitedthem. ')
:
(CircwttOou11,D.,CblortWo. February 1,1800.) , ,.1. ASSOmTIQlIl:.....
The trustees of an .umncoryomfud "trust," organized for the purpose of a<lqlllring;hOI,di,ng ".and,',d,iS,po,Bi"n!g, .Of,·the:, ti',Pital,,,',stoo, of oorporatlo"ns e,n,gaged, i,n a partie" ',k ul,Br line pfbusiness, whose artlcl,esofassociation authorize them'''to receive, hold, and dispose of tlietitlew" such stock, have power to sell any such stock ,tQ thii'd'p e r s o n s . " · . ," , stoc'k, t'l1e 'ool-v0ration is nota necessaprllarty. ,," , '
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'I. CO!tPOltAINON\H-lBTOCK-Bu,IT''1li') CoHPEL, Tn.tNSll'ER-PARTIBS. In a suit tDcompelthe oftlcera of aoqrporation to register Ii, transfer of corporate - 8. B.um-DElI'llNSEs__AGREEJlfllNTNOT
; In such a' suit an', agreement betwelln :the complainant's v,endor,and tbe defendant, fromwhornb,e purchased the such venltor V\T,oU,ld not, transfer it to, pe,rson', is not a good d'efenS6, Where it appears that such agreement was madeafter,the defendant had sold thtJ -stook to complainant's Tendor, and no oonis alleged for the agreemllnt, , ,,' ", , .
To
TRANSFER-CO'NSIDliiuTJON. '
4..
SAJlfE., · "
In 'such a BUit, an answer aUelrlng "that tbe complainant bad acquired the stook witbout eonsideration, for theJ>U1'Pose:ot1>btaining oontrolof,tbecorporation to the exclusion 'PIj,defendant, andllU interested therein, states a good llefense.' , ,,' " , , ' ,
'In Equity. This calise was 'heard by' Judge' PHILIPS, of the western district of 'Missouri, under order of thecircu\t judge. The questions' to be decided ,,arise dn' exceptions taken by the complainant to thesepar'ate answer of the respondent Head, and ondemurter to the bill by the respondent of the bill are that the Phcenix · Warrell., The$ubstantive Farm & Hauch Oompany is acorporalion ofthe territory of New Mexico, !organized forthe purpose of Q01nga general cattle business, with a cap"italstock of$160,DOO, divided into'1,600 shares, of $100 each; that its of business is ,the towDof Watrous, Mora county, N. M., :'Yith itsprin'bipal office at the town of Las Vegas, N; M.; and that the l',eSPondents to be, and' to act as, directors of the com;pany. It is alleged thaton:,Apri14, '1889, the for good ,and valuable cqnsiderationby hi,mpaid to the owners thereof, acquired 1,696 sharesbfthls stock; 'thatat"the time of his purchase he received ,froJl1 the"vendorScertificatesnum,bered 11, 12, 18, and 14, for 399 'Shares each, whibhceftificates'were indorsed on the back thereof, in blank, by
GOUl.D tI. HEAD.
