January 15, 1883.)
'Circuit Court, D. California.
Where a bill in equity is filed against one of the members of a copartnership to sct asidc partnership transactions, and vacate a conveyancc of real estate, assets of thc partnership, but held in the name of one of the partners for the henefit of thc firm, and for an account, all the partners arc indispensable parties to the bill.
INDISPENSABLE PAnTIES TO STOCRHOLDERS' En.L.
A stockholder of a New. York corporation filed a bill in equity, on behalf of h;mself and such other stockholdcrs of said corporation as shonld choose to come in, against a California corporation and other defendants, to set a,ide transactions between the said New York corporation and the other defendants; also, other transactions dependent thereon, without making the corporation of which hc is a stockholder a party to the bill. Held, that the New York corporation, of which complainant is a. stockholdcr, is an indispensable party to the Lill.
HEQUISITES OF STOCKIIOJ.DERS' Err.L.
Bill also held insufficient, as not containing the allegations essential to a stockholdcr's bill as established in Haloes v. Oakland, 104 D, 15.450; Hantington v. Palmer, Id. 482; and Dannmeyel' v. Coleman, 8 Sawy. 51 j [15. O. 11 FED. HEP.97.J
Demurrer to Bill in Equity. This is a bill in equity, filed by complainant on his own behalf, and on behalf of all other stockholders of a New York corporation who may come in and join in the expense, against a California corporation, Donohoe, and other natural persons. The bill is very long, and sets out many large and complicated transactions which took place, as is alleged, under the authority and by direction of the firm of Donohoe, Kelly & Co., with the fraudulent purposes of obtaining possession of the large estates of the New York corporation. It is alleged generally, in substance, among other things, that, being stockholders of the New York corporation, Donohoe and Kelly managed to obtain control of a majority of the stock of the corporation through proxies and otherwise, elected and controlled its officers, and for fraudulent purposes organized another corporation under the laws of California, to which, by means of their control, they procured a conveyance by the New York COl"POration of all the property; that by means of tbeir position they also took control and management of the California corporation, and in connection with it performed numerous other fraudulent acts alleged in the bill, by means of "hich the New York corporation and its stockholders were defrauded of their rights. This general statement will be sufficient to illustrate the points of the decision, without going into the particulars set out at great length in the bill. The New York corporation is not made a party to the bill, either as complainant or defendant. The acts complained of as against Donohoe are alleged to haye been performed by bim in connection with Kelly,
BELL 1:. DONOHOE.
many of them; 'in fact, being performed by Kelly in person. But they are alleged to be partnership acts performed on partnersbip account, and the conveyance held by Donohoe, soc.gbt to be vacated, appears to be held for the finn. The bill prays, among other things, that the conveyance from the New York corporation to tile California corporation, and various other transactions growing out of and connected it, be set aside and Jeclared void and held for naught; that the conveyance to Donohoe for the firm also be annulled; and that Donohoe account for the numerous transactions complained of, had by him and Kelly as partners with the New York and the California corporations. Defendants demur to the bill. TV. C. Belcher and E. B. Mastiek, for complainant. Doyle, Barbe?' ((; Scripture, for defendants. SA.WYER, J. After a careful consideration of this very long and elaborately drawn bill I am satisfied that the demurrer must be sustained. , 1. Kelly, in my judgment, is an indispensable party to the bill, without whose presence no decree can properly be made. He appears by the bill to be a partner with Donohoe in all the transactions of Donohoe of which complaint is made; and it appears that the title 'sought to be vacated or controlled is only nominally held by Donohoe for the benefit of the firm. No decree could finally settle tde rights of Donohoe and Kelly or complainant without the presence of Kelly. Donohoe is as much entitled to have his rights finally determined in the case as the complainant. The case is, in m:, judgment, clearly within the principle established in Shields v. BarTOW, 17 How. 13D; B'rrney v. Baltimore, 6 Wall. 280; Burke v. Flood, 6 Sawy.220; [So C. 1 FED. REP. 5±1;] by Mr. Justice FIELD in C. S. Min. CO. V. V. d: G. H. W. Co. 1 Sawy. 687; and in Ribon V. RailroadCo. 16 Wall. 450. It is difficult to perceive how partnership rights can be finally determined as to anybody 'without the presence of all the partners. 2. The complainant sues as a stockholder of a New York corpora. tion, on behalf of himself and all other stockholders, but docs not make the corporation itself, of which he is a stockholder and through which his rights are derived, a party to the suit. The corporation in such cases is certainly an indispensable party to the suit, without the presence of which no decree finally determining the rights of any of the parties can be made. 3. The bill does not allege many of the facts essential to give tbe complainant the statas necessary to enable him to maintain the bill, 1S settled in HClIces Y. Oakland, 104 U. S. 450; Huntington v. Palmer, [d. 4S2-; and Dam/meyer Y. Coleman, 8 Sa\vy. 51; [So C. 11 FED.
As Kelly is a citizen of the same -state with complainant, making a party wonld doubtless oust the jurisdiction of tue court, and it ,s doubtful whether the third point can be obyiated by amendment.
It will, therefore, be a waste of time at present to examine the im. p?rtant, not to say difficult, questions raised upon the equities of the bIll. There are exceptions to large portions of the bill for imperti. nence. Some of them, doubtless, are well taken. But the demurrer waives the exceptions. The demurrer is sustained. The complainant may think the objections to the bill can be obviated, and leave will be given to amena on or before the rule-day in March, if he be so advised; on failure to amend witllin the time given, the bill will be dismissed.
BANK OF COl,IMERCE;
Circuit Court, D. Oregon. 1.
February 22, 1882.)
DAMAGRS FOR TIlE DETENTION OF CERTIFICATE OF DEPOSIT.
The defendants unlawfullv detnined a cerlificate of deposit of the value of Held, that the plaintiff was entitled to recover damages for such detention equal to legal interest on the value of the certificate from the date of the demand therefor and refusal, to the recovery; and tlllS, without any evidence that the plaintiff 'vould have converted said certi:5.cate into money and put it to use, other than his right to do so and the defendants' illegal prevention of the exercise uf sucll right.
$2,Ol'0 from the plaintiff.
At Law. Edward Bingham, for plaintiff. 1.1. TV. Fechheimer, for Bank of Commerce. DEADY, J. This action is brought to recover the possession of a certificate of deposit-No. 20,906-issued by the First National Bank of this city, on April 6, 1881, for the sum of $:3,000, made rtturnable to the plaintiff or order, and since indorsed "S. P. Sleppy, G. L. Howard, Chas. H. Lee," and "Pay First National Bank or order for collection account of Bank of Commerce, St. Louis; J. C. Van Blarcom, Cashier," and alleged to be wrongfully detained from the plaintiff by the defendants. The plaintiff is a citizen of Oregon, and the defendants are not. The action is brought under section 8 of the judiciary act of March 3, 1875, (18 St. 472,) authorizing an action to be maintained in a. circuit conrt of the United States to enforce a claim to personal property within the district where such action is brought, although the defendant therein shall not appear thereto, nor be an inhabitant of such district or found therein. An order was made requiring the defendants to appear and answer within 60 days from the service on them of a copy thereof. This order was served upon the defendant the Bank of Commerce personally, at St. Louis, it being a corporation formed under the laws of
IFrom 8th Sawyer.