Carpenter v. Knollwood Cemetery

COLT, Circuit Judge. This case is now before the court on demurrer to the bill. The grounds of demurrer are set forth in defendants’ brief as follows: (1) The complainants are not entitled to the relief sought. (2) The subject-matter in dispute is less than $2,000. (3) The complainants on their bill do not appear as shareowners of record, and are therefore not entitled to maintain this suit. - .(4) The complainants have a complete and adequate remedy at law. - "(5) The sixth prayer.of the complainants’ bill is vague, uncertain, and inconsistent with any of the other prayers of said bill. (6) The bill sets forth inconsistent states of facts. . (7) The several prayers of the complainants’ bill are inconsistent, in no sense alternative, and the relief sought irreconcilable. (8,9,10) Divers persons not at present parties to the bill are necessary and indispensable parties. 1. The bill prays for the appointment of a receiver, for an injunction, and for an account. Assuming the allegations of the bill, which are well pleaded, to be true, I am not prepared to hold that the bill does not set forth a cause for equitable relief; and it follows that this ground of demurrer is not well taken. In disposing of this ground of demurrer, I do not deem it necessary to consider in detail the allegations of the bill, as the bill has already been before the court, as well as before a master, in connection with the motion for a preliminary injunction. [1] 2.‘The second ground of demurrer, that the subject-matter in dispute is less than $2,000, is overruled for the following reasons : ’ The bill alleges that this suit is brought by the complainants in behalf of themselves and all other owners of landholders’ shares who are similarly situated, seeking, among other things, to protect the interests of the lands of the defendant corporation as against a proposed sale of such lands. “Where a suit is brought by one or more, for themselves, and all others of a class jointly- interested, for the relief of the whole'class, the aggregate interest ofl the whole class constitutes the matter in dispute.” 1 Foster’s Fed* era! Practice (4th Ed.) § 16k, p, 107, and cases cited. ... [299] Since this case is governed by this general rule, it is clear that the matter in dispute is far in excess of the statutory requirement. [2] 3. With respect to the third ground of demurrer, that the complainants in their bill do not appear as shareholders of record, it is sufficient to refer to the ninth paragraph of the bill, which reads as follows : “Xinth. That said John J. Cameron contract provided in sections 3 and 4 thereof that the one-hnif of the proceeds to be realized from the sale of the use of lots and plats in the cemetery should be divided into fifteen thousand (35,000) equal shares, which shares should be distributed to and among said Cameron and his associates named in said contract, according to their several interests, and that one or more certificates should be issued to each of said persons for his share, and the said shares should be personal property and transferable by the said persons or their legal representatives or assigns on the books of the said cemetery corporation upon the surrender of the certificates, the same as stock is usually transferable; that said Ivnollwood Cemetery. pursuant to said authority, issued the fifteen thousand (1.5,000) landowners’ shares mentioned therein to the following named persons, to wit: John J. Cameron, Samuel I. Knight, Reese Carpenter, Leonard W.' Ross, Daniel H. Waison, and Thomas D. Husted, all of which were fully paid for and are now outstanding. That said complainant Reese Carpenter now owns 50 of said landowners’ shares. That said complainant Caroline L. Carpenter now owns 50 of said landowners’ shares. That said complainants Ohauncey M. Depew and Chauncey M. Depew, Jr., together now own 206 of said landowners’ shares. That said complainant Samuel I. Knight now owns 312 of said landowners’ shares. That said complainant Gardiner Wetherbee now owns 100 of said landowners’ shares. That said complainant Charles W. Carpenter now owns 226 of said landowners’ shares. That said complainant James B. Murray now owns 800 of said landowners’ shares. That the original owners of said landowners’ shares or their assigns are in equity the actual owners of said land, and are the principals for whom the trust created under the terms of the Cameron contract was established, having paid a good and valuable consideration for same.” In my opinion, reading this paragraph as a whole, the allegations of ownership are sufficient. The cases cited by the defendants presented special circumstances, and do not apply to the case at bar. 