Backus v. Brooks

Citations

• 195 F. 452
• 115 C.C.A. 354
• 1912 U.S. App. LEXIS 1394

Syllabus

<p>1. Equity (§ 148*)—Bill—Multifariousness.</p> <p>A hill in equity which states a cause of action in behalf of individual complainants based on the fraudulent conduct of majority stockholders toward the minority, and which asserts the right of stockholders to follow corporate property conveyed in fraud, and which states a cause of action in favor of a corporation, as complainant, for breach of contract by defendant corporation and individual defendants for the purchase of articles, is multifarious for misjoinder of causes of action.</p> <p>[Ed. Note.—For other cases, see Equity, Cent. Dig. §§ 341-367; Dec. Dig. § 148.*]</p> <p>2. Corporations (§ 320*)—Fraudulent Acts op Majority Stockholders— Rights op Minority Stockholders.</p> <p>Where majority stockholders secretly plan to turn over, without consideration, ail the assets of the corporation to another corporation owned by them, in which the minority stockholders have no interest, and the plan is carried out, the minority stockholders may sue in equity for relief on the theory of a breach of trust, and that they have no adequate remedy at law, though a court of equity may, in view of the circumstances, make a money decree, instead of a decree distinctly equitable in form.</p> <p>[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 1426-1439; Dec. Dig. § 320.*]</p> <p>3. Corporations (§ 320*)—Fraudulent Acts op Majority Stockholders— Actions by Minority Stockholders—Laches.</p> <p>Minority stockholders suing in equity for relief based on the fraudulent act of the majority stockholders turning over, without consideration, all the assets of the corporation to another corporation owned by them, in which the minority stockholders have no interest, are not barred by laches where the delay in suing was due to their ignorance of the fraudulent acts; 'and the fact that innocent persons have become stockholders during the delay will not defeat equitable relief, since the court may protect them.</p> <p>[Ed. Note.—For