Kilgour v. New Orleans Gas Light Co.

| U.S. Circuit Court for the District of Louisiana | Nov 15, 1875

WOODS, Circuit Judge.

The objections made to the bill in the argument were: 1. Want of equity. 2. Multifariousness. 3. Want of proper and necessary parties.

1. In my judgment, the bill has equity. Its averments bring it under the well known head of equity jurisprudence — fraud. The practices charged against Attrill and his associates make a strong case for the interposition of a court of equity. It is clear that there is no adequate remedy at law. A money judgment against Attrill for his fraudulent conversion of the stock of complainant would not give complainant the relief he wants. The purpose of the bill is the recovery of complainant’s stock, of which he has been fraudulently dispossessed by Attrill, who claims title to it. Clearly, this result can only be reached by the decree of a court of equity. There may be defects in the frame of the bill which require amendment, but the case as stated seems to me to be clearly one of equitable cognizance.

2. The bill is not multifarious. “By multifariousness is meant the improperly joining in one bill distinct and independent matters, and thereby confounding them; as for example, by uniting in one bill several matters perfectly distinct and unconnected against one defendant, or the demand of several matters of a distinct and independent nature against several defendants in the same bill.” 1 Coop. Eq. Pl. 182; Saxton v. Davis, 18 Ves. 72. The single purpose of the complainant is to follow and recover the stock which he once held in the Crescent City Gas Light Company. If, in order to do this, it should be necessary to declare the consolidation between the Crescent City Gas Light Company and the New Orleans Gas Light Company void, it cannot be said that this would be joining distinct and independent matters. The onl3' apparent ground for the charge that the bill is mul tifarious is found in its alternative prayer. This is not an objection to the bill. It often becomes necessary for the equity draftsman to frame the prayer of his bill in the alternative. 1 Story. Eq. Pl. § 42; Mitf. Eq. Pl. 67; Colton v. Ross, 2 Paige. 396; Lloyd v. Brewster, 4 Paige Ch., 537" court="None" date_filed="1834-08-19" href="https://app.midpage.ai/document/lloyd-v-brewster-5548104?utm_source=webapp" opinion_id="5548104">4 Paige, 537; Adams, Eq. 508.

3.There appears to be no want of necessary parties. The only defect of parties alleged is in the fact, that Attrill, who is a citizen of New York, is not served with process. Nevertheless, he is made a party by the averments of the bill, and there is prayer for process against him. It is true he is not yet served, but that is no defect of the bill. Non constat but he may enter his appearance, or may be found in the district and served with process. That he is a necessary party is perfectly clear. The controversy raised by the bill is a controversy between him and the complainant over the ownership of the fifteen hundred shares of stock in the Crescent City Gas Light Company, or a proportionate number of shares in the New Orleans Gas Light Company. The latter company is a mere stakeholder, entirely indifferent where the stock goes. It follows that the case can make no progress until Attrill is brought in by service of some kind, or by his entering his voluntary appearance; but as he may be brought in by sendee or may enter a voluntary appearance, it would be premature to sustain a demurrer to the bill, because he is not already sened. I am of opinion, therefore, that none of the grounds of demurrer are well taken, and that the demurrer must be overruled.

The complainant claims that Attrill may be brought in under section 73S of the Revised Statutes. This section declares: “When any defendant in a suit in equitj’ to enforce any legal or equitable lien or claim against real or personal pro-perty within the district where the suit is brought is not an inhabitant of, nor found within the said district, and does not voluntarily appear thereto, it shall be lawful for the court to make an order directing such absent defendant to appear, plead, answer or demur to the complainant’s bill at a certain day therein to be designated, and the said order shall be served on such absent defendant, if practicable, wherever found, or when such personal service is not practicable, shall be published in such manner as the court may direct. If such absent defendant does not appear, etc., it shall be lawful for the court, upon proof of the service or publica.tion of said order, etc., to entertain jurisdiction and proceed to the hearing and adjudication of such suit in the same manner as if such absent defendant had been served with process within the said district. But the adjudication shall, as regards such absent defendant without appearance, affect his property within such district only.’’

It may be premature before motion is made for an order for constructive service as provided for in this section, to pass upon the question whether the present is a case to which this section applies, but as counsel have argued the question, I shall proceed to dispose of it. Constructive service can only be made in “a suit in equity to enforce any legal or equitable lien or claim against real or personal property within the district.” The ease presented by the hill, if it falls within the section at all. is the case of a claim against personal property. If the property against which claim is set up is the 1000 shares in the Crescent City Gas Light Company. that stock is in the possession of Attrill who holds the legal title thereto according to the averments of the bill, and Attrill is in New York. Can these shares he said to be property within this district? From the fact that the property’ of the gas company is in this district, it does not follow that the shares of stock are in this district. The property of the company is mainly real estate; the shares of stock are personal property. “The possession of capital stock does not give a person a particle of legal interest in the .corporation property. Though he possesses one-half the entire stock, he is not therefore the owner of one-half the corporate property. The corporation still owns it all. There is no divided ownership in the case. Possession of the stock merely entitles the holder to a right to vote, a right of dividend, a right to the faithful appropriation of the funds. These rights are very different from the right of property.” Per Bradley, J., in Morgan v. Railroad Co. [Case No. 9.806], When, therefore, At-trill became the holder of the shares claimed by complainant in the Crescent City Gas Light Company, and went to New York, he earned the property in the shares with him, for shares of stock in an incorporated company such as a canal, waterworks or gas company are, unless otherwise provided by the charter, personal property. Edwards v. Hall, 6 De Gex, M. & G. 74; Id., 35 Eng. Law & Eq. 433; Tippetts v. Walker, 4 Mass. 595" court="Mass." date_filed="1808-11-15" href="https://app.midpage.ai/document/tippets-v-walker-6403309?utm_source=webapp" opinion_id="6403309">4 Mass. 595; Bradley v. Holdsworth, 3 Mees. & W. 422; King v. Capper, 5 Price, 217; Johns v. Johns, 1 Ohio St. 351. And personal property follows the person. Morgan v. Parham, 16 Wall. [83 U. S.] 471. These shares considered as part of the stock of the Crescent City Gas Light Company cannot therefore be said to be property within this district. If these 1500 shares in the Crescent City Gas Light Company are to be considered as merged in the stock of the New Orleans Gas Light Company, the shares in the latter company are still the property of Attrill who holds the title to them, and follow his person to New York where he is. In the event that the consolidation of the two companies is confirmed, there is another obstacle to an order for constructive service. The claim of the complainant is not for any particular shares of stock that can be designated by number or identified as possessed by a particular person, but it is for Got) shares out of 12,500 shares. Clearly a claim to a given number of shares of stock, not yet designated or ascertained. cannot be said to be property within the meaning of section 73S. Rev. St The case provided for by the statute is a legal or equitable lien or claim on real or personal property. The right asserted by the complainant to undesignated shares of stock is a chose in action, but is neither real nor personal property, within the meaning of the statute. I am therefore of opinion that At-trill cannot be made a defendant to this suit by constructive service.