Appellee Cuthill brought suit in the District Court against appellee OrtmanMiller Machine Company to recover unpaid overtime compensation, damages and attorneys’ fees, which he claimed due him under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. In its answer to the complaint, the company admitted that the plaintiff was a part-time employee but denied that it owed him any of the sums demanded. In answers to interrogatories propounded, it declared that plaintiff was not its employee but was hired by its tax attorney and accountant ; it denied owing him anything. At the trial, at which the corporation offered no evidence, judgment for plaintiff was entered in the sum of <$4,100 on December 21, 1953, and, on the same day satisfied by payment in full to the clerk of the court.
On the following day appellant filed a motion for leave to intervene, which the court denied on January 28, 1954. On January 30 he filed his amended petition for leave to intervene. He averred that he owned 20% of the corporate capital stock; that he had served as president from 1945 until March 1952; that, early in 1952, his corporate associates and their attorney fraudulently attempted to force him out of the business and to deprive him of his investment. Though the averments were in great detail, no good purpose would be served by repeating *338 them here. Suffice it to say, appellant, upon particularized averments, charged that the parties named had deliberately planned to defraud him, the company and the court; that the company’s officials and its counsel well knew that the corporation owed Cuthill nothing and wrongfully failed to resist his suit; that Cuthill knew that the company owed him nothing; that the company deliberately concealed its valid defense from the trial court; that, as a result of the charged collusion, a fraudulent judgment was entered and $4,100 of the corporate funds placed in the hands of the court to satisfy it and unless relief could be had, would be wrongfully diverted by satisfaction of the fraudulent judgment; and that counsel for the corporation had deliberately failed to act for and in the corporate interest. He prayed that upon his intervention, the court, upon hearing, set aside the judgment and permit proper defense to be made to Cuthill’s alleged fraudulent claim. April 15, 1954, the court denied the motion for leave to intervene. From this order appellant has appealed, asserting that the court erred in denying him relief. Both appellees, plaintiff and defendant below, insist that the order should be affirmed.
Rule 24(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A. provides that upon timely application one shall be permitted to intervene (a) when the “representation of the applicant’s interest by existing parties” is inadequate and the applicant is or may be bound by a judgment in the action, or (b) when the applicant “is so situated as to be adversely affected by” disposition of property in the custody or control of the court or an officer thereof. Comparing the mandatory provisions of the rule with the averments of appellant’s petition, it is obvious that he has brought himself within the rule by charging explicitly that as a stockholder he had a substantial interest in the $4,100 then in the custody of the court; that the corporation’s interests, including appellant’s, were not adequately represented in that the company and its counsel had permitted a fraudulent judgment to be entered; and that if corporate funds were improperly diverted in satisfaction of the allegedly fraudulent judgment, his interests would be adversely affected. In this situation the court could not properly do otherwise than permit him to present his case. Thus, in Pellegrino V. Nesbit, 9 Cir.,
The facts pleaded were sufficient to justify appellant’s fears; they brought him within the doctrine enunciated by the Supreme Court in United States v. Throckmorton,
It is suggested that the order denying intervention is not appealable. We do not agree. In Brotherhood of Railroad Trainmen v. Baltimore & Ohio Railroad Co.,
We know not what proof appellant may be able to produce, but we are of the opinion that he should be permitted to intervene and have his day in court. The order is reversed with directions to proceed accordingly.