241
the foriner owners; that complainant became, and is now, the absolute owner thereof. It is alleged that the only interest of the respondents in the capital stock of this company consists in the ownership of one share each of the stock, which was transferred to them simply to qualify them to act as directors of the company. It is then alleged that on the 13th of April, 1889, complainant presented two of such certificates, numbered 11 and 13, representing 798 shares, to the respondent Warren, the secretary of said company, at his office in Denver, Col., and demanded of him that the transfer of said shares be registered upon the books of the compaIiY;'and that a new certificate be issued to him therefor, which request was denied hysaid Warren. The bill further alleges that therespondents, although in fact but three shares of the capital stocko(said company, yet retained in their possession all the books and papers of the company, are managing its affairs, purchasing and disposing of cattle and incurring I in a reckless way, obligations of the ¢Ompany; that they refuse to recognize complainant as stockholder, or to admit hill) to any partiCipation <in. the management "of the affairs of the corport\tion·. The .bill' fgr,theralleges that, under the law of its creation and the direct<;>rs,can only hold their annual meetings ,for the election of directors at said town of Watrous, in New Mexico,and charges that the respondents are about to proceed to hold such election at Denver, Col., and asks that th!!y be restrained 'therefrom; and, further, that said Warren be compelled to register the transfer of said 'shares to complainant, and issue to him a new certifiCflte therefor. The respondentHead files answer to the bill, admitting complainant's title to this stock. The answer makes a long recitation of facts leading up to the controversy herein, from which it appears that, subsequent to the incorporation of the said Phcenix Company, an association known as theAmerican Cattle Trust wasfol'n1ed, in the state of New York, for the purpose of cpnducting a I!;eneral cattle business, by acquiring a majorIty of the capital stock of corporations and associations engaged in such business. This corporation was not an incorporated institution, but was simply an association of private individuals. It is alleged that on April 25; 1887, a contract was ,made by the respondents Head arid one J. C. Leary, on the one part, and the American Cattle Trust on the other, by which the former agreed to convey the stock in question to the cattle trust in ofa given number of certificates for shares of stock in the trust company, on the bnsisof a valuation of the shares of stock iii the trust qompanyat $100 per share, and taking in exchange therefor .the shares ofstock in thy Phcenix Company at a valuation of 25 cents on the dollar. This contract appears to have been nrst executed by the mutual transfer of the respective certificates of shares of stock in said companies. The answer alleges, inter alia, that, notwithstanding the'sale of said capital stock to the said American Cattle Trust, the business was thereafter to be continued, as theretofore, in the name of the PhreniX Company" and that the, said, Lawrence,. Leary, and respondent were to continue 'to net as 'directo:ts' arid managers of said company,t'1mbject, however, to a certain control over the general management ofsaid comv.41F.no.5-16
mnPQR'FU, yol.
41.
,pllny of tp.e ,(Jarttle. 'l'rustj "apd, furother, that when the fo: of ()f 'said shares ,of aforesaid. was , J;, ":That ,the slPd shares of, in said, Phoonix] 'Y,tlre to be held s,R,i,d;A" rr,rust Com,pan.y; that the sa me ,w.ere not to for sale, sold" nor transferred. or "part thereof,1)e put on thepel'son,sjndlcate, IJorcorporation; that it was any or not to any other contemplated. according to the terms of the articles of agreement constituting 'said American Cattle Trust, tha>t shares of the capital stock, or like shares dn any other corporation; ,the oontrolling inter",st in wbich was acquired as or sold Ol;idisposE¥! of in any mandur,iqg the 8)(istenceof' the same ; be kept, and ,held, pf persoIls, of saul .trust. ,or .t'>ersol1s by them sete,cted fortllat;pul'ppse, to be kE'pt and heM as eVIdence of I thel'iglit land 'power 'of the AmeriCan' Cattle Trust to 'regulate and, manaKe, in with ttie plan applicable to and affecting -all the corporatio'ns which 'should ,be' weI)) bel'S of said American Cattle Truf!lt: ,and that, that Cattle Trust, . through ,se)). and exchange the ',trust, it was not tiist the sltares' of Bt()Cit; 9r any mterest 10 the "properly. of said 'American Trust, should besoM toaoy other syndicate, :corperation, orperson."·/ ';i'l.':';, /" ' ., .. >
-.... eg
,It i,& then ageKed: q,faaid confract : exchange; respectiye the 'l,59Bshares of.stock·in Company were, sl¥nedapd delivered to the American Cattle I;\wlthllt ,such aFanKem,e,Ift! l1Htn t:l,le .9th of February, ,J;8&8, when. the four. ,delivered as aforeto Ameri,cRJ;l Cattle ,1.):J-;W;.. were .ieturneq. and: canceled, 'and '8 ,new, w,as a.nd ,,.8,sse,Qret, for 1 n,.,t.,he 2d of. Febru,ary .. .' lS89,'®e <;;hades Vi. GOl,lld, w4o. WitS:' then, Of the American for l,p96, and reqltested of!le,thll,t four, fqr for a like numMld one lll,the name, ot, )Ll\wrence, lor. a and the ,pther :tl:ui, ,of said Qf>¥hl;:¥o.r:'the , titicates were then, py respondeIlt; as president, .arid 'by tpe had irh time .ep toSl\cq office. .'.l'hat, . Gould, represe,nting the Ame,ricari C/ittl,e Trust; and' this ,said fopr to U.t!CTrust,at New York, With distinctagieement between said GOl,lld and tlje respondent that the )p,' the,posse,ssion of said 'treasurer. 'And, that annual '" by. 8;11 ,cpl1ce,rneq should held ,at Denvl:\l',Col"Jhe,,sald Goulcl, ,andJhis respondent be \MQted directors., ,'fhe, 8.IlSWer this further ,alllTlI.tion:' .. ..', , .. .. '.' '. . ., ' . o
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aOULb tl. HEAD.
