MILLS V. BURD.

121

MILLS V. HURD

and others.

(No. 532, and Three Other Cases.)

«(lircuit Court,D. Oonnecticut. September 19, 11187.)

1.

Eq,U1TY-PLEADING-:MULTIFARIOUSNESS-PRAYER FOR ACCOUNTING AND INJUNCTION.

Complainant, a stockholder, trustee, and creditor of an unincorporated association, brought a bill against his co-trustees, for the winding up of the I'\ffairs Qf the company on account of gross mismanagement, for an accounting, and the appointment of a receiver; also praying for an injunction against a proposed fraudulent·sale by the trustees of a large portion of the property of the Hel4, that such a prayer did not make the bill multifarious. In a for 1101} accounting by a member of an and praymg anmjunction agaInst a proposed fraudulent sale, It IS proper to make the proposed vendee a party to the suit, alth()l!gh he may have no interest in the accounting.

2.

SAME-ENJOINING SALE-VENDEE PROPER PARTY.

Goodwin Stoddard and H·. C. Robin8lm, for Co. and others, defendants. Wm. a.Oase.and T. M. Maltbie, for John nurd. Wm. A. Unckrwood and A. HcrweU8, for plaintiff.

Rolling Stock .

Smp14AN,J. This is a.demu:rrer to a bill in equity on the ground of multifariousnesa in improperly joining distinct and independent matters in one bill. The facts in the case; ,as they appeared upon the plaintiff's motion for & preliminary injunction, are stated in MiJ18 v. Hurd, 29 Fed. Rep. 410. The bill in No. 532 alleges, in substance, as follows: The plaintiff and the defendant Hurd were the originators of the unincorporated associa.tion or partnership sub modo formed for the purpose of owning and leasing railroad freight cars, known as the Bridgeport Rolling-Stock Association, were the original trustees thereof, and are still trustees. Hurd was and is its president and treasurer. All the stock of said company was issued to him. He furnished to it freight cars which he claimed were nished in exchange for said stock. These shares he afterwards sold to sundry persons. He has had the entire managememt of the moneys and property' of said association. The plaintiff is a stockholder in, and creditor of, said association. Subsequently the defendants Ritchie, Trubee, and Cogswell became trustees. The bill then sets out at length the particulars in which Hurd has mismanaged and misappropriated the property and funds of said association, has failed to render proper and accurate accounts, and has been guilty of a breach of his obligation, as a trustee and manager. It alleges that he has a large amount of its funds in his hands which he refuses to payor account for properly, that there is. no hope of his coming to an honest account with said tion, or voluntarily or honestly distributing its assets, and that said Ritchie,' Trubee. and Cogswell are supine, and either. will not or cannot afford any assistance to the stockholders in this J:'egard. The bill further alleges, that the four. trustees, other than himself, have made an

128

FEDERAL REPORTER.

