Tangible facts to sustain such averments must be pleaded.8 88 It has been said that as much certainty is required in a bill by a stockholder to enforce a corporate right as in a bill by a corporation for the same purpose.89 A motion for a bill of particulars may in a proper case be granted, if the bill is deficient in certainty.90 It has been said that the allegations required by the rule are jurisdictional and cannot be supplied by amendment; 91 but the question as to the sufficiency of a bill, under this rule, cannot be certified directly from the District Court to the Supreme Court of the United States,92 and it has been held that it is waived unless specifically raised by a motion to dismiss.93 An allegation that complainant is the bona fide and lawful owner "of record" of a specified number of shares of the stock of the corporation, is a sufficient averment that the complainant is a stockholder.94 It was held that an omission of the date upon which the complainants became shareholders was not a cause for dismissing the bill but justified a motion for further and better particulars.95 It has been held: that such a bill must contain an allegation that the complainant and his predecessors in title, since the transaction which he seeks to set aside, have not acquiesced in the same; 96 that a stockholder cannot, in the same suit, seek, on his tions of all due and unpaid divi- 88 Schell v. Alston Mfg. Co., 149 Fed. 439; Smith v. Chase & Baker Piano Mfg. Co., 197 Fed. 466; Continental & C. Tr. & S. Bank v. AllisChalmers Co., 200 Fed. 600, 611. See supra, § 137. 89 Whitney v. Fairbanks, 54 Fed. 985. 90 Whitaker V. Whitaker Iron Co., 238 Fed. 980; Krouse v. Brevard Tannin Co., 249 Fed. 538. 91 Dickinson v. Consol. Traction Co., 114 Fed. 232, 242. 92 Venner v. Great Northern Railway Co., 209 U. S. 24, 52 L. ed. 666. 93 Granite Brick Co. v. Titus, C C. A., 226 Fed. 557. 94 Continental Securities Co. V. Interborough R. T. Co., 165 Fed. 945, 963. 95 Krouse v. Brevard Tannin Co, C. C. A., 249 Fed. 538. 96 Venner v. Atchison, T. & S. F. Ry. Co., 28 Fed. 581, 591; Trimble own behalf, to cancel stock which he holds, and also, on behalf of all the stockholders, to set aside corporate transactions,97 but that he can pray in the same bill for a cancellation of an illegal issue of stock to others, an injunction restraining the transferee from voting upon the same and a receiver of the corporation; 96 or for an injunction against an illegal issue of bonds and when the corporation is insolvent also for a public sale of its assets and their distribution among the creditors.99 Under the former rules there were rulings that an equitable owner of stock, whose title was contested, could not maintain such a suit.100 But the soundness of these decisions may be doubted. Under the new rules, the doctrine that equity having once obtained jurisdiction will afford relief, may be enforced; and there can be little doubt that the holder of a certificate of stock, endorsed in blank, may bring such a suit before the stock has been transferred to him upon the books of the corporation, although out of abundant caution it might be prudent to join as a party the person in whose name the stock is registered.101 The maxim that he who seeks equity must do equity 102 is applied to stockholders' bills 103 and it has been held: that when it is sought to set aside a mortgage securing bonds an offer to return the money received from the bondholders is required 104 but that every tender or offer need not be made or alleged, which might be necessary if the suit were brought by the corporation.105 v. American Sugar Refining Co., 61 N. J. Eq. 340. See Church v. Citizens' St. R. Co., 78 Fed. 526. Contra, Brazil v. Isham, 12 N. Y. 9, 17; Pollitz v. Gould, 202 N. Y. 11, 38 L.R.A. (N.S.) 988, Ann. Cas. 1912D, 1098; Coatsworth v. Lehigh Valley Ry. Co., 115 App. Div. (N. Y.) 7; Continental Securities Co. v. Belmont, 75 Misc. (N. Y.) 234, 250. 97 Church v. Citizens' St. R. Co., 78 Fed. 526. 