proposed to make in his letter of August 23d, and a sample of which he sent to the complainants, it did not contain gutta-l'ercha or its equivalent, and its manufacture should not have been objected to by theeomplainants; but, inasmuch as, long prior thereto, the defendant had been improperly violating his agreement, I do not think that the subsequent error of the, complainants oughtto be considered an adequate excuse for his oonduct. They should, however, withdraw their opposition or objection to his manufacturing a paste stay. Let a preliminary injunction issue, restraining the defendant' from the manufacture or sale, pendente 'Zite, of stays containing a stiffening blade, with one or two layers of guttapercha and two outer layersof fabric; it being also provided that the substitution of paste or glue for gutta-percha is not, during the continuance of the injunction, to be considered a breach of it.
BURNHAM: 11. RUNKLE.
employed by. raise money to be deposited· a.! a guaranty forlnlof a cOlltract awarded to defendant. borrowed the mORey from plaintiff, and deposited it, and defendant undertook to pay this money to M. if it should be for. feited. Di:lfendantfailedto perforn:l the contract, by reason of, whic11 the deposit wa,a forfeited, and 11e became liable to M. forthe amount and interest, and also liable for damages for breach of Contract. To secure release from 'liability for damages,. de. fendant ex,ecJlted a power of J.t' aut110rizing hi1;l1, to receive anytlling dU,e him under the contract, and to do anythin/l: necessary to obtain his release, etc..; and J. entered iRto an agreement with plaintiff by 'which he agreed, on behalf of d,efelldant,.t1:lat defendailt would pay to plaintiff the balancedue !;lim on account of amount loaJ:led by plaintiff to M·· lor Which defendant was responsible to said M. that defendant was bound .by the agreement to pay plaintiff the balance due ; , '
. 'r . ,
At Law., .Trial by the court, a jury having been waived by the stipulation of the parties. citizen of L9ndon, England, who Action by Santiago J. against .Daniel Runkle, a sues for the use of FrauciscoG. · ;citizenof New Jersey I to recover money due on a written . Babbitt & Lawrence, fOl'plaintiff· . TfaUiB ct Edwards, for defendant.
WAI,F.8, J. 'fhisaction is founded on a written agreement, which was entered into by the plaintiff and defendant, and out of certain with negotiations for the loan of a large sum of transactions money to the eityof Havana, in the island of Cuba', and for obtaining the award of Ii contract to the defendant and others for the construction of water-works for supplying the city with water.. On an examination of the testimony, and It consideration of the oral and written arguments of .counsel,' the' courtfin,ds the following facts to be proved by the evidence,
BURNHAM tl. RUNKLE.
or legally inferable therefrom, and on which judgment will be telldered: (1) On the 18th of March, 1882, contracts for a loan and water-works were awarded by the city of Havana to Daniel Runkle, the defendant; Walter fl.. Gilson, James H. Lyles, and Maddison & Co., of London; and, on the 27th of the same- March, Lino Martinez deposited the sum of $64,000, in Spanish gold, in the municipal treasury of Havana, "as a guaranty for the propositions which Messrs. Gilson, Runkle, and Lyles, and Maddison & Co., of London, have presented to the municipality of Havana for the loan of $5,600,000." (2) Martinez had been employed by Runkle, who was acting for him· self and his co-contractors, to raise the amount required to be deposited as a guaranty for the fulfillment of the contract; and in pursuance of this employment Martinez had borrowed the sum of $64,000 from the plaintiff, Burnham., (3) Runkle, Gilson, and Lyles undertook to repay this sum of $64,000 to Martinez at any time he should ask for the same, if it should be demanded by the city in consequence of their not having carried out the contracts for the water-works, or for any cause for which the city might retain the deposit, and, as a remuneration, and for the payment of interest to Martinez, they assigned to him the amount of $25,000, ,payable monthly, at the rate of 1.137 per cent., from the amounts they ahould receive for the works. 