218
«I Defendant further a"ers:that the complainnnt George H;Gould Is a brother of the Said Charles W. Gould, chairman of the said American Cattle Trust; ,affairs, that the said George H. Gould was and is cognizant generally of purposes, anl1operations of the said American Cattle and of the. plans, purposes, and schemes of the said Charles W. Gould, McGhee, and others now controlling the affair's of saja American Cattle Trust. and that, combining, confellerating. and conspiring with them, he entered into an arrangement with them whereby the said shares of stock were to be indorsed ,and delivered to him, apparently ·and professeilly, for value. but really without any consider. ation, so as to enable the said complainant, apparently as a bonafide purchaser. to acquire ownership a,nd control of the said Phcenix Farm & Ranch Company; the real purpose of said arrangement, however, being that the said Charles W.Gould, president. and the said McGhee, treasurer, and other per· sons connected with said American Cattle Trust. should in his name, and through him, obtain the direct and exclusi"e control of said Phcenix Farm &; :Ranch Company, to the exclrtsion ()fdefendant, the said Lawrence, and all other persolls interested therein." It appears from the answer that the said trust associati.on has acquired the controlling interest in a large number of cattle compnnies llcattered over the states of Texas and Colorado, and the territory of New Mexico, and thf1,$it.has issued therefor certificates of stock aggregati.ng about $15,000,000: Exceptions are taken to the greater part of this answer, for impertinence.,and immateriality. By stipulation of counsel, the articles of association of the American Cattle. Trust are to be taken as a part of the answer, or, at all evellta, to be considered by the court in the deterrqinatiol1 oithe questions raised: . Rogers &: (Juthbert, for complainant. Hugh Butler, for respondents.
PHILIP8,J., (after stating tbefaets a8 above.) I do not feel called upon', in the determination of the questions raised by the exceptions, to pass upon the question whether or not the real object and inspiration oHile American Cattle Trust WlIS to form sucb a combination against the freedom of tradeatidcompetitionas to 13 ubject it. , to the disability of being contrary to public policy. The trust company, as such, is not before the court; and counsel for defendant declines to urge such objection against the character of the trust. The first question of importance arising on the answer is, did the the AmerieanCattle Trust, or the trustees thereof, have the power to 'tranElfer, by sale or otherwise, the shares of stock in question to the com· plainant? . Exactly how the domplainant acquired possession of this st:Ock ill not disclosed by the bill; and, taking the answer in its entirety, it is'to be inferred from its statements that the complainant must have obtlioibed them by the president or the treasurer, McGhee, of the cattle 'trust, 'filling up the blanks in the four mentioned in thE: answer' "'ith the name of tne complainant, and then delivering them to him. And, reliming back to the averments in the bill, the complainant claims to have obtained thema!L apufchaser for good aI).d valij,able consideration;and, for the purposes' oUhis exceptionj. we may so tirll;tconsi4er him'. hearing ofthelliWlicationfor a temporary It
was held by Judge HALLETT that, under the constitllting inet1Vment o'the .American Cattle Trllst, it was not within the general scheme and purpose of the trust that the trll.$teesshotlld, upon the acquisition of the shares of stock of any corporation', imrrledia.tely transfer them by sale to a third party. Gould v. Head, 38 Fed. Rep. 886. If this be .correct, it would, upon the complainant's theory <;>f his right, place him ltorB de comba.t on his own chosen field. This leads to an examinatiol}. of the articles of association of the American Cattle Trust. The second paragraph thereof is as follows: "The general object contemplatedbY.the parties whOllnite in the establishQ-,e.velop, and secure improved methods and ment of this trust is to economies in the production, trlluspor-tlll.tion; distribution, handling, and sale of cattle, sheep, hogs,.and otl<ler allimals, and of the food and other products any 01' all in tne United produced or manufactul'eQ States or elsewhere. and to transact any and all other pusiness incidentthel'eto, growing out" or conn,ected !' ;:", :;';', or with any or all of them." of , 1 ' ,; ,t4erewith, ' . The fifth paragraph sets out the method by whioh the general objects of the association are attained"" "",'The method adopted by and thetrusteefl acting the trust agreement, for accompliShing objects hereinbefore 'stated, is the acquisition, by purchase, 'exchilnge/ol:otherwise. and the holding, rnanilgement, and disposition, of shares ot tINr capital stock of -tions, and joint-stock associations prganizedfor any of the .purposes hereinbefore