agreement with the Consolidated Rolling-Stock Company, also a defend. ant; ,and claiming to be a Connecticut corporation, whereby all thedars belonging to the Bridgeport Company, and some of its funds, and all the cars of three other companies, are to be conveyed to said Consoli· dated Company; that said conveyance is to be without consideration, except'ari issue, in the future, to the stockholders in said four associations, of the shares of stock of the Consolidated Company, in exchange for their respecthre shares in said associations, leaving shareholders, who were unwilling to make said exchange, subject to such terms as said corporation may offer, or else to a resort to legal remedies; that this scheme is promoted by said defendant trustees without the consent or request of the majority of the stockholders, and, if carried out,would be a fraud upon their rights; that said transfer is intended by Sllid four trustees and those having control of said Consolidated Company to be fraudulent and for the purpose of putting and leaving the shareholders in the posi. tion which has been described, and that Sflid conveyance, notwithstanding the protest of the plaintiff, is about to be made. The prayer is for an account by said Hurd, and by the other trustees, of all his and their financial dealings with said. company; that all the defendant trustees may be enjoined against selling or disposing of any of the assets of said company to the new corporation, or to any other person, and from collecting any dues belonging to saidcoIhpanies; that the Consolidated Company may also be enjoined against purchasing the cars or other assets of said association; that the affairs of said company may be wound up,it9 property sold, and the proceeds distributed among the shareholders,and that this may be done by the aid of a receiver, who shall take possession of its property. The three other bills make the same allegations and the same prayers, mutatis mutandis, in regard to the three other companies. The bill ii> by a stockholder, trustee, and creditor of an unincorporated association against his co-trustees, in which a number of the Connecticut stockholders are also made defendants, praying for a winding up of the affairs of the association, on account of the gross mismanagement and fraud of its manager, and the supineness,of its co-trustees, and for an accounting by them all in regard to the property and funds of said association, and for an injunction against a proposed fraudulent sale of a large portion of its property, in which intended fraud the defendant trustees and the proposed vendee participate. The bill makes no different or additional allegations on account of the different characters in which the plaintiff presents himself. It must be observed, and this I conceive to be the important point upon this demurrer, that all the allegations in regard to the sale relate to a proposed sale only. It is not alleged that such sale has been consummated, nor is there any prayer for its cancellation, or for a return of the property in the hands of the Consolidated Company to the receiver. The prayers in regard to a delivery of property relate only to the trustees. If the bill had counted upon an executed sale, and had prayed, not only for the .vinding up and settlement of the business of the company or

KILLS V. HURD.

129

partnership, but for a rescission of a fraudulent sale made by a majority of its maQagl:lts tOll. third person; and a return to the receiver of the property so attempted to be sold, a question would have arisen upon which the authorities differ, and which is, in my opinion, to be determined by the allegations and facts in each particular case. The cases of Sawyer v. Noble, 55 Me. 227, cited with approbation in Walker v. Powers, 104 U., S. 245, and Salvidge v. Hyde, Jacob, 151, are examples of the views which courts have taken agaitlst the union of such matters upon the ground that they are independent. The cases of HaJjes v. Heyer, 4 Sandf. Ch. 485, and of Attorney General v. Cradock, 3 Mylne & C. 85, are examples of It different v;iew, which was based, in the latter case, upon a state of facts peculiar to itself. The bill is, then, in substance, for the winding up of the affairs of the Bridgeport Company, and an accounting by its trustees and manager,. and alsoltsks for an injunction against a proposed sale upon the ground that, if consummated, it would be the execution of an intended fraud, and would still further waste the assets Cif the company. Such a prayer do.es n.ot make a hiU multifarious, for it would be It technicality, without foundation, if a partner could not, in addition to his remedies against tl;le already consummated frauds of his copartners, ask, in the same bill,· for It preventive remedy against a fraud not already consummated, which .is being planned, and which, if completed, would result in the scattering of his property. It is proper in such a bill for an accounting by one partner, if an injunction is asked against a proposed fraudulent sale, to make the proposed vendee a party to the suit, although heIX),ay have no interest in the accounting. 2 LindI. Partn. 880; Bel)an v. Lewis, 1 Sim. 378. So far as the defendant trustees are concerned, the bill does not join distinct causes of action. Its object is to show the necessity of a winding up by judicial action. The weight of the allegations is upon Mr. Hurd, but the necessity of a winding up by the interposition ofa court is enforced by the averment that the other trustees are too negligent .and inattentive to do the work themselves. I have intentionally refrained from a discussion of the general principles in regard to multifariousness, mindful that the attempt to state abstract propositions in regard to the subject is not fruitful of benefit. "Every case must be governed by its own circumstances." Gaines v. Chew, 2 How. 619. The demurrer is not allowed. v.32F.no.2-9

180
I '

FEDERAL ll.EPORTER.

WITTERS,

'!

':' I'

Receiver, etc.; ".

SOWLES,

Ex'r, and others.

(. :

(Circuit Court, D.Vermont.August 18. 1887.)
ASSETS-TRANSFER

1,.

