117 P. 822 | Or. | 1911
Lead Opinion
delivered the opinion of the court.
The complaint in this case sets forth sufficiently that the directors, the trustee, and a majority of the stockholders are engaged in a conspiracy to unlawfully make away with the assets of the corporation, and such being
The United States courts have held that complaints in cases of this character should show that the plaintiff was a stockholder at the time the alleged wrongs were committed, but this seems to be a holding peculiar to these courts, and having for its object the prevention of collusive assignments of stock between citizens of different states made with the intent to avoid the jurisdiction of the State courts. The operation of such a rule in the United States courts is just and salutary because it still leaves the injured party to his remedy in the local courts of his own state, but to apply it generally in the state courts would work injustice and hardship, and the better opinion is against it. Cook, Corporations (6 ed.) §736; Montgomery Light Co. v. Lahey, 121 Ala. 131 (25 South. 1006); Earle v. Seattle, Co. (C. C.) 56 Fed. 909; Forrester v. B. & M. Mining Co., 21 Mont. 544 (55 Pac. 229, 353).
The decree of the circuit court will therefore be reversed as to all parties except defendant Sheffield, and as to him it will be affirmed; and this cause will be remanded to the circuit court for further proceedings not inconsistent with this opinion.
Reversed and Remanded as to all respondents, except F. W. Sheffield. Affirmed as to him.
Rehearing
Decided September 19, 1911.
On Rehearing.
delivered the opinion of the court.
“That the said officers and directors of the said defendant, the Union Savings & Loan Association, have persuaded a large number of the stockholders thereof to relinquish their stock in said association, and, in lieu thereof, accept stock in said Co-operative Investment Company, and, when said stock in said Union Savings & Loan Association was so surrendered, it was reissued in the name of the defendant, E. A. Baldwin, for the purpose of owning a controlling interest in said Union Savings & Loan Association, and the said E. A. Baldwin did procure in his name sufficient of said stock to control a majority of the votes of the said stock of said Union Savings & Loan Association.”
There is nothing to indicate that the officers named used any undue or fraudulent means to induce stockholders to exchange stock in the Savings & Loan Association for stock in the Co-operative Company, or that the reissue to Baldwin was made in any irregular or fraudulent manner or without consideration. He had a right to procure as many shares as he could pay for and to own a controlling interest if he could get it. So far, no substantial cause of suit is shown, and, if the complaint concluded here, the court might well have dismissed the proceeding.
While the complaint is badly drawn and fails to state fully and definitely many things which ought, to be so stated, we are of the opinion that, in the absence of a demurrer or other motion to make more definite, it is sufficient to sustain a decree. Perhaps the plaintiffs would have chosen the wiser course had they acquiesced in the ruling of the circuit court and began a new suit, with a complaint more completely and artistically drawn. But, badly drawn as it is, it states a cause of suit in respect to the matters herein indicated, and we therefore adhere to our former opinion.
Former Opinion Adhered To.