named in the second article of this. agreement, in the <l.nd l'ies of the United States, and in the:p"istrictof. as well in any . .. :. : ': other country,, , ' Looking at these provisions alone, there is strong ground of dOl1bt as be withQl the scheme qf the, trust that the trusttes should transfer by sale the stock acquire<l to a third ,party, '.suchpower, -unquestionably, should. ,term;;, especially if its <Jise is likely to be by f!lucqresults as suggested to the mind of Judge HALLETT,Tqe only term frwuwbicp power can be deduced, looking at par/lgra,ph .5 alone, is following: ., And disposition of shares of tQe capi4tl'fltockof campanie:,!, corporations," etc. The term" disposition" has so many ,in. its. mere die,tibnary definition, which in the mOre general objects declared ill l1econd,paragr?lph, that it ,,'en .be !laid that meaning should be giVen t,oit, if possible, which would vert the general declaredr Ql:Uect,()f the .0011 lead to T(jSU!tS of iI!justice to the interests of an ,CoIlC,ElJ'ned. In such juncture, the might well say that the terI;rl'l·dispQsition"should be restricted to itS 'more primitive and generalj!Dpol;t, 'Which does not necessarily imply a -barter, sale, or alienation. The, greatest embarrassment, however, to my mind, arises on the language of subsequent paragraphs. Thesis:th 'section provides, inter alw, thab . ".All of the cash, and other property or contracis for the same, rights, etc., or, any matter or .thing of value Whatsoever, coming into the possession or cpntrol olthe or ,which. tper may ,be or
to whether it would
,. HEAD.
become entitled. shall be vested in, held, and controlled by the trustees as a whole, and shall not be alienated or parted with, upon the authorization. and with the approval, of the board of trustees." .
The primary meaning of the word "alienate" is "to conveyor transfer to another, as title, property, or right." The necessary implication from this is that it was in the contemplation of the originators of the association, and also in the mind of the framers of the articles, that it came within the power of the trustees to alienate shares of stock held by the trustees, as it is expressly declared that they shall not alienate or part with the f:'ame, "except upon the authorization, and with the approval, of the board of trustees." Then the twelfth paragraph, which defines and declares "the powers and duties of the board is as follows.: "To acquire, receive, h,olp., and dispose of the title to shares of the capital stock of companies, and associations, organized, or engaged in any of the lines or, branches of business hereinabo.ve described, or inau.y h,us.iness relating to or. connected therewith, or in any, degree. pertaining ox auxiliary thereto." , It is among the recognized ,canons ofconstruction that words, a:nd phrases shall be taken in their plain, ordinary, alld usual sense. Particular words and phrases are to ,be taken and under,. stoodin their obvious meaning and common acceptation; and if hav,eacquired, among certain, classes of persons or tradesmen, any different.of special aignifiQation, they are to be so appliep. by the ,court. The term" disposed of," in itf! dictionary definition,has among its Qleanings that of "bargain," "alienation/' "passing from one into the control of an"parting with." . Webst. Diet. b. Of course, the. import of this term may be so limited,byits context and its cognates as not to extend to a conveyance or sal.e of property. The statutes concerning the grounds .of attachment in civil actions ,as set out in many of the statutes, afford an illustration., It has held by the supreme eourt of Missouri, in BuJ,. ,letl,e v. Smith, 73 Mo. 151-161,that the subdivision "that said debtor has ,cqncealed, removed, or disposed of, or is about to conceal, remove, Or dispose of,his propertyj" does not embrace and cover the case of a fraudulent conveyance of property, for the reason that a preceding subdivision -of the section expressly conveyances, and,as every part .of this section is to be presumed to cover a different mode ofdisposition or .act, the term "dispose of" is intended "to cover all such alienations of property as Qlay be made ways not otherwise out in the statutes;' tor example, such as pledges, gifts, pawns, bailments, and such ·other and alienatiqns as, .may be effected by mere delivery, and w.ithoutthe use of any writing,assignment, or conveyance." But it is .(j:uite evidentfrom this opinion that, but for such expressed employment .of the word "c6nveyance " in a preceding subdivision, there would have, been no question but that the term :'dispose of" would have comprehended an alienation by conveyance. If a power of attorney, or instrument creating an. agency, declared that such attorney or agent, to whom ",as intrusted. certain shareli! orother propel\ty, had power to dispose of the ,title theretO,could it be questioned the power wlils expressly
246
FEDERAl,' RipORTER, vol. 41.
