Court Opinion

ID: 8823561
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:40:09.469483+00
Date Added: 2024-06-11T17:04:42.756784
License: Public Domain

On Petition for. Rehearing.
PER CURIAM.
The gravamen of the bill in, the above-stated case is: That Westinghouse, Church, Kerr & Co., Inc., formerly Electric Properties Company, held the title to, and ownership of, the capital stock of the Anthony Shoals Power Company, and through such stock ownership controlled the title to, and ownership of, all the lands and other property of said company, the title to which was vested in said Anthony Shoals Power Company. That by the contract of Au*929gust 12, 1909, the plaintiffs became entitled to an interest in the proceeds of said stock and properties of said Anthony Shoals Power Company, whenever sold, and that said Westinghouse, Church, Kerr & Co. became trustee to fairly sell said stock, or property, and to distribute the proceeds thereof in accordance with the agreement. That, instead of so doing, Westinghouse, Church, Kerr & Co. made a fraudulent sale of such stock at an entirely inadequate price, and passed the title to said stock through Imbrie & Co. to one John F. Wallace, an officer of said Westinghouse, Church, Kerr & Co., who took it with entire knowledge of the rights of plaintiffs.
The situs of said shares of stock is at the domicile of the Anthony Shoals Power Company. Jellenik v. Huron Copper Mining Co., 177 U. S. 1, 20 Sup. Ct. 559, 44 L. Ed. 647. The bill prays the setting aside of said sale and transfer of said shares of stock to said Wallace, and an injunction restraining the selling or disposing of, or in any manner hypothecating or incumbering, any of said stock, or any of the property the title to which is held by the Anthony Shoals Power Company; that a receiver be appointed to take charge of said stock and all of the property held by the Anthony Shoals Power Company, to carry out said agreement by a sale thereof and distribution of the proceeds. To this bill the Anthony Shoals Power Company, together with Westinghouse, Church, Kerr & Co., and the other parties to said alleged fraudulent sale and transfer, were made defendants.
It is insisted that the Anthony Shoals Power Company is but a formal party to the relief prayed in the bill, and that therefore the case is one removable, although the Anthony Shoals Power Company is a citizen of the same state as plaintiff's. The suit is not one simply for a moneyed recovery against the Westinghouse Company and the other defendants, but is a bill to set up a trust in, and secure its enforcement against, stock, and, on the idea that because of stock ownership the Westinghouse Company could control the action of the Anthony Shoals Power Company, in the property of said company, if sold without a sale of the stock. The bill seeks the setting aside of the sale upon the books of said company of said stock to Wallace and a sale and transfer of said stock in accordance with said agreement.
Even if the bill docs not set up the enforcement of an equitable lien against property which has situs wilhin the district where this suit is brought, which is not decided, it unquestionably seeks relief which, if proper, cannot be effectively carried out without either the action of the Anthony Shoals Power Company, or without depriving it of its property, and practically winding it up. That the company itself has no interest in the stock, except to see that it is not improperly transferred upon its books, does not render it merely a formal party. St. louis & San Francisco Ry. Co. v. Wilson, 114 U. S. 60, 5 Sup. Ct. 738, 29 L. Ed. 66.
The petition for a rehearing is denied.