'This undertaking fell through, in consequence of the final abandonment of the contracts, but the fact remains that it was the understanding of all the parties that Martinez was to be repaid the sum of $64,000, with interest, and also to be remunerated lor his serviceS or expenses. (4) Subsequently to these proceedings Runkle becametheassignee of all the rights and interests of his co-contractors, under their contract' with the city of Havana, and thenceforward was solely entitled to all the profits that might accrue from its performance, and liable for the consequences of its non-performance. (5) Runkle' failed to perform the contract for the water-works, and, by reason of his default, the sum deposited with the city of Havana, as a guaranty, was forfeited, and he became liable for such damages as were sustained by the city on account of his failure. He also became responsible to Martinez for the repayment of the guaranty deposit, with interest, and the expenses incurred in effecting the loan from Burnham, amounting in all to the sum of$83,087 .36, as peraccount stated between Burnham and Martinez, on the 4th of August, 1884. (6) Runkle, being desirous of procuring a full and general release from all liability on account of his connection with the contract for the loan and water-works, executed in due form, on the 25th of June, 1884, a letter of attorney to Jose M. Mestre, who was then in the city of Havana, authorizing him to demand and receive such sum or 'sums of money and p,roperty of any kind, of rjght belonging to Runkle, "under or in connection with the contracts for the loan and water-works, made in consequence of the public bidding therefor, on the 18th of March, 1882, and which loan and contract were awarded to me, [him,]together
with Walter R. Gilson and Maddison and Company, and also James H .. Lyles," and "to do all things necessary in the judgment of my said attorney, and to obtain my. release from all .liabilityasone of the contractors 'in connection with the said loan and water-works; giving and unto my said attorney full power and authority to do and perform all and every act and whatsoever requisite and necessary to be dOlle, in and about the premises, as fully, to all intents and purposes, as I could do if persoJ;1allypresent," etc·. (7) By virtue of the authority conferred on him by the aforesaid letien)f attorney, Mestre, on the 4th of August,1884, acting for and in the' name of Runkle, entered into a: written agreement or stipulation, in the Spanish language, with Burnham. of which the following is a tranalation:
"This present 1s1:9 cl;lrtify. to which I desire to give all the force of a pubnc instrument. that I, Mr. 8.J·.Burnham. having receIved from Mr. Lino ¥artinez the sum of slxty,four thousand dollars gold, on account of the sum of $83.087.86 which results\ in my-fR'VOl from the account that under this date., has been presented to Mr. Lino Martinez in relation to the drafts drawn on the 24th of March, 1882, by Mr.: Hi J. QverlI)ann upon 14r. E. C. Maddison. of London, and indorsed to my <;lrder ,by the said Mr. Lino Martinez. the which were protested, for nou-paymentl. and protected in due course I;>y the Messrs, Baring Brothers and Company, of London, as the representatives of the Messrs··T. C. Burnham and Company, have agreed. in regard to the balance of $19,087.86 that still remains unpaid, as follows: Recognizing, as I recog.. nfze, Mr. Daniel Rimkle'as the8$signl'e,of Mr. Walter H. Gilson, whoin his turn was the assigqeeof MI'. E. C,MlJ,ddison, and for the;! firm of Maddison and Company, I bind myself to place at the disposal of said Mr. Runkle the shares of the Charnwood Forest Railwar Company, of the i,nal value of fourt'een thousalld'pounds sterling, which the aforesaid Messrs. Maddison & Company deposited hi :my·bands, and transferred to me as guarantyfor the reimbursement of the amoimt of the aforesaid drafts, and the panses and interest relating thereto., so soon as such balance of $19.087.,36 shall be satisfied by the aforesaid Mr. Runkle, whicbit is to be done within the period of three months, counting frqm the date hereOf; it being left to his discretion either, to do SO directly, or to direct that. if the said shares deposited there be sold, (in accordance witbsuch instructions that for Buch purpose he 'may give,) such portion as may be necessary for the reimbursement of such balance of $19,087 .36; which being covered the remaining shares shall remain eU at the free disposal: of Mr. Runkle, as well as any balance in cash that may on the partial sale of strch shal1es. The sum owing $hall ,carry interest ,at nine per cent. complete.payment. Mr. Jose ¥anuel Mestre. as the attorney in fact of,Mr.Runkle, subscribes. this present lation by way of assent. in the name' of his princIpal. ' 'That. in order that it :may have all its due effect, this is: done and signed in triplicate, of the salme 'tenor, one for each party, at Havana, the 4th of Augllst,
'. "NoJa., At the
tbat beatr' $illns .and rights of actIOn that belong ,to hIm under t.heforegomgmsttument. sUbrogatmg him in his place and ste,ad; by reason of having received 'f,rOtnhim the aforesaid balance of $19,087 ;36;'but on the understandingtliatsaid Burnham remains alwaY81:ioundM to sell shares of stock. inqllestionto the order of Mr.
of signing, Mr.S.
Runkle, as set forth, and to deliver to the latter the balance of the proceeds of the sale, and Datedasabove'.! , ' ; , [Signed] "JOSE MANL. MESTRE· ."S. J. BURNHAIl.
"As witnesses: "E. CoSCULLUELA.
