Source: https://www.legalcrystal.com/case/96974/deckert-vs-independence-shares-corp
Timestamp: 2017-12-18 11:04:35
Document Index: 461655984

Matched Legal Cases: ['§ 129', '§ 22', '§ 22', '§ 643', '§ 1525', '§ 881', '§ 225', '§ 2608', '§ 2618']

Deckert Vs Independence Shares Corp - Citation 96974 - Court Judgment | LegalCrystal
Deckert Vs. Independence Shares Corp. - Court Judgment
LegalCrystal Citation legalcrystal.com/96974
Case Number 311 U.S. 282
Appellant Deckert
Respondent independence Shares Corp.
.....administered the trust. petitioners brought this suit in the district court for the eastern district of pennsylvania against pennsylvania, independence, two affiliated companies, and certain officers and directors of independence whose residence does not appear. the action against the affiliated companies has been dismissed. the bill alleges that independence and its predecessor capital were guilty of fraudulent misrepresentations and concealments in their sale and advertisement of contract certificates to petitioners and others similarly situated in violation of the securities act of 1933. it alleges that independence is insolvent and threatened with many lawsuits, that its business is virtually at a standstill because of unfavorable publicity, that preferences to creditors.....
Deckert v. Independence Shares Corp. - 311 U.S. 282 (1940)
U.S. Supreme Court Deckert v. Independence Shares Corp., 311 U.S. 282 (1940)
(1) An appeal to the Circuit Court of Appeals from an interlocutory order granting an injunction was authorized by § 129 of the Judicial Code and was not premature. P. 311 U. S. 286 .
to dismiss the bill, although normally such denial would be appealable only after a final decree. P. 311 U. S. 287 .
(3) Motions to dismiss the bill because it failed to state a cause of action, and because the District Court lacked jurisdiction, were properly denied. P. 311 U. S. 287 .
(4) The District Court had jurisdiction of the suit under § 22(a) of the Securities Act, irrespective of the amount in controversy or the citizenship of the parties. P. 311 U. S. 289 .
(5) The grant of a temporary injunction by the District Court -- restraining the transfer of funds held by the trustee for the account of the vendor, upon security being given to protect the defendants -- was proper to preserve the status quo pending final determination of the questions raised by the bill. P. 311 U. S. 290 .
(6) The allegations of the bill sufficiently showed that the legal remedy against the vendor, without recourse to the fund in possession of the trustee, would be inadequate. P. 311 U. S. 290 .
(7) Orders of the District Court allowing the bringing in of two additional plaintiffs, and referring the issue of insolvency to a master, were interlocutory, and not reviewable except upon appeal from a final decree. P. 311 U. S. 290 .
2. The relief of purchasers who have been sold securities by means which render the seller liable under the Securities Act of 1933 is not restricted to a money judgment. P. 311 U. S. 287 .
3. The jurisdiction conferred on the District Court by § 22(a) of the Securities Act of suits "to enforce any liability or duty" created by the Act implies the power to make effective the right of recovery afforded by the Act, and the power to make the right of recovery effective implies the power to utilize any of the procedures or actions normally available to a litigant in the exigencies of the particular case. P. 311 U. S. 288 .
4. A suit to rescind a contract induced by fraud, and to recover the consideration paid, is cognizable in equity, at least where the legal remedy is inadequate. P. 311 U. S. 289 .
Petitioners, with one exception residents of Pennsylvania, are owners and holders of Capital Savings Plan Contract Certificates purchased from Capital Savings Plan, Inc., since merged with and now Independence Shares Corporation, a Pennsylvania corporation. These certificates required the holders to make certain installment payments to The Pennsylvania Company for Insurances on Lives and Granting Annuities, also a Pennsylvania corporation. [ Footnote 1 ] Pennsylvania, after deducting
Thus, by the plain words of Section 129, the Circuit Court of Appeals was authorized to consider the appeals from the temporary injunction. Compare Enelow v. New York Life Insurance Co., 293 U. S. 379 ; Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 293 U. S. 449 .
