Page images
PDF
EPUB

[§ 3023 is sued to release a part of the fund deposited for security.54 Under statutes or the charter it is sometimes made possible for a corporation to join as defendants parties who could not be joined in an ordinary law action.55 Although a state cannot be sued, it is proper to name as defendants the officers of the state when the suit is to restrain the enforcement of an alleged unconstitutional law of the state to the destruction or injury of the corporation's rights.56

§ 3023.Necessary or proper co-plaintiffs. Officers, members or stockholders are not necessary co-plaintiffs unless they have an indivisible fight with the corporation to the relief sought; 57 accordingly stockholders or members need not join in an action for damages or injunction for nuisance or other torts,58 or to enforce a contract.59 The former owner of a chose in action is not a proper co-plaintiff merely because the title of it passed on its formation to the corporation.60 Even a holding corporation is represented by its subsidiary suing as plaintiff.61 In suing as a trustee of a charity the corporation may

Co.'s Appeal, 1 Monag. (Pa.) 692, 1 L. R. A. 230, 15 Atl. 459.

54 In an action to require the superintendent of insurance to transfer a portion of a security fund deposited with him it is not necessary to join as defendants all of the policyholders protected by such funds, they numbering several thousand. Lancashire Ins. Co. v. Maxwell, 5 N. Y. Supp. 399.

55 Bank charter authorized joining in one action of all parties to bill or note. Davis v. Bank of Fulton, 31 Ga. 69.

56 Attorney general of state may be made defendant in suit to restrain enforcement of invalid laws. It is not a suit against the state. Ex parte Young, 209 U. S. 123, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932, 14 Ann. Cas. 764. Or a state tax officer may be defendant in a suit to enjoin execution of an invalid state tax on a federal corporation. Osborn v. United States Bank, 9 Wheat. (U. S.) 738, 6 L. Ed. 204.

57 There must be community of interest to warrant joining officers. Schell v. Alston Mfg. Co., 149 Fed. 439.

58 A church corporation as such may sue for a nuisance of noise which disturbed worship and depreciated its church building for that purpose. The members are not the necessary plaintiffs. First Bapt. Church v. Schenectady & T. R. Co., 5 Barb. (N. Y.) 79. See also Baltimore & P. R. Co. v. Fifth Bapt. Church, 108 U. S. 317, 27 L. Ed. 739.

59 Stockholders, or a trustee for them, are not proper co-plaintiffs with a corporation, willing and able to sue, in an action to enforce an agreement to hold a franchise to the use of

the corporation. Havana City Ry. Co. v. Ceballos, 49 N. Y. App. Div. 263, 63 N. Y. Supp. 417.

60 Members of a former partnership to whom the action accrued and who assigned it to the corporation are not proper co-plaintiffs. Lottman Bros. Mfg. Co. v. Houston Waterworks Co. (Tex. Civ. App.), 38 S. W. 357.

61 Lucia Min. Co. v. Evans, 146 N. Y. App. Div. 416, 131 N. Y. Supp. 280.

unite as plaintiff with it others through whom the title comes,62 but it may sue as a sole plaintiff on a subscription for a distinct object, such as a school, under its control. 63 A joinder of the corporation and the stockholder, one of whom is necessarily the proper plaintiff because he has succeeded to all of its rights, is harmless to the defendant even if erroneous.64

[ocr errors]

§ 3024. By corporation against officers or stockholders. The corporation sues its officers, agents or members as it sues any other distinct persons.65 It may sue to enjoin usurping officers without joining others who claim such offices 66 and on the other hand may in equity sue all of its members in an accounting for overpayments who have or claim an interest in the fund.67 Other chapters in this work treating of actions on subscriptions 68 and the liability of the stockholder to the corporation,69 the liability of officers and agents,70 and of promoters to the corporation,71 will afford precedents on parties in the respective actions.

§ 3025. Actions and suits against corporation-In general. When the corporation is to be sued the plaintiff is selected or named according to usual rules; thus in suits founded on an alleged right of plaintiff as a stockholder, he must be entitled to the stock in such

62 Where a corporation has been formed to become the trustee of a charitable trust, it may join as Coplaintiffs the successors of original donees in a suit to turn over the fund to the corporation. Proprietors of White School House v. Post, 31 Conn. 240.

63 Though a contract to pay money is for a school under control of a church, yet if the church corporation is the promisee it may sue as a sole party. Northwestern Conference of Universalists v. Myers, 36 Ind. 375.

