V. UNION PACIFIC BY. CO.
By. Co. and another.
(Circuit Court, S. D. Neto York.
OF CAUSE-REV. ST. § 639-AcT OF :r.LmcII 3, 1875, § 6. The act of March 3, 1875, § 6, ref"r, to the stagJ of thc in the suit at which the pl'Oceedmgs in the circuit court are to commence, ruther than to ilw form, foree, or e,feet of the plcadmgs in the ca Ise previously hact, leaving; the provisions of Hev. St. § 639, in force as to them; and if the p eadings are in form, and verine;), so as to be regn'ar and valid in the state courts, the intention and etrecl of the statnte and rule, w(/uld seem to he thlt tlley are to IJe taken to he so on reaching the federal cuurts in cases of removal. 2. Surl' BY STOCKHOLDER-EQUITY RULE 94. Equity rule 94 apple, only to bill, brought hy a stockholder against a corporat.oll and others, "founded on rights which may properly be asset·ted by the corporation," and does not apply to a suit brought IJy a stockholder, not "founded on snch rights," agamst a corporntton to le.:ltrain curporate action, and against the president for discovery merely.
;So :MOTION Fan INJUNCTION-AFFIDAVITS.
On motion for a preliminary injunction, the case, with its gronnrfs for relief, mnst he made by tlIe IJill itself, and the scope of tlIe bill canuot LJe enldr,:;ed by atfiuavits fLed.
COHPORATION-PoWEn TO Pr,EDGE SECUIlITIES Fan DEBT.
The power of a corporation to pledge 81'curities owned by it for the payment of its debts is induded iu the power to sell such securitie, for that purpose. In this cnqrJ the av"rments of the hill are too indefinite to entitle complainant tt) a preliminary injunction as moved, and the motion is accordingly denied.
In Equity. for defendant. TlJis snit is brought by the orator as a stockholder in tlle defendant corporation, of which the other defendant is president, to restrain the corporation from raising money on its bonds secnred hy a pledge in trust of the securities of other roads held by it, to aid in the construction and ope\:,ation of connecting roads not a part of its own liues. 'fiJere is a motion for a preliminary injunction, which has now been heard. 'l'lJe defendants make qnestion in advance of the merits of the case as to whether it is bronght within the requirements of the ninety-four! h rule in equity. The suit was commenced in the state court and removed into, and copies of record have been entereJ in, this court. Section 639, nev. St., provides, with reference to suits removed like tllis, tuat'WHEELER,
George ZlIhri!;kie, for orator. John F. Dillon and Artemlt8 [I.
"'Vhen the said copies :Ire entered as aforesaid in the ('ircuit ('onrt, the cause shall proceed in the same \DaHner as if it hal! Leen brought tllf'lre by original process; and the copies of plearlings Shall have the same force and effect. in every respect and for every pnrpose, as the original plpadings would have had by the laws :lnll practice uf the cuurts of such state if tue cause 11ml relUained iu the state ('ourt."
Section G of the act of 1875 (1 Supp. Rev. St. 172) provides"That the circuit court of the United States shall, in all suits removed under the provisions of this act. proceeu therein as if saicl suit had been originally commenceu in said circuit court, and the same proceedings had been taken in such suit in said circuit court as shall have LJeen had therein in said state conrt prior to its removal."
This cause was removable under the act of 1875 as well as under the Rovised Statutes, and may be said to be a suit removed under that act, so that the provisions of section 6 of that act would apply to it; and, so far as they would apply, they would supersede the pro,visions of the Revised Statutes, of course. This provision of the act of 1875 seems to refer to the stage of the proceedings in the suit at which the proceedings in the circuit court are to commence, rather than to the form, force, or effect of the pleadings in the cause previously had, and to leav?, the provisions of the Revised Statutes in force as to them. The rule could not be intended to apply to the state courts. And if the pleadings were in form, and verified, so as to be regular and valid in the state courts, the intention and effect of the statutes and rules would seem to be that they were to be taken to be so on reaching the federal courts. Further, rule 94 in terms applies only to bills brought by a stockholder against the corporation and others, "founded on rights which may properly be asserted by the corporation." This does not appear to be such a bill. It is brought by a stockholder against the corporation and another, but not founded on such rights. The suit is against the corporation to restrain corporate action, and the president seems to be joined fer the purposes of discovery merely, and not as a party against whom specific relief is sought, instead of against the president, to restrain official action, and for relief against him personally; the corporation being joined merely because it haa refused to proceed in its own right. Green's Brice's Ultra Vires, 64:7; Hawes v. Oakland, 104 U. S. 450. 'fhe motion, therefore, is tu be disposed of upon its merits. An answer was filed, the bill has been amended, and affidavits have been filed on each side. Whether affidavits are admissible Or not to support the bill on such motion, they cannot enlarge the scope of the bill. The case, with its grounds for relief, must be made by the bill itself. In this case the bill sets forth distinctly and clearly that the corporation is auout to raise money in the manner mentioned, and sets forth that the money of the corporation has been 'used for the purpose of constructing and operating other roads; and that the orator has reason to believe, and does believe, that it will continue to lend and furnish its moneys and credit to snch railroad 'c?rporations for the purpose of aiding in and promoting theconstruchon, maintenance. and operation of the railroads of such companies; ,but does not set forth any railroad or corporation tha.t it is about to so aid, nOl;'any place where it is 'about to so invest its monevs. The ans\yer admits that the corporation is abo'ut to raise .fumls by the
TEXAS & ST. L. RY. CO.
pledge of such secdrities of other roads, but denies that it.is about to use them for such purposes, and alleges tha t it intends to use them to pay its floatinR debt. It is said in argument that if the defend- . ants should answer fully the in the bill, the intention to aid other roads would appear with much more definiteness. This may be true, but cannot amplify the bill for the present motion. The information thus to be obtained cannot be made available until it is had. These allegations as to intention and purpose of divertwg the funds of the corporation seem to be too meager and indefinite to lay the foundation of a preliminary injunction upon, and, such as they are, they are fully met by the denials of the answer. 'I'be purpose to raise money to meet debts, or for other corporate uses, by pledge of these sureties, seems to be clearly within the scope of the corporate powers, and lawful and proper. The corporation has these securities not yet due. Whether it came by them by stretch of its powers or otherwise, no question is made but that it owns them. The bill proceeds upon the ground that it does. It owes debts, and was created with the expectation that it would owe them, and bas implied power to raise money to pay them. It is not disputed that it could sell these securities to raise money to pay its debts, and the power to pledge them is included fairly in the power to sell for the same purpose. Platt v. Union Pac. R. Co. 99 U. S. 48. The orator does not appear to be entitled to have the corporation restrained from raising the money by the pledge of the securities, for that seems to be entirely lawful; nor.to have it restrained from using the money for outside purposes, for there is no sufficient allegation or admission of any intention of doing so if not restrained. On the contrary, the intention imputed is denied, and the whole equity of the bill, if any, is denied. As the case now stands the orator does not appear to be entitled to the preliminary injunction moved for Motion denied
L. By. Co. in Missouri and Arkansas v. another.
April Term, 18S3.)
(Oircuit Go'urt, E. D. Arkansas.
REMOVAL OF CAUSE---:JURIsnICTIOX OF CmCUIT COURT, WHE'" ATTACHES.
2: S.BfE-,-FILIXG OF RECOHD-'-TnIE.
The act of ,congress requires the ·party removing. the cause to file of the record on the first day of the next sessIOn of ,tp..e. circujt c.ourt occurrlllgafter the removal. But it may be filed by either party Lefore that time;·and when