Paul M. Mahoney v. Bethlehem Engineering Corporation Editorial Headnote 1. Majority stockholders, who make a contract for the benefit of the corporation, are not indispensable parties, although they may be necessary parties, to an action by a trustee in bankruptcy of the corporation, for breach of such contract. Hence, failure to join them is not ground for dismissal. 2. Suit was brought by beneficiary of contract. There was a di spute as to whether contract was to be performed in Massachusetts or in New York, since the Massachusetts law did not permit a third party to sue on a contract made for his benefit, while the New York law did. Held, defendant's motion for bill of particulars stating places where contract was made and was to be performed, should be granted. (Rule 12 (e)) LEIBELL, D. J. The plaintiff in this action is the trustee in bankruptcy of the Eastern Distilleries Corporation, a corporation organized under the laws of the State of Delaware and with its principal place of business at the times mentioned in the complaint, in the State of Massachusetts. Plaintiff was elected and appointed as said trustee in the bankruptcy proceedings of Eastern Distilleries Corporation in the United States District Court for the District of Massachusetts after the adjudication of the corporation as a bankrupt on January 5, 1938. The defendant is a New York corporation, with its principal place of business in said State. The defendant has made this motion under the Federal Rules of Civil Procedure (1) to dismiss the above-entitled action because the complaint fails to state a claim upon which relief can be granted [Rule 12 (b) (6)]; (2) to dismiss the action because of a non-joinder of parties; (3) to strike out specified paragraphs of the complaint on the ground that they are immaterial Rule 12 (f)]; (4) to direct the plaintiff to serve a bill of particulars [Rule 12 (e)]. The cause of action alleged in the complaint is for the breach of a contract to loan money. The agreements under which the advances were to be made by the defendant to the Eastern Distilleries Corporation were executed by two majority stockholders of the Eastern Distilleries Corporation, on the one hand, and by the defendant, on the other. The Eastern Distilleries Corporation was not a party to the agreements. **** a breach of contract to make a loan, standing by itself, involves no legal damage. *** The prospective borrower, however, may recover the special damage which an inability to obtain the money, under the peculiar circumstances of his case, has actually caused him." Avalon Constr. Corp. v. Kirch Holding Co., 256 N. Y. 137. The complaint contains allegations that, upon their face, are sufficient to show special damage. However, defendant contends that this contract was to be wholly performed in Massachusetts and that the law of Massachusetts should apply. Further, that under the Massachusetts law, (Mellen v. Whipple, 1 Gray 317; Central Supply Co. v. U. S. Fidelity & Guar. Co., 273 Mass. 139) since the bankrupt was not a party to the agreements, it cannot sue upon them. Plaintiff contends that the contract was made in New York, was to be at least partially performed here, and that plaintiff may sue on the contract as a third party beneficiary under the line of cases following Lawrence v. Fox, 20 N. Y. 268. See, Beaver v. Ransom, 224 N. Y. 233. I find it impossible to determine from the complaint or from the two agreements annexed thereto where the alleged agreements were made or where the monies were to be advanced. A motion to dismiss a complaint for failure to state a claim should be decided upon the complaint alone, or, if a bill of particulars has been served, upon the complaint as supplemented by the bill of particulars (Reilly v. Wolcott (S.D. N.Y.) decided March 27, 1939). In view of the absence of allegations necessary for its determination, I am of the opinion that the motion to dismiss the complaint for failure to state a claim upon which relief can be granted should be denied without prejudice, and that the plaintiff should be directed to serve a bill of particulars setting forth the place where it is claimed the alleged contracts were made and where the monies were to be advanced. The demand for a bill of particulars covers the first of these items; the latter is directed to be included in the bill. Upon the service of the bill of particulars, as hereinafter provided, the defendant may renew this motion, if it so desires. The motion to dismiss the complaint because of a non-joinder of parties is stated to be based upon the fact that William Pitt Mason, Jr. and Nathan Wolf, the aforementioned stockholders of the bankrupt who signed the agreements with the defendant, are not parties to this action. At this stage it would seem that they are "necessary" rather than "indispensable" parties. The failure to join them does not warrant a dismissal of the complaint (Wyoga Gas and Oil Corp. v. Schrack (M.D. Pa.) decided April 3, 1939); but rather that they be joined as parties as provided by Rule 19. However, I am of the opinion that the more practical solution is |