givEln td, or prpperty,?, qi8ponendi. in the construction of deeds, has. been to 011 terms of like import. The power to hold sQares,and, of consequence, to manage and cotitrolthem, isexp:ressly givenjan'd tbi's js followed and supplemented by the power to "dispose of the title." Regard must be had to all the words and, terms of the instrument creating and setting forth the powers and duties of su.chtrustees. Such meaning must be given to them, if possible, as will give effect to all its partsj, for the presumption must be indulged that in the construction of the instrument the framerflcarefully weighed each 'and every term employed. So, where different words are employed in defining the powers, with different import, enlarging or multiplying the functions of the trustees, each term, in pari materia, must be allowed its full import and office. Looking at this twelfth paragraph" we find that the power to acquire is given; then the power to receive and to hold. Each of these putably possesses a 'distinct meaping and office. Then follows the power to dispose of the title,-anotherand further power. Some force and effect musthegiven to it, and its office cim no more be suppressed or de:t.lied than that of its. neighbors 'ill the context. In looking further down this. twelfth parilgraph, we bfive another ins.tance ofthe employment of this term; "dispose of," indicating the' fact that the draughts.men employed it in the sense of 8lienation and complete conversio,n. Respecting the dividends and profits arising from'the trust, power is given "to invest,dispose of, and reinvest the same." As the power to invest is first13tated, followed by the power to dispose of, the term "reinvest,"'it to my J;llind,obviously has reference to the pro.. ceeds of the thing disposed necessarily implies that there had been an exchaogei,by conversion;i'nto some other form by the disposal. no the of the rule that where, for example, the provisions 'of 'the Jaw are inconsistent and contradictory to each other, or a literal construbtion M a single sentence or section would CODflict with every other, and with'the'entire scope and manifest intent of theaet, it is the duty of the court, if it be possible, to ,harmonize the various parts with each other, and that'to effect this it may be to depart from a ,literal ct:>nst'rtlclion 'M ,one t:>rmore sections.' But, where a statute or written instrumerit can be construed consistently with a literal meaning df the words used,' the court will not give it another' construction by 'nullifying or orie of its express'terms. Hick8 v. Jamison, 10 Mo. App. 35. There does not appear, tc> lilY mind, such palpable cohflict and incompatibility between the general !leClared object of the trust, and the powerof' disposa1' lodged in the trustEles, ,I¥l to justify theelhniilation of theternl' "dispose of the title.," The trust agreement throug];louhhows that· tbemost plenary discretion is con/erred, on the trustees as'to the Ibanner of' mimaging and a,ppl,Ying the properties of the , the exercise of their best judgment, in good faith, it was deemed wisest, for the intlJrests of all concerned, to sell the shares in anyone of tl;tecattle companies, and the proceeds distribute the dNittends, ,rathel' than depettd upon the profits to be de-
or
GOULD 11. BEAn.
