Pearce v. Sutherland
164 F. 609
9th Cir.
1908
Check Treatment
GILBERT, Circuit Judge

(after stating the facts as above).

The facts alleged in the bill present a case for equitable relief as against the appellee Sutherland. The formation of the corporation was not necessarily a dissolution of the copartnership. In fact, it is alleged in the bill that the corporation was formed for the purpose of carrying out the copartnership agreement. The case is similar to that of Monmouth Inv. Co. v. Means, 151 F. 159, 80 C.C.A. 527, in which the court recognized the existence of a copartnership to deal in real estate, aided by a corporation organized merely to be a holding company for the partnership adventures. Nor does it appear from the allegations of the bill that the laches of the appellant are such as to bar his right to equitable relief, or that he is estopped to maintain such a suit. The suit was begun on April 29, 1907. It was not until June, 1905, that the hostile attitude of Sutherland was definitely declared by him. The matter which, by the order of the court, was struck from the bill, contained allegations, which, while they presented no ground of equitable relief, were not wholly foreign to the controversy, for they were in the nature of an excuse for and an explanation of a portion of the delay of the appellant in bringing his suit, and we think they should not have been struck from the bill. But we are of the opinion that the demurrers to the bill were properly sustained for want of jurisdiction of the court to entertain that portion thereof which seeks to take from the Alaska Perseverance Mining Company, a corporation of the state of New York, the possession of its property, books, and records, and place them in the hands of a receiver and impound its stock in the possession of persons holding the same by hypothecation, marshal its assets, and distribute the same by a decree of the court.

It is well settled that, in the absence of a statute enlarging its powers, a court of equity has no jurisdiction *224at the suit of a shareholder or other private person to dissolve a corporation. Thompson on Corp. pars. 4538, 6598, 6854; Hardon v. Newton, 14 Blatchf. 376, Fed.Cas.No.6.054; Society for Establishing Manufactures v. Morris Canal Co., 1 N.J.Eq. 186, 21 Am.Dec. 41. Nor has a stockholder in a corporation any standing to apply for a receiver to. control a corporation or wrest from it its corporate property on the ground that the business of the corporation is managed unwisely or unjustly, and especially is this true of an application for' the appointment of a receiver by a resident shareholder, to wind up the affairs of a foreign corporation, notwithstanding that it is doing business within the jurisdiction of the court. Mining Co. v. Field, 64 Md. 151, 20 A. 1039; Republican Mountain Silver Mines v. Brown, 58 F. 644, 7 C.C.A. 412, 24 L.R.A. 776; Leary v. Columbia River & P. S. Nav. Co. (C.C.) 82 F. 775; Sidway v. Missouri Land & Live Stock Co. (C.C.) 101 F. 481. It is true that the bill in this case does not in terms pray for the dissolution of the corporation, but there can be no question that such is incidentally the effect of placing a corporation in the hands of a receiver. Sidway v. Missouri Land & Live Stock Co. (C.C.) 101 F. 481. Monmouth Inv. Co. v. Means, 151 F. 159, 80 C.C.A. 527. In the present case the appellee Sutherland is brought before' the court as a defendant, not only in his capacity as copartner with the appellant, but as a director of and the holder in trust of the capital stock of the Alaska Perseverance Mining Company. To such a suit the corporation is a proper party defendant, and the bill is not subject to demurrer for misjoinder of defendants. Allen v. Curtis, 26 Conn. 456; Sears v. Hotchkiss, 25 Conn. 171, 65 Am.Dec. 557; Hersey v. Veazie, 24 Me. 9, 41 Am.Dec. 364; Brewer v. Boston Theater, 104 Mass. 378; Dodge v. Woolsey, 18 How. 331, 15 L.Ed. 401; March v. Eastern R. Co., 40 N.H. 548, 77 Am.Dec. 732.

Inasmuch as the demurrers were sustained on all the grounds therein set forth, it is proper, while affirming the ruling of the court below on the demurrer to the bill as it stands, to direct that the cause be remanded to that court, with permission to the appellant to amend, if he so elects. It is so ordered.