64 Bellevue Mills Co. v. Baltimore Trust Co., 214 Fed. 817.

65 See 33 et seq., supra.

66 A suit to restrain usurpation of offices may be carried on in the corporate name though it also tries title to such offices claimed by another faction. De Zavala v. Daughters of Republic of Texas, 58 Tex. Civ. App. 19, 124 S. W. 160.

67 In a suit for an accounting of overpayments, a marketing corporation formed by growers may join as defendants all who have been overpaid, the agreement of all having been to sell all of the crop through it and accept the average price realized according to grade. Each "has or claims an interest." (Code Civ. Proc.

§ 379.) California Raisin Growers' Ass'n v. Abbott, 160 Cal. 601, 117 Pac. 767. Attaching creditors of the association and its debtor were also proper defendants. California Raisin Growers' Ass'n v. Abbott, 160 Cal. 601, 117 Pac. 767.

68 See Chap. 17, § 657 et seq., supra. 69 See chapter on Stock and Stockholders, infra.

70 See Chap. 42, supra.
71 See Chap. 5, § 142, supra.

[§ 3025 time, manner and circumstances that his right to recover can be predicated thereon,72 and a stockholder, creditor or other member of a class may and under some circumstances must sue on behalf of all of the class who are similarly situated and will come in as co-plaintiffs.78 In ordinary tort or contract actions, the ordinary law of torts applies to determine the parties. The corporation's promisee, or one in succession to him, or the person injured by its tort should sue.74 On a creditors' bill it is usual to sue on behalf of all who may come in as plaintiffs, and such is the better practice; 75 but it has been held not obligatory to do so, and one may sue for himself alone,76 being required, however, in such suits and other equitable actions to align on the defendants' side all others who have interests to be affected by the relief prayed.77 On a foreclosure of a corporate mortgage the suit is in a sense one against the corporation, and may be unqualifiedly so. The corportion is usually made a defendant, and must be one when it retains the title to the mortgaged property or an interest in it, or when any personal judgment against it is prayed.78 The state or the public cannot be a plaintiff against a corporation unless some public right, as distinguished from private ones, is to be vindicated or enforced.79 When the suit runs in the name of the state as plaintiff and is on a direct obligation to it no relator is necessary, but if one

72 A plaintiff founding his right on holding of stock must be the owner thereof, or a trustee for the owners. MacVeagh v. Denver City WaterWorks Co., 107 Fed. 17.

See generally chapter on Stock and Stockholders, subdivisions treating of actions and remedies by the stockholders, infra.

73 See generally other chapters in this work, e. g., chapter on Execution, etc., and Creditors' Bills, infra, and chapter on Stock and Stockholders, infra. When a stockholders' suit in equity is brought to obtain relief against a hostile majority or against controlling officers, the suit is generally so entitled and the opposing officers or stockholders are made defendants. See chapter on Stock and Stockholders, subd. Remedies of Stockholders, etc., infra.

An action to recover guaranteed

dividends on stock is properly brought by plaintiff, holder of stock on his own behalf and on that of all other holders similarly situated. Prouty v. Michigan Southern & N. I. R. Co., 4 Thomps. & C. (N. Y.) 230.

74 Consult the general laws of Torts, Contracts, and other specific subjects. 75 See chapter on Execution, etc., and Creditors' Bills, infra.

76 Barksdale v. Finney, 14 Gratt. (Va.) 338.

77 See § 3026, infra, and see also chapter on Execution, etc., and Cred. itors' Bills, infra.

78 See § 1372 et seq., supra.

79 The state cannot maintain a proceeding in equity to compel a railroad company to give facilities to a private shipper if it has no public interest to represent. State v. Chicago, M. & St. P. Ry. Co., 86 Iowa 641, 53 N. W. 323.

is necessary the attorney general is ordinarily a competent relator unless the statute plainly confers that capacity wholly on another.80

The distinctness of the corporation from its members and officers is just as important in naming the defendant as in naming the plaintiff. It and not they are to be named, and unless this is done and it is properly brought into court no binding judgment will result against it.81 Separate branches or suborganizations are not to be named as the defendants, but the corporation itself is to be, if it is the real defendant in interest.82 And only when they have distinct interests to defend are members, officers or related corporations proper codefendants.83 Moreover to make it a party it must be rightly named in the complaint 84 and be rightly served or voluntarily appear, and in chancery practice it is not a party unless process against it is prayed.86 It may be sued though the contract or cause of action accrued to a predecessor under a different name.87

§ 3026. Necessary or proper co-defendants. At common law every person jointly bound by contract must have been joined; every

80 A suit by the state to recover license fees and taxes from a foreign insurance company may be either without or with a relator; and under the statute empowering the auditor of state to institute suits for violation of the statute either by the attorney general or by such other attorney as he may designate, either the auditor or the attorney general Icould be relator. State v. Insurance Co. of North America, 115 Ind. 257, 17 N. E. 574.

The general rule is that there need be no relator when the suit immediately concerns the rights of the state or is on a direct obligation to it, and no private individual interest is sued on. Fry v. State, 27 Ind. 348 (on a bond); Attorney General v. Delaware & B. B. R. Co., 27 . J. Eq. 1, aff'd 27 N. J. Eq. 631 (public nuisance); People v. Metropolitan Bank, 7 How. Pr. (N. Y.) 144 (injunction against unlawful discounting).

81 See the sections following, and see §§ 3118, 3124, infra, as to judg ments.

A state owned bank may be sued.

Bank of Commonwealth v. Wister, 2
Pet. (U. S.) 318, 7 L. Ed. 437.

A railroad corporation owned solely by a sister state as stockholder may be sued. Hutchinson v. Western & A. R. Co., 53 Tenn. 634; Western & A. R. Co. v. Taylor, 53 Tenn. 408.

See also 2931, supra.

62 A branch which is not a separate corporation cannot be sued. The main corporation is the proper defendant under the statute authorizing suits against the bank in the county where the branch is. Tomkins v. Branch Bank, 11 Leigh (Va.) 372.

83 See $3026, infra.

But the nature of the defense, as that a related corporation was to accept services in payment for goods furnished to plaintiff, may afford reason for joining that corporation. Bloch Queensware Co. v. Metzger, 70 Ark. 232, 65 S. W. 929. 84 See § 3041, infra. 85 See §§ 2977-3019, supra.

86 In re Binney, 2 Bland (Md.) 99, holding corporation was not made party.

87 See § 3032, infra.

[§ 3026 one jointly and severally bound might have been joined or some might have been omitted; and in tort any or all might have been sued who were liable. In equity generally stated all persons interested in the subject of the suit ought to be joined in order that complete justice may be done and that parties may safely obey the decree. The codes of procedure adhere to these rules having regard to the nature of the action, whether legal or equitable in object.88 Applying these rules the members and officers or agents of the corporation are ordinarily improper co-defendants merely because of their relation to the corporation, and are never necessary ones unless they have a distinct individual and indivisible interest,89 or a distinct several liability, as participants in wrongdoing or breach of contract,90 or have been participants in the transaction concerning which an accounting is asked or other equitable

88 See generally the codes of procedure, also treatises on parties or practice in general. As to rules in chancery, see Mitford's & Tyler's Pl. & Pr. in Equity, p. 256 et seq.; Fletcher's Equity Pl. & Pr.; Daniell, Chan. Prac.

In suits in equity all persons should be made parties who have a material interest, either legal or beneficial, in the subject-matter of the suit. Where it appears that if the prayer of the bill be granted persons interested in the subject-matter not made parties will be affected injuriously, the bill will be dismissed. Minnesota V. Northern Securities Co., 184 U. S. 199, 46 L. Ed. 499.

89 Officers who have no individual interest should not be joined, and if joined, should be dismissed. Wood v. Bank of Kentucky, 5 T. B. Mon. (Ky.) 194.

The agents and officers are not proper parties where the corporation represents them. State v. Jacksonville, P. & M. R. Co., 15 Fla. 201.

It represents the stockholders. Pierce v. Somersworth, 10 N. H. 369.

Officers are improperly joined in an action against the corporation for breach of the right of plaintiff's privacy, if no individual act is charged against them. Vassar Col

lege v. Loose-Wiles Biscuit Co., 197 Fed. 982.

Where the acts of officers or employees of the corporation were in the corporate behalf, and the corporation is solvent, such officers or employees cannot be made parties with it in a suit for infringement. Panzl v. Battle Island Paper & Pulp Co., 132 Fed. 607.

Where through negligence of the employees of a street railway a party was injured and suit was brought for recovery, it was improper to join the president of defendant corporation as a defendant. Brooks v. Galveston City R. Co. (Tex. Civ. App.), 74 8. W. 330.

When it is desired to have an answer under oath the practice is to join some of the officers or corporators, supposed to have knowledge of matters averred in the bill and to require sworn answers from them. Fulton County Supervisors v. Mississippi & W. R. Co., 21 Ill. (11 Peck) 338.

90 Officers cannot be joined in a negligence action without allegations to show duties incumbent on them and a breach thereof. Henry v. Brackenridge Lumber Co., 48 La. Ann. 950, 20 So. 221.

May be joined with its officers in

« ՆախորդըՇարունակել »