578
FEDERAL REPORTER.
ter to assess and report the damages snstained by plaintiff. On the twenty-third day of August defendant moved to strike out the clause in the decree awarding damages, and referring it to a master, npon affidavits showing gross ,laches on the part of the plaintiff in prosecuting its claim, and also that the manager of the plaintiff company had connived at defendant's infringements. George H. Lothrop, for the motion. Alfred Russell, for plaintiff. BROWN, J. A motion to amend an interlocutory decree by"striking out the award of damages, upon affidavits tending to show that if all the facts in the case had been put in evidence, and called to the. attention of the court, a different decree would have been rendered, is a novelty in equity practice which we are not disposed to sanction. Errors in judgments or decrees are divided into errors clerical and errors judicial. The former may be amended even after term, pro· vided the existence of such error is shown by the record, and not otherwise. Hudson v. Hudson, 20 Ala. 364; Thompson v. Miller, 2 Stew. 470; Dixon v. Mason, 68 Ga. 478; Russell v. McDougall, 3 Smedes & M. "Atkinson v. Railroad Co., 81 Mo. 50; Selz v. First 19 N. W. Rep. 43. Errors judicial Nat. Bank, 60 Wis. 246; S. can only be amended upon rehearing or appeal. Forquer v. Forquer, 19 Ill. 68; Stringer v. Anderson, 23 W. Va. 482. We have found no case which would justify us in altering this de· cree, upon motion, in a material particular, upon the evidence then before the court. Much less can it be done upon evidence sought to be injected into the case by affidavits. Defendant's only remedy, if at this late day he has any remedy at all, is to have the decree set aside, and move for leave to introduce the new testimony, and for 80 rehearing.
. GRISWOLD
V.
HAZARD and others.
(Circuit Court, D. Rhode Ialand. September 10, 1886.) INJUl!ICTION-DECREE OF COURT OF GENERAL EQUITY JURISDICTION,
The decree of a court of general equity jurisdiction, in a case where the defendant therein was personally served with process within the jurisdiction of the court, and where the court appears to have had jurisdiction of the subject-matter of the bill, will not be impeached upon a bill denying only the existence of the facts required to justify the plaintiff therein in invoking the exercise of that jurisdiction. See Hazard v. Griswold, 21 Fed. Rep. 178.
Demurrer to Bill. The opinion states the facts. A. Green and S. R. Honey, for complainant. E. Metca{f and E. Merwin, for respondents.
GRIZWOLD fl. HAZARD.
579
Heard by CoLT and CARPENTER, JJ.' OARPENTER, J.. The respondents in this case, on March 3, 1883, commenced, in the supreme court of the state of Rhode Island, an action of debt on a bond dated August 24, 1868, and executed by ThomasC. Durant as principal, and the complainant and S. Dexter Bradford as sureties, binding them jointly and severally to Rowland G. Hazard and others in the sum of $53,735; the condition of which is that Durant "shall on his part abide and perform the orders and decrees of the supreme court of the state of Rhode Island in the suit in equity of Isaac P. Hazard and others against Thomas O. Durant and others, now pending in said court, within and for the county of Newport." The'breach assigned in the declaration is that Durant,has not performed a decree by which that court, on December 2, 1882, ordered him to pay into its registry the sum of $16,071,659.\)7. After oyer prayed and granted, the complainant filed 10 pleas in bar, and the case was removed on his petition into this court, where the respondents filed special demurrers to five of the pleas. These demurrers were sustained in Hazard v. Griswold, 21 Fed. Rep. 178. The complainant now brings this bill in aid of his defense to that action. He sets out all the proceedings in the case of Hazard v. Durant in the supreme court of Rhode Island, and in support of his prayer for an injunction he makes the following allegations: "Further complaining, your orator says that. by the laws of the state of Rhode Island, a stockholder in a corporation could not maintain in the said supreme court of Rhode Island, either in equity or at law, in his own name, <\ suit founded on a right of action existing in thll corporation itself, and in which the corporation 'is the appropriate plaintiff, unless there exists, as the foundation of the suit, some action, or threatened action, of the managing board of directors or trustees of the corporation, which is beyond the authority conferred on them by tbeir charter or other source of organization; or such a fraudulent transaction completed or contemplated by the acting managers in connection witb some other party, or among themselves, or with other shareholders, as will result in serious injury to the corporation, or to the interest of the other shareholders; or where the board of directors, or a majority of them, are acting for their own interest in a manner destructive of the corporation itself, or of the rights of the other shareholders; or where the majority of shareholders themselves are oppressively and illegally pursuing a course in the name of the corporation which is in violation of the rights of the other shareholders, and which can only be restrained by the aid of a court of equity; or unless the suit should be founded on a state of facts in which, to prevent irremediable injury or a total failure of justice, the said court would be justified in exercising its powers: whereas, your orator asserts, on information and belief, that in the said suit in equity of Isaaa P. Hazard and othel's against Thomas C. ])urant and others no such foundation existed, nor did any such state of facts exist. . "Further complaining, on information and belief, your orator says that before commencing said suit the said Isaac P. Hazard did not, nor did any other stockholder of the said Credit Mobilier of America, exhaust any of the means within his reach to obtain within the said corporation the redress of the grievances alleged in his said bill; that he did not make any effort, either with the managing body of the corporation, 01' with the stockholders thereof as a body,
580
to induce it or them to take remedial action against the said Thomas C. Durant; nor did he, or any other stockholder of the said corporation, show to the said supreme court of RhodE; Island that he, or any such stockholder, had made any such efforts, or that such efforts were impossible, and that it was unreasonable to requirA them. "Further complaining, your orator says that, by the laws of the state of Rhode Island, the 'said supreme court of Rhode Island had no jurisdiction over the said suit in equity of Isaac P. Hazard and others against Thomas C. Dnrant and othe1's, unless the said Isaac P. Hazard, or some other stockholder of the said Credit Mobilier of America, had, before commencing the said suit, exhausted every effort within the said corporation to obtain the redress of the grievances alleged in the said bill. "And your orator avers, and on information and belief complaining says, that, before bringing said suit in equity in the supreme court of the state of Rhode Island, neither the complainant Isaac P. HazHrd, nor any other of the stockholders of the said Credit Mobilier of America, requested the managing committee or the board of directors or the stockholders of said Credit Mobilier of America, in stockhohlers' meeting assembled, or the said Credit Mobilier of America, at any meeting of said corporation, to begin legal or equitable proceedings, or cause such proceedings to be begun, in the name of the corporation against the said Durant, before himself filing said bill in equity, "And your orator further shows that, by the laws of the state of Rhode Island, the said supreme court of Rhode Island had no jurisdiction in 01' over the subject-matter of the said suit in equity upon any ground, whether or not the same has been heretofore alleged herein."