, AJ;' tilxtilcutor representing had llufficient ,assets to pay all legacies, butfi;lIng no inventory, obtained"a decree that he pay'the legacies, and that the residue be paid to the residuary legatee, and afterwards transferred to the residuary with her assent, certaip. shares of bank pelonging to the estate, the dividends on were afterwards paid to the executor, who was the 'husband of the residuary legatee. The remaining assets were insufficient to satisfy the legacies. In an action brought, to charge the estate with an assessment qn the stock, kela. that the transfer was valid, and passed the title to . the residuary ltlgatee. . . . .',' .. ' " ' '
2. SAME-CONVEYANCE BY EXECU'l'OR-RESIDUARY. LEfGATElll.

'EXEcUTOlUl-PAYMENT OF Oll' BANK STOCK TO RESIDUA-ayLEGATEE..

A conveyance by an executor to the residuary legatee, who is his wife, is good at coinmon law. , :, "',:" , Dnder Rev. St. D. S. '§ 5151, rendering shareholders individually responsible for the liabilities of a national ban'lr. to the extent ofthe, value of:theirstock; and section 5152, providing that: estate of a sb,areb,older in: the hands of the executor shall be liable in like manner and to' the same extent that the testator would be if living,-assetswhich' have been transferred to devisees or legatees cannot be subjected to liabilities of the bank accruil),g after transr er .: ,,: ' .. ; '.,'. ' . '. '

8.

NA.TIONAL, BAN,KS-LIABILITYOF SHAREHOLDERS-EsTATlil OF SHARE:\IC;>LDERLIABILiTY OF LEGATEES AND DEVISEES. ' " '

4. SAME-A.SSE,SSMENT ON STOCK-LaBILITY OF LEGATEE.

5:

Ori the representations of the executor that he had morethansufficientas' sets in his hands to satisfy all' debts aud legacies, he wl\sdecrelld to pay deS, B. to do $0 until after t.\lefallure ?f the natlOnal bank III the testator was a stockholder, when he dehvered property'to her trustee in satisfaction. of the legacy. Held, that under the statutes,d.bove quoted, the legatee, and her trustee were chargeable with an accruing al\sessment upon testator's stock meet the liabilities beforeactUltI delivery to the legatee.' . ..
OF STOCK FORTAXES-LTRANSFER ON'BOOKS oiFRhrK.

In. 1865; ata.x collector assumed to se1150 shares Gf testator's bank stock for delinquellt and bi,d in by defenda?t E. B., were tran!\ferredon the books of thebank. E. S. recelvedthe dlVldends untl1 the validity of the'tax was adjudged: and afterwards they were received by testator..Hddthat; under the lawaof Vermont then in force relating to the enforpementoftaxes,no title passed",and,that.there was no suc1:l, acquiescence on the part testator as to makell\.e I\lilegood. . Where an executor, without consideration, transfers bank stock in trust for his own benefit. and to enable the transferee to of the bank, the title, for the purposes of assessment, remainswlij:l, the,executor.
" .. :;" '

6.' SAim"-'-TRANSFltIi OF 8'rocK-{)oNSIDERATION-TITLE."

7.

SAME-INSOLVENCy-AsSESSMENT-SET-OFF.

In an action by a receiver of an insolvent bank to charge the estate of a shareholder with an assessment on his shares, the executor claimed, bv way of set-off, that property belonging to the estate had been delivered to the bank, upon the understanding that it should be applied on the assessment if the bank should fail. Held not a proper subject of set-off, even though the bank examiner assented to the agreement.
TAXABLE PROPERTy-SWORN INVENTORIES-DISCLOSURE OF CONTENTS-EVIDENCE.

8.

Under Laws Vt. 1882, No.2, §§ 26-28, providing for sworn inventories by tax-payers of taxable property. the listers of the town, in an action between a receiver and stockholders of an insolvent national bank, will not be allowed to disclose the contents of such sworn inventory; nor will the town clerk,