247
, r,ived from l\ successful management ,of the, cattle, why should they not the discretion? What injury could be sustained by ,. thE) respondent, as a in the trust, property? His interest would .simply be inthe proceeds of the sale of the shares, just as ,it would be in proceeds of the sale of the cattle if the trust cOmpany had retained the shares()f ,stock inthe Of course, if' such sale of sbares should be made in bad faith; in violation of the trustees' oblfgation, the allY other stockholder, would have the rigbt and, the ready remedy to ca.Il the trustees to an account, or ·to restrain, as for any other breach of trust. duty or threaten,ed injury. It appears from the trust agreement that the respondent signed ,the, same as one of the original parties to its He therefore ,lolew what thepowers,()f the were when 116; entered int,() the :,cqmpact, for the transfer of his stock. ,Certainly"as., a stockholder in the his' rlght,andprhilege, whichno 011e could gainsay,. at pleasure, by gift or ,sale, ,of his cer;tificates ,o;r'stock therein. ,"The shares like any other pel1sQnal property. .The rightpf alienation incident of such property, as any other; and a of. the cor,poration l?ri;)pib)ting alientj.tion, or placing restraints void,." Wood's Field, § 9,8;}.fpore. v. Bank, 52 Mo. 377 .. , ress ;commerciaLlaw, have the basis 'of CClmrnerCial trap,sactions hl Aur stl,\tesj and, In form or, cparaCter llegotia· hIe. tp, p,s nearly as practicable." BwnJc v. ,Lanier, 11 Wall., 3.77 ·. 'Vhat,he for, to hiw the langullge of the in the case ()f v. .c0ttofl,-Oil asJollows: !llf, as a.l.leged, these certificates have been takenasa.price or. in exchange tQr ten million dollars of property: transferred to thetl'jlst, tpep, be validity and effect as shares of stock, whetherpr,llot they confer ontbe ,bolders the privileges .of c,orporate stockholders, or or not thel confer . the right to participate in the'carrying on Of any illegal b,usiness, yet they undoubtedlydo represent an interest in the property referred to, and as such have a legal and reid value;and'we cannot understand how ,8ucltproperty lights.can.be placed horsde commerce by an injunction."
is' an
It results that the exception to so much of the answer as jn' efl'ect pleads that trustees of the American Cattle Trust had to transfer the stock in questi<m to complainant is austained. .. ' · That. part of the answer pleads anunderstandillg betw4;len reand the of the to the ;eff,e<,:Hbat the certificates trlJ,Dsferred to it by s4ou1q beheld ;aD,Q"Dot :any third party"is, to on the grounds that it attempts 'to "ary, restrict, and adq to the te11l1S of the written contract of sale between respondent amI the trust company, arid is without consideration to support it. The answer had in the preceding part set out the terms and specifications of this contract, but does not aver that the contract was in writing. Of course, if it was reduced to writing, the presumption is that it contained all that was
248
FEDERAL REPORTER,
vol. 41.
agreed upon and understood by both parties up to and at the time of its execution. This would be equally true respecting a parol or verbal contract at the time the minds of the parties met as to its terms and conditions. 'J'his alleged understanding is not pleaded as a collateral undertaking, not expressed in the stipulation, and withheld, for any certain reason; but it is quite clear that it came into being after the contract of sale was made, for it is alleged, in effect, that it was understood "when the contract between himself and the said Lawrence and Leavens Was completed." It, thEm, being a subsequent agreement, it is obnoxious to the objection that no consideration is alleged to support it; and the exception thereto is sustained. .... I am of theopinion,however, that the last matter of defense pleaded in the answer, which is ,8e.t out in the foregoing statement, contains matters of substance, which ought to be investigated before the courtsholll'd 'tlrder a certificate to ib, the natni:{ohhe complainant,as'pray'ed fof. If he has ,paid no value for the possession of the stock claimedb'y him, and he is lending ,himself to a conspiracy to enable the parties r Damed to hold arid control 'the properties of the Phrenix Cattle Conlpany, with a view of wrecking it,and thereby diminishing td' that extent 'the 'value pi respondent's stock, in the American Cattle Trust, the coinplli'inant should have no, standing in acomt of equity to assist him. to a. "position the better 'to accomplish the contemplated wrong. If he is lin 'ibDocentpurchaser for value, and in good faith, he can show it; arid 'if his claim is merelysi'mulated, and he has acquii'edpQssession, as the . agent and instrument of the'frl,lst company, to enable them to perpetrate , a fraud or wrong uponthe'rights olthe respondent as a stockholder; it seems to me that this court ought not to compel the respondent, as president of the PhamixCattle Company, to execute to· him a new certificate of stock, but the couttshoulli leMe him where his own wrong has placed this part of the answer is overruled; him. The ... The demurrer of the rellPcorident Warren, the secretary of the Phrenix Cattle Company, 1 do not think ;s well taken. The act to be performed . by .him is simply ministerial.,. In re Klaus, 29 N. W. Rep·. 582. And I concur with what I am advised was the ruling 'of Judge HALLETT in . , this case: that the corporation is not a necessary party to this action. ··lfhe demurrer is accordinglyoverruled. There may be other matters'and things stated in the answer obnoxious totheobjection of immaterlality, and the like, viewed as independent, averments. ' But, as they are blended with the recitation of historical facts, showing how parted with his stock,and hJw thecomplainaritobtained:itspossession, they are at least harmless defects; and it could'Slipserve Dl;}useful purpose to undertake to sepa.'rate and eliminate them.