ZABARTE Y ,'pARIS.
(8) Runkle had no property or debts belonging to or due tQ him, in the city of Havana, and the letter ,of attorney was executed for, the sole purpose of authorizing Mestre to procure his release from any and all liability as ,8. contractor in connection with' the water-works; and there is UQ proof that Mestre received notice of the revocation of the letter before he signed the agreement with Burnham. (9) Martinez exerted himself to obtain fro,m, the authorities of Havana Runkle, and the return of the deposit ,money, in considthe release , eration of Runkle entering into the agreement with Burnham. (10) The right of action, accruing to Burnham under the agreement, was assigned by him to Candido Zabarte y Paris; and by the latter to Francisco G. Mediavilla.
The opinion of the court is that the agreement, of August 4, 1884, was assented to by Runkle, through Mestre, who had full power, under the letter of attorney, to bind his principal. The consideration for the agreement. on the part of Runkle, was his release from liability under his contract with the city of Havana, the return of the deposit money, both obtained by Martinez, and'the remuneration to Martinez for interest and expenses incurred in making the loan from Burnham, and for Martinez's personal services in effecting this consummation. In making the agreement, of August 4th" Runkle only exchanged creditors. Martinez was indebted to Burnham in the sum of 819,087.36., and Runkle was indebted to Martinez for Ii like amount. By the agreement, Runkle assumed the payment of this sum to Burnham in the manner set out in the agreement. Judgment will be entered for the plaintiff for 819,087.36, with interest at the rate of 9 per cent. per annum from August 4, 1884, to the date of the entry thereof,-that is, for the period of 5 years, 3 months, and 11 days,-being $9,070.46, amounting, principal and interest, to the sum of $28,157.82.
BARR 11. PITTSBURGH PLATE-GLASS
Co. d al.
(Circuit COurt, W. D. Pell/TUJ1/l'lX1ll11.a. November 21,1889.)
CoRPORATIONS-RiGHTS Oli' BTOCKEOLDERS-INlUNOTION AGAINST CORPORATION.
A stockholder in a manufacturing corporation flIed a bill against the corporation. and all the directors thereof, and another stockholder, charging that the latter defendants had entered into a conspiracy to do an unlawful and fraudulent act, in furtherance of their individual interests, which would destroy or seriously impair the. of .the property of the corporation; that the directors and their codefendant 'stollkholder held among themselves seven-tenths of the stock of the cor· poration. ,and that they bad procured a vote of the stockholders authorizing the directors to carry out the project,-the bill praying for an injunction to restrain the corporation'from consummating the fraudulent transaction. ' Upon demurrer to the bill,. held., that the plaintiff could maintain the bill to his indiVidual rights, and that his suit was not to be defeated because the blU did not show a pre· vious effort on his part to secure redreu by an appeal to the directors or stookholdera for remedial aotion. '
In Equity. special demurrers to the bill of complaint. S. Schoyer, Jr., S, B. Schoyer, andW. R. Errett, for complainant. D. T. Wa,tson an,d Dalzell, Scott Gordon, for defendants. Before McKENNAN and ACHESON, JJ.
PER CURIAM. In so far, at least, as the bill relates to the Ford City Works, it is not founded. as the demurrers assume, upon a right of action belonging solely to the corporation defendant; but it is really based on the plaintifrs individual rights. The injury here complained of directly affects the plaintif;f personally, and he seeks the protecting power of the court against alleged fraud of the governinp; board of directors. The controversy il'j between the plaintiff and the directors of the corporation and another st9ckholder, who, in viqlation of the plaintiff's rights, are: about to proceedtt> do an unlawful act, which will destroy or seriously impair the Value of property in which the plaintiff has an interest; No one outside ofthe corporation has any concern in' the controversy, nor is litiyoutsider here sued. Thej}Orporation itself is areal defendant. the bill praying for an to restrain it from consummating the alleged fraudulent'transaction. The bill alleges not only that all the elirectors areacting in their own.j.nterest, and in fraud of the rights of the plaintiff, but also that they and tl1eirc<H)()nspirator (a defimdant herein) together hold seven-tenths of the stock of the corporation; and, further, that they have procured a vote olthe stockholders authorizing them to carry out the contemplated fraudulent project. In view, then, of these allegations, which for the present we must accept as true, it would be most unreasonable to defeat the plaintiff's suit because the bill does not show a previous effort on his part to obtain redress within the corporation by an appeal for remedial action to the directors or stockholders. The demurrers must be overruled, with leave to the defendants to answer the bill within 80 days; and it is 80 ordered.