We do not think the bill can be sustained by the general allegation of want of jurisdiction, and the particular allegations above quoted do not, we think, amount to a denial of jurisdiction. The reasoning of Hazard v. Griswold, ubi supra, is directly in point. Doubtless it was necessary for the supreme court, before proceeding to a decree, to find some unlawful act on the part of the corporation, or its officers or stockholders, and a certain request or demand on the part of the complaining stockholder for redress of his grievance. So, too, it was necessary to find other facts alleged in the bill; especially the fact that the respondent was indebted to the corporation. But to deny the existence of any of these facts, is not to allege want of jurisdiction over the whole subject. The allegations of the bill deny only the existence of the facts required to justify the stockholders in invoking the exercise of that jurisdiction. Since the supreme court is a court of general equity jurisdiction, and since it does not appear that Durant was Dot served with process within the jurisdiction of that court, we find no allegation in the bill of want of jurisdiction in the court which entered the decree here sought to be impeached. As in the case of Hazard v. Griswold, we express no opinion on the question whether want of ju:tisdiction of the former suit on any ground could be set up in defense to an action on the bond. The demurrer will be sustained.
VENNER
ATCHISON, T.
&;
S. F. R. CO.
581
VENNER v. ATOHISON, T. & S. F. R. CO. and others. (Oircuit Oourt, D. Kansas.
1886.)
1.
RAILROAD COMPANIES-(JHARTER-PURCHASE OF ROAD IN ANOTHER STATECONNECTING LINES.
The charter of a Kansas railroad (Terr. Laws 1859, c. 47) authorized it. among other things, "to construct a branch to any point on the southern boundary of Kansas in the direction of Gulf of Mexicoj" to make necessary contracts, etc., with other railroads intC'l'sectin.q 0'1' connecting with it, for "running their road in connection with other roads in other states." etc. The legislature subsequently (Laws 1873, c. 105. § 1) passed a general law making it lawful for any railroad to purchase or guaranty the stock or bonds of any connecting or intersecting road. The railroad in question bought out a railrpad in· corporated in Texas, to which congress (St. at Large 1883-84. c. 177) had granted a right of way, through the Indian Territory, to the southern boundary of Kansas. Held, that the purchase was within the power of the Kansas company. Atchison, T. & S. F. R. 00. v. Fletcher, 10 Pac. Rep. 596.
2. SAME-CHARTER-AMENDMENT TO CHARTER-AcCEPTANCE.
The board of directors of a corporation, who, under the charter, are vested with" all the corporate powers" of the company, may not, as a general rule, have the incidental power of accepting from the legislature an amendment to the charter, the effect of whicb is to enlarge beyond the wish of the stock· holders the extent and variety of the company's business and investments, yet under the circumstances of the case it must be held that there had been such acquiescence by the stockholders as to constitute an acceptance by the corporation beyond the challenge of the present plaintiff, a recent purchaser of stock. Where a stockholder buys into a railroad corporation, with knowledge that it is acting on an assumed power to invest in the stock of railroad corporations outside the state of its creation, his purchase under such circum-' stances will be regarded as an implied recognition on his part of such assumed power. DOUBLING STOCK-EsTOPPEL.
3.
SAM E-ASSUMED POWERS-STOCKHOLDER-NOTICE.
4.
Stockholders who have voted for an unauthorized doubling of stock by their company, or who have voluntarily accepted the benefits of such action. or who bought into the corporation subsequent to the issuance of such stock, are estopped, as against the corporation, to contest the legality of such actIOn. COURTS-FEDERAL CoURTS-DECISIONS OF STATE COURTS-STATE STATUTES.
5.
The decisions of the highest court of a state upon the interpretation of the statutes of that state granting certain powers to a corporation of its own creation, though not conclusive upon the federal courts sitting in that state, are most persuasive.
6.
EQUITy-DISCOVERy-RELIEF.
Where a bill in equity asks for discovery as well as for relief, but is substantially a bill for relief, if it is insufficient for relief it also fails for discovery.
In Equity. On demurrer to bill· · H. Benton, Jr., W. A. Underwood, and Joseph G. Waters, for comJ. plainant. George R. Peck and George W. McCrary, for defendants. BREWER, J. The bill is filed by Clar!3nce H. Venner, a ditizen of Massachusetts, against the Atchison, Topeka & Santa Fe Railroad Company, its secretary, and three of its directors, all citizens of the state of Kansas. Complainant alleges that on the fifteenth day of
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