SUMMERLIN ". FRONTERIZASILVER MINING ,& MILLING CO.
249-
SUMMERLIN
et al. v.
FRONTERlZA SILVER MINING
&
MILLING
Co. et ale
(Circuit Court, W. D. Texas. February 6,1890.) 1. CORPORATIONS-CONTRACTS-AcTION BY STOGKiIOLDERS.
Complainants alleged that they and certain other persons agreed to organize a corporation for the purpose of operating mines. 'I'hat afterwards they organized a mining company, adopted by-laws, and elected officers. That at a regular meeting of said corporation it was agreed that the capital stock should be divided among the different members thereof, complainants to receive a certain number of shares. Subsequently complainants were induced to resign from the board of directors in order to let in other investors; they being promised that their interests should remain the same. That thereafter they were excluded from the meetings, and deniec;l all knowledge of the affairs of the corporation. That, a new distribution of ,stock was made, the original distribution being disregarded, and the shares of stock which had been allotted to complainants were allotted'to-others. Held, that all these !I11egations did not show any contract on the part of the company as sucJ;l, nor that the company, as such, had taken part in the alleged,wrongful acts, and It could not be made a party defendant to an action to compel the issue to the com· plainants of the shares of stock originally allotted to them, or for damages in caS8 suohshares could not be issued. Where it appears from the complaint that the complainants have no community or priVity of interest, not being stockholders in the defendant company, and that the contract with each complainant was separate, and there was no privity in the consideration! a demurrer to the complaint on the ground of misjOInder of complainants wil be sustained., Where it appears from the face of the complaint that there can be no speci:llcperformance of the contract allotting certain shares to complainants, and that the recovery, if any, must be limited to a money decree, for damages for non-performance, thacomplainants have a complete and adequate remedy at law, and an action in equity will not lie. The complainants not being stockholders in the company, there is no trust relation existing between them and, the company that calls, for an accounting in ' "
\!. PARTIEa-MISJODrDER-AcTION TO COMPEL ISSUE Ol!' STOClt.
a.EQUITY-J"URISDICTlON-ADEQUATE REMEDY AT LAW.
4.
SAME-ACCOUNTING.
JS.PI't.A.CTICE-])ISMISSAL.
In an action against several defendants, where the complaint contains no allega. tions conneCting one of the defendants with the cause of action stated therein, the complaint will be dismissed as to him.
InEquity. On demurrer to bill. This action was brought by R. L. Summerlin and George F. Lllpton against the Fronteriza Silver Mining & Milling Company, C. E. Lyman, George M. Wakefield, and R. C. Russell. The bill alleges the following facts: "(1) Robert L. Summerlin and George F. Lupton. of San Antonio, Tex., and citizens of the state of Texas, bring this. their bill of complaint. against the Fronteriza Silver Mining &, Milling Company, a corporation duly organized and operated under the laws of Colorado, and a citizen of the state of ColQrado, having a branch office at San Antonio, Bexar county, Tex., and doing business thereat, and C. E. Lyman, George M. Wakefield, and R. C. Russell, of the state of Wisconsin. "(l:l) And thereupon your orators, R. L. Summerlln and G. F. Lupton, complain and say that on or about the - - - day of - - - , A. D. 1885, an agreement Was m,ade by and between certain persons hereinafter named, to form and organize a corporation for the purpose of buying, selling, bonding, developing, and operating mines ood mining property, and for smelting, rednclng, refining, and selling the products thereof, and for buying and