NOTES OF CURRENT DECISIONS
UNITED STATES SUPREME COURT.
Antion by Stockholder. HAWES v. CONTRA COSTA WATER Co. This case was referred to in the decision of C. J. Sawyer in Dannmeyer v. Coleman,* and was one in which a citizen of New York, a stockholder in the Contra Costa Water-works Company, filed a bill on behalf of himself and other stockholders who might choose to come in and contribute to the costs and expenses of the action against the city of Oakland, the Contra Costa Water-works Company. and others, sa trustees and directors of said company. The foundation of the complaint was that the city of Oakland claimed at the hands of the water-works company water, without compensation, for all municipal purposes whatever, including watering the streets, public squares and parks, flushing sewers, and the like, whereas it was only entitled to receive water free of charge in cases of flre or other great necessity; that the water-works company complied with this demand, to the great loss and injury of the company, and to the diminution of the dividends which should come to himself and other stockholders, and the decreased value of their stock. And he alleged as follows: That .. on the tenth day of July, 1878, he applied to the president and board of directors or trustees of said water company, and reqnested them to desist from their illegal and improper practices aforesaid, and to limit the supply of water free of charge to said city to cases of fire or other great necessity, and that said board should take immediate proceedings to prevent said city from taking water from the works of said company for any other purpose without compensation; but said board of directors and trustees have Wholly declined to take any proceedings whatever in the premises, and threaten to go on and furnish water to the extent of said company's means to said city of Oakland free of charge, for all municipal purposes, as has heretofore been done, and in cases other than cases of fire or other great necessity, except as for family uses hereinbefore referred to; and your orator avers that by reason of the premises said water company and your orator and the other stockholders thereof have suffered, and will, by a continuance ot said acts, hereafter suffer, great loss and damage." To this bill the waterworks company and the directors failed to make anliwer, and the city of Oak.
*To appear on page 97, (93)
land filed a demurrer, which was sustained by the court, and the bill (USmissed. Complainants then took this appeal, which was deciL1ed at the Octo))er term, 1881, where the judgment was affirmed. Miller, J .. on the appeal held, in the light of the authorities, both English and American, including Dodge v. 1Voolsey, 18 How. 331, that in such case there must exist, as foundation for the suit, (1) some action or threatened action of the managing board of directors or trustees of the corporation which is beyond the authority conferred by their charter or other source of organization; or (2) such a fraudulent transaction, completed or threatened by the acting managers, in connection with some other party, or among themsefves, or with the other shareholders, as will result in serious injury to the corporation or to the interests of the other shareholders; or (3) where the board of directors, or a majority of them, are acting for their own interests, in a manner destructive of the corporation itself, or of the rights of the other shareholders; or (4) where the majority of shareholders themselves are oppressivelyand illegally pursuing a course, in the name of the corporation, which is' in violation of rights of the other shareholders, and which can only be restrained by the aid of a court of equity. (5) It must also be made to appear that plaintiff has made an earnest effort to obtain redress at the hands of the directors and shareholders of the corporation. (6) That he was the owner of the stock on whitlh he claims the right to sue, at the time of the tra,nsactions of which he complains, or that it has since devolved on him by operation of law. (7) That the suit is not a collusive one to confer on a court of the United States jurisdiction in a case of which it would otherwise have no cognizance. The cases cited in the opinion were: Foss v. Harbottle, 2 Hare, Oh. 488; Mozeley v. Alston, 1 Phill. Oh. 790; Gray v. Lewis, L. R. 8 Ch. 1035: McDougall v. Gardiner, L. R. 1 Oh. Div. 21; Atwood v.' Merrywether, L. R. 5 Eq. 464, note; Lord v. Copper Mining Co. 2 Phill. 740; March v. Eastern R. 00. 40 N. H. 549; v. Flint, 6 Allen, 52; Brewer v. Boston Theater, 104 Mass. 378, where the general doctrine and its limitations are well stated. Also Hersey v. Veazie, 24 Me. 9, and Samuels v. Holladay, 1 Wool. 400. Public Lands-Patents. ST. LOUIS SMELTING & REFINING CO. v. KEMP & NUTTALL. Suit was commenced in one of the state courts in the state of Colorado, and was removed to the circuit court of that district. It was brought by the plaintiff, a corporation created under the laws of Missouri, for the possession of real property under the practice existing in Colorado claimed under a United States patent. The defendants objected to the introduction of the patent in evidence, and offered documentary evidence tending to show irregularity in the proceedings had in obtaining the patent, to the introduction of which evidence the plaintiff objected. The case went to the jury under instructions of the court, which were excepted to by the plaintiff, and the jury found for the defendant, and judgment was entered accordingly. In a review of the case brought up on error to the supreme court of the United States from the circuit court of the district of Colorado, and decided February, 1882, Mr. Justice Field, in delivering the opinion ot the court, said as follows: