104 F. 757 | U.S. Circuit Court for the District of Massachusetts | 1900
The underlying subject-matter of this suit is the same as that determined by the circuit court of appeals for this circuit in Hale v. Hardon, 37 C. C. A. 240, 95 Fed. 747, in which the opinion was passed dowm on May 31, 1899, reversing the judgment of the circuit court for this district, whose opinion was passed down on September 13, 1898, and is reported in 89 Fed. 283. The present case comes before the court on demurrer, containing, under the Massachusetts practice, 40 different assignments of alleged defects in the plaintiff’s pleadihgs.
On examining the various assignments, we find that the majority of them must be assumed to have been stated for the purpose of inducing a reconsideration by the appellate tribunals, because, with reference thereto, we find ourselves concluded by the adjudication of the circuit court of appeals in the case already referred to. This is directly the fact with reference to assignments 1, 3, 4, 5, 7, 8, 9, 10, 11, and 16, and also, probably, with reference to some other assignments which have not been particularly brought to our attention in the argument at bar. It is also indirectly the fact with reference to assignments, 2, 17, 18, 19, 20, 21, 23, 24, 25, 26, 31, and 38, as all these relate to matters which are covered by the judicial proceedings in Minnesota, which were held, in the opinion of the circuit court of appeals referred to, to be conclusive, in the absence of fraud, as against both resident and nonresident stockholders. Assignments like Ho. 15 are ineffectual, in view of the fact that, with reference to judgments in superior courts of judicature, like that in Minnesota on which the present cause is based, it is not necessary to show that service was made on residents; but such judgments are presumed to be valid. Assignments like Ho. 39, which relate purely to matters of form, and do not put their fingers directly on the defects objected to, are clearly insufficient under all systems of pleading, whether at common law or under the statutes of Massachusetts: With reference to assignment 13, the plaintiff has set out fully the judicial proceedings in Minnesota; and, the circuit court of appeals having determined in Hale v. Hardon that those proceedings are the basis of this class of suits, and it not being necessary to burden pleadings with allegations of matters of law, the plaintiff, in that particular, has clearly made it appear on what he rests his right of action.
In view of what we have said about No. 13, it is apparent that the matters referred to in Nos. 27, 28, and 29 do not create any duplicity or repugnancy according to the test which the law applies, because they all concern mere matters of surplusage of such a character that they are not grounds of demurrer. If the defendant will, by a proper motion, point out any matters of surplusage which may embarrass her defense, and will support the same by a careful brief, sufficient to enable
As we have said, the most important points relied on by the defendant are necessarily overruled on the strength of the decision of the circuit court of appeals in Hale v. Hardon. We have, however, found it proper to consider whether the opinion of the supreme judicial court of Massachusetts in Hayward v. Leeson, passed down on June 15, 1900, and reported in 57 N. E. 656, has so far changed the status as to require us to hold that the decision of the circuit court of appeals is no longer applicable. We are clear, however, that there is nothing in 1 lav ward v. Leeson which will justify us in sustaining the demurrer. That suit, as it appears, was brought in Massachusetts by Hayward, who had been appointed a receiver, by some court in Tennessee, of the East Tennessee Land Company, an insolvent corporation. He was authorized by his appointment to collect, take possession of, preserve, and care for the assets of the corporation, and to dispose of the same under the order of the court. He was also directed to prosecute suits in tlie courts of Massachusetts of the class to which Hayward v. Lee-son belongs, for the purpose of recovering from the promoters of the corporation assets which it was claimed they had unlawfully withdrawn. He was directed to proceed in those suits either in his own name as receiver, or in the name of the East Tennessee Land Company, or jointly in his name as receiver and in the name of tlie East Tennessee Land Company, as he might be advised by counsel, and in accordance with tlie rules of practice in the Massachusetts courts. The supreme judicial court of Massachusetts held that none of the proceedings in Tennessee operated as an assignment to the receiver of tlie dioses in action in litigation in Massachusetts, and it quoted the language of Mr. Justice Gray in Union Bank of Chicago v. Kansas City Bank, 136 U. S. 223, 236, 10 Sup. Ct. 1013, 34 L. Ed. 341, that: the utmost effect’ of the appointment of a receiver is to put the property into his custody as an officer of the court, but not to change the title, or even the right of jiossession. Therefore Hayward v. Leeson decided that the receiver could not sue in Ms own name in Massachusetts.
The receiver in Hale v. Hardon, and in the present suit, would [seem to have even less color for a standing in a court of common law [to maintain a suit at common law, than the receiver In Hayward v. Leeson. Of course, if there were a statute of Minnesota creating a, [right of action against corporate shareholders, and vesting it, when [created, in an official of the state, or an officer to be appointed by the [court, or in any other person who would make avail of it for a remedial [purpose, so that such right of action originated with, and first; vested In, the person so named, there can now be no question that, under. Article 4, § 1, of the constitution, requiring full faith and credit to he given in each state to the public acts of every other state, the courts
The question is whether, in a common-law court, the rules of the common law as to parties can be disregarded. The fact was accepted by the circuit court in Hale v. Hardon, especially in its references to Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct. 739, 33 L. Ed. 184, that the rules of the common law concerning this topic prevail in Massachusetts. The circuit court also accepted the fact that, under sections 721 and 914 of the Revised Statutes, the practice, pleadings, and modes of procedure in the circuit court for the district of Massachusetts must be made to conform to those of the state of Massachusetts “as near as may be.” This applies with full force to the question of parties. Pritchard v. Norton, 106 U. S. 124, 130, 1 Sup. Ct. 102, 27 L. Ed. 304; Albany & Rensselaer Co. v. Lundberg, 121 U. S. 451, 454, 7 Sup. Ct. 958, 30 L. Ed. 982. It must be assumed that the circuit court of appeals, in its adjudication in Hale v. Hardon, had all these matters in mind, as well as the circuit court. Therefore, inasmuch as Hayward v. Leeson declared no rule which was not known to be in force in Massachusetts, we have no right to assume that, if that suit had been decided before the action of the circuit court of appeals, the result would have been other than it was; and, consequently, we would not be justified in so applying Hayward v. Leeson as to turn aside the effect of the result on appeal in Hale v. Hardon.
The demurrer is overruled. The plaintiff’s declaration is adjudged sufficient. The defendant may answer to the merits on or before the 1st day of September, 1900.