(CIrcUIt CoUrt, S. D. New 18&1.)
CIRCUIT COURTS-EFFECT OF DECISIONS IN OTHER CIRCUITS.
A decision in another circuit, in an action between two railroad companies, that the right of action for unpaid dividends due under a lease 'was in the lessor 'company, will be foIiowed in an action by stockholders of that company against the lessee for an accounting of such dividends.
This was a suit by William Reed against the Atlantic & Railroad Company to recover dividends alleged to be due from the latter company to the plaintiff as a stockholder in 'the Pacihc Railroad Company, under the terms of a lease made by the Pacific Company to the defendant. EdwardL. Andrews, for plaintiff. John E. BUl'rill, for defendant. WALLACE, Circuit Judge. I should incline to the opinion, were it not for the decision of the .circuit court for the district of Massachusetts, that the plaintiff, as one of the stockholders of the Pacific Railroad,could maintain this action; and that its directors were not his agents, or the agents of the stockholders generally or of the cor· poration, in accepting a surrender of the lease made by the corporation to the defendant. It would seem that, by the lease of all its property to the defendant for 999 years, with a power to mortgage. the Pacific Railroad practically abdicated all its functions, dissolved its relations with its stockholders, and constituted its stockholders creditorsof the defendant. By the terms of the lease, it was to maintain its corporate 'organization in the interests of the defendant, and was also to retain sufficient vitality to re-enter and take possession of the demised property, in case the interest to its bondholders, or dividends to its stockholders, were not paid the defendant according to the covenants. For all practical purposes, the corporation was as defunct as anything short Qfa judgment Qfdissolution could make it, and this was the result contemplated by aU the parties to the lease. If its directors had accepted 'a surrender under circumstances which, in any conceivable way, could have :inured to the interests of its stockholders or creditors, their action might be deemed as equivalent to exercising the power of re-entry. :aut in the suit brought in the name of the corporation against the defendant to recover, among iother things, the stockholders under the lease, it was decided, by a court of co-ordinate jurisdiction with this, that the cause of action was in the corporation, 'and not in the individual stockholders. Pacific R. R,: v. Atlantic & PI R. Co., 20 Fed. 277. That decision is entitled to great respect. Upon the case in the form in which it was there presented, the conclusion reached by the court
1 This case has been heretofore reported in 22 Blatch!. 469, and is now published in this series, so as to include therein all circuit and district court cases elsewhere reported which have been inadvertently omitted from the Federal Reporter or the Federal Cases.
MILLER· V. PERRIS IRRIGATION DIST.
8eems reasonable and souIid. It is certainly desirable that the rights of all the stockholders, and the liability of the defendant to them, be settled in one controversy, and it may well be considered that the corporation retains sufficient life to represent its stockholders in such a suit. In any view, it would be unseemly for this court, in a suit upon the same lease, brought by one of the stockholders, to recover part of the same dividends, to hold the contrary. Such a decision might result in two jl1dgmentsagainst the defendants, in different jurisdictions, for the dividends. "Under such circumstances," as was well said by Emmons, J., in Vulcanite Co. v. Willis, 1 Ban. & A. 573,.Fed. Cas. No. 5,603, "every suggestion of propriety and fit public action demands" that the decision of the co-ordinate tribunal "be followed until modified by the appellate court." Judgment is ordered for defendant.
PERRIS IHRIGATION DIST.
(Circuit Court, S. D. California.
No. 752. FA.CTO PUBLIC CORPORATION-COLLATE1U.L ATTACK ON ORGANIZATION. Where a reputed pubUc corporation Is acting under the forms of iaw, unchalienged by the state, the validity of Its organization cannot be brought In question by priv.ate parties. Neither .the· nature nor the extent of an Ulegallty In Its organization can atl'ect its ·existence, If It be acting unde!.' color of law, and the state makes no complaint.
DECREE OF CONFIRMATION RES
ORGANIZATION OF IRRIGATION DISTRIcT JUDICATA.
Where proceedings are had In the proper coun, lIS provided by Act Cal. March 16, 1889,· giving the superior court of the county in wblch the lands of an irrigation district are situated power to determine the lelrality and valldlty 'Of each and all the proceedings for the organization of such district, the decree rendered thereon. declaring said district to have been duly and legally organized, is conclusive against any attack for fraud or illegality In any of the proceedings for such organization.
S. SUIT AGAINST IRRIGATION DISTRICT - VALIDITY OF ORGANIZATION - LIMITA-
A suit in equity, so far as It seeks rellef on the ground of fraud or lllegallty in proceedings for the organization of an irrigation district, is barred if brought two years after the order is made by the board of county supervisors declaring the district duly organized, under Act Cal. March 7, 1887, fi 3, as amended by Act March 20, 1891.
'- INJUNCTION-IRRIGATION DISTRICT-TAX DEED-ACCRUAL 011' CAUSE OF ,AcTION.
The right to enjoin the directors of an irrigation district from taking a deed complainant's ia.nd bought in under tax saie, and from making future assessments, accrues with the threatened making .ot the deed and levy of assessment, and not with the issuance and saie of the bonds, for the pay· ment of which such sale was made and ;such assessments are threatened.
Works & Lee, for complainant. L.r,.. Boone and O. A. Trippet, for JEtna Iron & Steel Co. C. C. Wright, for Erskine, Lacy, and. others. WELLBORN, District Judge. This is a suit for a decree declaring the proceedings'fOr the organization of the Perris irrigation district, cancelinl' the bonds issued by laid district, and enJoin-