However, this power is not limited to mere consideration of, and action upon, the order appealed from. "If insuperable objection to maintaining the bill clearly appears, it may be dismissed and the litigation terminated." Meccano, Ltd. v. Wanamaker, 253 U. S. 136 , 253 U. S. 141 . See also Eagle Glass & Mfg. Co. v. Rowe, 245 U. S. 275 ; Metropolitan Water Co. v. Kaw Valley Drainage District, 223 U. S. 519 ; Mast, Foos & Co. v. Stover Mfg. Co., 177 U. S. 485 ; Smith v. Vulcan Iron Works, 165 U. S. 518 . Accordingly, the Circuit Court of Appeals properly examined the interlocutory order denying the motions to dismiss, although generally it could consider such an order only on appeal from a final decision. Reed v. Lehman, 91 F.2d 919; Miller v. Pyrites Co., Inc., 71 F.2d 804. Compare Gillespie v. Schram, 108 F.2d 39; Rodriguez v. Arosemena, 91 F.2d 219; Kneberg v. H.L. Green Co., Inc., 89 F.2d 100; Satterlee v. Harris, 60 F.2d 490.
Moreover, in Section 22(a), specified courts are given jurisdiction "of all suits in equity and actions at law brought to enforce any liability or duty created by this subchapter." [ Footnote 2 ] The power to enforce implies the power to make effective the right of recovery afforded by the Act. And the power to make the right of recovery effective implies the power to utilize any of the procedures or actions normally available to the litigant according to the exigencies of the particular case. If petitioners' bill states a cause of action when tested by the customary rules governing suits of such character, the Securities Act authorizes maintenance of the suit, providing the bill contains the allegations the Act requires. That it does not authorize the bill in so many words is no more significant than the fact that it does not in terms authorize execution to issue on a judgment recovered under Section 12(2).
The principal objects of the suit are rescission of the Savings Plan contracts and restitution of the consideration paid, including recovery of the balance, held by Pennsylvania for account of Independence, which consisted in part of the payments alleged to have been procured by the fraud of Independence. That a suit to rescind a contract induced by fraud and to recover the consideration paid may be maintained in equity, at least where there are circumstances making the legal remedy inadequate, is well established. Tyler v. Savage, 143 U. S. 79 ; Montgomery v. Bucyrus Machine Works, 92 U. S. 257 ; Boyce v. Grundy, 3 Pet. 210. See Black, Rescission and Cancellation, 2d Ed., § 643 et seq.; Williston, Contracts, 3d Ed., § 1525 et seq.; Pomeroy, Equity Jurisprudence, 4th Ed., §§ 881, 1092. [ Footnote 3 ]
Prendergast v. New York Telephone Co., 262 U. S. 43 , 262 U. S. 50 -51; Meccano, Ltd. v. Wanamaker, 253 U. S. 136 , 253 U. S. 141 . As already stated, there were allegations that Independence was insolvent and its assets in danger of dissipation or depletion. This being so, the legal remedy against Independence, without recourse to the fund in the hands of Pennsylvania, would be inadequate. The injunction was framed narrowly to restrain only the transfer of $38,258.85, and the trial judge required petitioners to furnish security for any losses respondents might suffer. In view of this we cannot say that the trial judge abused his discretion in granting the temporary injunction.
not appealable (28 U.S.C. § 225), [ Footnote 4 ] and should have been reversed only if petitioners were not entitled to any equitable relief. See Meccano, Ltd. v. Wanamaker, 253 U. S. 136 ; Smith v. Vulcan Iron Works, 165 U. S. 518 . The Circuit Court of Appeals properly did not consider them on the merits, and if ultimately there is an appeal from a final decree the correctness of these orders may be examined.
An order allowing the addition of plaintiffs is interlocutory and not appealable: Central California Canneries Co. v. Dunkley Co., 282 F. 406, 410. See Oneida Navigation Corp. v. W. & S. Job & Co., Inc., 252 U. S. 521 ; Cyclopedia of Federal Procedure, Vol. 5, § 2608.
An order of reference to a master is generally interlocutory and not appealable, at least if not for a mere ministerial purpose: George v. Victor Talking Machine Co., 293 U. S. 377 . See Latta v. Kilbourn, 150 U. S. 524 ; McGourkey v. Toledo & Ohio & Central Ry. Co., 146 U. S. 536 ; Hill v. Chicago & Evanston R. Co., 140 U. S. 52 ; Beebe v. Russell, 19 How, 283; Craighead v. Wilson, 18 How. 199; Forgay v. Conrad, 6 How. 201; Cyclopedia of Federal Procedure, Vol. 5, § 2618.