98 Howard v. National Telephone Co., 182 Fed. 215. 99 Granite Brick Co. v. Titus, C. C. A., 226 Fed. 557, 561, 564. 100 Inman v. New York Interurban Water Co., 131 Fed. 997, 999; 103 Collins v. Penn-Wyoming Copper Co., 203 Fed. 726. 104 Ibid. 105 Edwards v. Mercantile Trust Co., 124 Fed. 381, 391; Citizens' Sav. & Tr. Co. v. Illinois Cent. R. Co., C. C. A., 182 Fed. 607. It has been said that the maxim that he who seeks equity must come with clean hands 106 does not apply to such a suit unless it would have been applicable to a suit by the corporation.107 It has been held that where the cause of action is one which the corporation might enforce at common law, the statute of limitations applicable to such suits at common law must be applied thereto.108 A delay of twelve years to recover for injuries. from the negligence of the directors was held to be such laches as to prevent recovery,100 but when the transaction sought to be set aside had been concealed, it was held that there could be no laches by delay before its discovery.110 A stockholder who had failed to intervene in a former stockholders' bill of which he had knowledge was held to be bound by the judgment therein rendered.111 The suit must be brought in equity, even when it is brought to recover damages for an injury through violations of the Anti-Trust Laws.112 Unless a receiver has been appointed, the corporation is an indispensable party to the suit.113 When the joinder of some of the directors would oust the jurisdiction, they are not indispensable parties, although the bill seeks relief because of transactions in which they took part with other directors who are made defendants.114 In a stockholder's suit, a corporation, if it is not alleged to be under the control of the defendant or to resist the relief sought should be aligned as a complainant for the purpose of ascertaining the diversity of citizenship which determines the jurisdiction.115 In a stockholder's suit to enforce a right of his corporation, where it is shown that the corporation is under the control of the other defendants, it will be treated as upon the same side of the controversy that they are, for the purpose of determining the juris 106 Supra, § 79b. 107 Luther v. Garnsey, N. Y. Sun. Ct. Sp. Tm., N. Y. L. J. Feb. 28, 1914. 108 Kelly v. Dolan, C. C. A., 233 Fed. 635. 109 Kelly v. Dolan, C. C. A., 233 Fed. 635. 110 Elder v. Western Min. Co., C. C. A., 237 Fed. 966. 111 Dana v. Morgan, 219 Fed. 313. See supra, § 114-116, infra, § 186. 112 United Copper Securities Co. v. Amalgamated Copper Co., 244 U. S. 261. See Kelly v. Dolan, C. C. A., 233 Fed. 635. 113 Porter v. Sabin, 149 U. S. 473, 37 L. ed. 815, supra, § 120. 114 Krouse v. Brevard Tannin Co., C. C. A., 249 Fed. 558. 115 Iron Moulders' Union v. NilesBement-Pond Co., C. C. A., 258 Fed. 408, reversing 246 Fed. 851. See § 41 supra. diction.116 In one to prevent the majority of the stockholders from causing the deportation to act in fraud of the minority, the corporation is to be aligned on the same side as the majority stockholders.117 It has been held: that in a stockholders suit, where the plaintiff has failed to comply with the equity rules by showing efforts to secure action by the other stockholders on an excuse for such failure, the corporation is to be treated as upon the same side of the controversy as the complainants.118 Where the controversy for the control of the corporation transcends the rivalry of those claiming to be members of its board of control and the corporation itself is a mere instrumentality or holder of the title, it is properly made a party defendant and should not be aligned as a plaintiff merely because the plaintiffs belong to the faction that claims the power to appoint the members of the board.119 In such a case, it has been held that trustees of the corporation, although in sympathy with the complainant should be aligned with the defendant.120 In a stockholder's suit to recover assets of a corporation it was held that a