4. Assuming the truth of the allegations of this bill, it is manifest that this case is within the equity jurisdiction of the court, and that the complainants have no sufficient or adequate remedy at law. [3] 5,6,7. These grounds of demurrer are to the effect that the sixth prayer of the complainants’ bill is vague, uncertain, and inconsistent with any of the other prayers of said hill. The sixth prayer of the bill is as follows: “That a decree be entered by this honorable court winding up said cemetery corporation and revesting the title of the remaining land of said cemetery corporation, free and clear from all incumbrances, in said John J. Cameron and ids associates mentioned in said contract, their respective executors, administrators, and assigns, and decreeing said pretended mortgage to be null and void.” With respect to the fifth, sixth, and seventh grounds of demurrer the complainants in their brief say: “As to the fifth, sixth, and seventh causes of demurrer, as has already been stated, the complainants, on more mature deliberation, do not 'insist on the position taken in the bill that the corporation has forfeited its rigid to retain the title to and possession of the premises, and hereby offer to strike [300] out the portions of the twenty-eighth paragraph setting up such a claim and also such portions of the sixth prayer for relief as seek a revesting of the title to thé remaining land of the cemetery in Cameron and his associates. “The portion of the twenty-eighth paragraph of the bill asserting that, for reasons therein stated, the defendant Knoll wood Cemetery has forfeited its right to longer retain the title to and possession of any of said lands conveyed to it by said John J. Cameron, and that title to the same should now be declared vested, by decree of the court, free and clear from all liens and incumbrances, in said John J. Cameron and his associates mentioned in said contract, is a conclusion of law, which the complainants are willing to admit is unsound in view of the fact that the land conveyed has, with the knowledge and assent of their predecessors in title, been dedicated and used for cemetery purposes so as to involve the rights of lot owners and the public. * * * Said portions of said bill may therefore be treated, for the purposes of this hearing, as mere surplusage.” With this matter stricken from the bill, as requested by the complainants, it seems to me that the fifth, sixth, and seventh grounds of demurrer are removed). ¿4, 5] 8,9,10. The remaining ground of demurrer is that the bill is defective for want of necessary parties. This point raises two questions : First, whether the bondholders’ committee are necessary parties to the bill; and, second, whether the shareholders’ committee are necessary parties to the bill. • In answer to the first question, it' is sufficient to say that the trustee under the mortgage, who is made a party to the bill, sufficiently represents the bondholders. This rule is well stated by Foster, as follows: “Trustees under a railroad mortgage, or under any other trust deed bf a similar nature securing the rights in real property of a large number of beneficiaries, are held, in all proceedings affecting the property which they thus hold, adeauately to represent the latter, who will be bound, in the absence of fraud, by notice given or a decree entered against trustees, although the court may in its discretion make any of such beneficiaries a party to the suit at his application.” 1 Foster’s Federal Practice (4th Ed.) 317. With respect to the second question, I have reached a different conclusion, for the following reasons: The shareholders, as appears from the bill and exhibits, are not members of the defendant corporation. The important issue raised by the bill is between the class of shareholders in whose behalf the bill is brought, on the one hand, and, on the other hand, the Knoll-wood Cemetery and the class of shareholders represented by the shareholders’ committee. As the bill is now framed, this latter class of shareholders is not represented; and, since in my opinion their interests would be affected by a decree in favor of the complainants, I think they should be so represented by making the shareholders’ committee parties to the bill, or, if that should be found impracticable, by making such members of the committee parties to the bill as may be fairly presumed to represent the interests of all this class of shareholders. Story’s Equity Pleading (10th Ed.) § 35b, pp. 143, 144. The first, second, third, and fourth grounds of demurrer are overruled. The fifth, sixth, seventh, eighth, ninth, and tenth grounds,of demurrer are sustained, with leave to the complainants to amend their bill. '