The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1892-08-17

L
matter as above, for the reason that |
the second case is properly ancillary
to the former.
In the former case, the Hawaiian |
Commercial and Sugar Company VS..
Waikapu Sugar Company, service
of process upon the Waikapu Sugar
Company, defendant, was made
upon its president, w. III. COrnwell.
No answer was made by the cor
pOration. Before the return day, !
however, G.. w. Macfarlane filed |
petition in equity asking for leave
to defend the said suit in the name
and on behalf of said Waikapu
Sugar Company. The Waikapu
Sugar Company is made defendant
in this case, and process was served
upon w. G. Irwin, agent of the cor
poration, who is also its treasurer.
Then appeared Claus Spreckels by
his attorney in fact w. Il. Irwin
and moved for leave to appear In
this case and plead for his own in
terest as stakeholder in the Wall
kapu Sugar Company.
Both the petition of G. w. Mac
farlane for leave to appear and
defend the suit and the motion of
Claus Spreckels for leave to plead
against the petition contain allega-
tions that satisfy me that the Wal
kapu Sugar Company as a corpora
ton will not act and cannot be
made to take corporate action in
defending either of these matters
by any action of the stockholders.
It's condition is anomalous. The
company has no directors; the stock
is owned, one half by Macfarlane
and one half by Claus Spreckels or
the Hawaiian Commercial and
Sugar Company who is the party
bringing the suit for partition.
At this junction of affairs what
can be done?
It is well settled that, individual
shareholders are not, ordinarily, the
proper parties to sue or defend on
behalf of corporate interests. off,
however, the corporate manage
ment fails or refuses to protect or
enforce corporate rights after proper
requests to do 50 share
holder, in a case where the corpora
ton itself would be entitled to
sue and obtain relief, may bring
suit on behalf Of himself and others
in like situation for the protection
or assertion of corporate rights and
interests Foster VS.. Mansfield
c.. & T.. M. r. Co. sc Fed. Rep. CPS,
decided in 1888.
The leading case establishing
this doctrine in the U. S. courts is
Dodge ". Woolsey Is Howard 331
Q855l. In Davenport V. Bows Is
Wall. 628 QS73) the &C., ss1s zee,
"that a stakeholder NJ court sas
suit when corporate may erins ;
settled in Dodge won REFUSES -,
such suit can only b. Woolsey, w
the ground that.ye nlaln.aineu -. y
corporation are il the rignts u III
rights the inds1nvelved." "lhes
allowed to algIvidual shareholder
self and hbs ssert in behalf OF him
directors rs associates because til
to taks~S Of the corporation deciin
Their, {e the proper steps to asset
~ "Manifestly the proceed
sFlngs for this purpose should be
conducted that any decree whic
shall be made upon the merits sha
conclude the corporation. "Th
can only be done by making the co
poratlon party defendant. Her
Bows, a shareholder in the Chicas
Rock Island and Pacific r. r.. c
brought a bill against the City
Davenport and the demurrer W
sustained because the railroad cor
pany was not made party to ii
bill.
The same court in 1881 (Haw
VS.. Oakland, 104 u. S. 450) aft
discussing with disapprobation Il
frequency with which stockholdel
bills were brought, through collu
ion, in the Federal Courts and en-
merating what must exist as &
foundation for such suit, sa
oPossibly other cases may arise
which, TO prevent irremediable
jury, or total failure of justice t
court would be justified in exerc
ing its powers" Later still,
1883, the same court in Dirnpf
VS.. Ohio & Miss. r. r. Co. Sc
"Grievances real and substant
must exist and before an individl
stakeholder can be heard he nut
show in the language of this cou
that che has exhausted all t
means within his reach 10 obta
within the corporation itself,
redress of his grievances or acti
in conformity to his wishes" {
ing Halves VS.. Oakland.
These strong authorities upon
right of stockholders, in the pro-
circumstances, to bring suits
their own names are equally CT
elusive as to the rights Of sto
holders to defend suits in their o
names in similar circumstances.
Bronson ct al VS.. Lacrosse 6
Milwaukee r. r. Co., Wall.
confirms this view. Here the
crosse g. NJ. r.. r. Co. did not
pear to the bill but permitted it
be taken as confessed. StockhC
ers in the corporation were, as
court say, ''irregularly allowed