statutory 116 Doctor v. Harrington, 196 U. S 579, 49 L. ed. 606, overruling a number of decisions of the lower courts to the contrary. Hyams v. Calumet & Hecla Min. Co., 221 Fed. 529; Whitaker v. Whitaker Iron Co., 238 Fed. 980; Cutting v. Woodward, C. C. A., 255 Fed. 632. See Woolsey v. Dodge Fed. Cas. No. 18,032, 6 McLean, 142; s. c., as Dodge v. Woolsey, 18 How. 331, 15 L. ed. 401; De Neufville v. New York & N. R. Co., C. C. A., 81 Fed. 10; MacGinniss v. Boston & M. Consol. Copper & Silver Min Co., 119 Fed. 96, 55 C. C. A. 648; Redfield v. Baltimore & O. R. R. Co., 124 Fed. 929; Mills v. City of Chicago, 127 Fed. 731; Groel v. United Electric Co. of New Jersey, 132 Fed. 252; Howard v. Nat. Telephone Co., 182 Fed. 215; Crawford v. Seattle, R. & S. Ry. Co., 198 Fed. 920. Before the decision of Doctor v. Harrington, 196 U. S. 579, 49 L. ed. 606, it was held: that where a stockholder's bill did not conform to the requirement of the equity rules, by showing efforts made to secure action by the stockholders, or an excuse for such failure, the corporation must be aligned with the complainants. Waller v. Coler, 125 Fed. 821. 117 De Neufville v. New York & N. Ry. Co., C. C. A., 81 Fed. 10; Redfield v. Baltimore & O. R. Co., 124 Fed. 929; Elkins v. Chicago, 119 Fed. 957. 118 Waller v. Coler, 125 Fed. 821; Groel v. United El. Co., 132 Fed. 252. These cases were decided before Doctor v. Harrington, 196 U. S. 579, 49 L. ed. 606. A similar ruling has been made since that decision. Gage v. Riverside Trust Co., 156 Fed. 1002, 1007. 119 Helm v. Zarecor, 222 U. S. 32, 56 L. ed. 77. But see Stephens v. Smartt, 172 Fed. 466. 120 Kelly v. Dolan, 218 Fed. 966. receiver who had been made a defendant was on the plaintiff's side of the controversy.121 It has been said: that where a small minority of the stockholders have been injured by a sale, it will not always be rescinded; but that the court may direct a valuation of the complainants' stock and the payment to them of the same under such a penalty as will give them ample security.122 A statute which provides that stockholders who do not consent to a sale or consolidation shall be paid the value of their shares does not afford an adequate remedy at law which will prevent a dissentient from enjoining such a consolidation or sale in violation of the statutory requirements. 123 Where an injunction is denied, the court may retain jurisdiction to grant any equitable relief to which the complainants may appear to be entitled after the effect of the consolidation is known.124 In a stockholders' suit to recover property fraudulently transferred, to wind up the affairs of a corporation and to distribute its funds. among all the stockholders, the creditors must be given an opportunity to come in and enforce their claim against these funds.125 Where, pending a stockholder's suit against the company and the other stockholders, the latter paid into court a sum of money to abide its order and satisfy the complainant's demand, he was allowed to recover the entire amount after the reduction of costs. 126 The stockholder's bill to enforce a cause of action owned by his corporation is for the benefit of the corporation and not for the benefit of the stockholders. Ordinarily no relief will be granted which would not be for the benefit of the corporation.127 Where a majority of the stockholders have authorized a sale of the assets to a new company in which they received shares, but the minority do not; the burden of proving that the purchase price was the value of the property rests upon 121 Sharpe v. Bonham, 224 U. S. 241, L. ed. 747. 122 Binney V. Cumberland Ely Copper Co., 183 Fed. 650, 653. 123 General Inv. Co. v. L. S. & M. S. Ry. Co., C. C. A., 250 Fed. 160. 124 Simon Borg & Co. v. New Or leans City R. Co., 244 Fed. 617. 125 In re Dennett, 221 Fed. 350. 126 Beltz v. Great Western Lead Mfg. Co., 251 Fed. 696. 127 Collins v. Penn-Wyoming Copper Co.; Continental & Commercial Trust & Savings Bank v. same, 203 Fed. 726. |