Sims v. United Wireless Telegraph Co.
| Citation | 179 F. 540 |
| Parties | SIMS v. UNITED WIRELESS TELEGRAPH CO. et al. |
| Decision Date | 09 May 1910 |
| Court | U.S. District Court — District of New Jersey |
Frederick W. Garvin, Solicitor (George C. Lay, of counsel), for complainant.
Francis X. Butler, for defendant United Wireless Telegraph Company.
The complainant is a minority stockholder, and the defendant United Wireless Telegraph Company (hereinafter called the Wireless Company) the majority stockholder, of the defendant International Telegraph Construction Company (hereinafter called the International Company) a New York corporation.
The original bill was filed September 6, 1909. Both it and the amended bill were filed on behalf of the minority stockholders, and charge fraud. The amended bill alleges that before the Wireless Company became a stockholder of the International Company they were competitors, each being engaged in the manufacture, sale, and installation of patented devices and electrical machines used in the art of wireless telegraphy throughout the United States and foreign countries; that since, the Wireless Company has dominated the other company; that it elected four of its own directors to the directorate of five of the International Company, and manipulated it to prevent competition; that it has taken possession of the factory and the letters patent and other properties of the International Company, and is using them without compensation in furtherance of its own business and to wreck the business of the International Company, and to defraud fraud the rights and interests of such minority stockholders; that it is seeking to wrest from the International Company its property by a forced sale under a chattel mortgage and a judgment, both of which are alleged to have been fraudulently obtained, the latter during the time that its directors were the directors of the International Company, and that it is futile to seek any redress from such directors acting in such dual relation. It prays for a decree, inter alia, setting aside the chattel mortgage as fraudulent; setting aside or perpetually staying the said judgment; for an accounting by the Wireless Company of profits made in the use of the International Company's patents and other properties; that it be declared to be a trustee for the minority stockholders of the International Company; that it be required to restore to the International Company its property and to make full and complete discovery of all transactions and business between it and the International Company, concerning the use made of said patents, etc. A decree pro confesso was taken against the International Company. The Wireless Company filed no answer but pleaded three distinct defenses. The first is to the whole bill. It alleges the appointment on the 27th day of September, 1909, of a receiver for the International Company in a suit instituted in the state Court of Chancery on the 4th day of said September, by a creditor and a stockholder respectively, in which the present complainant intervened and challenges his standing to maintain this bill upon the ground that the cause of action alleged therein is now vested in and can only be maintained by such receiver.
The other two defenses relate only to the parts of the bill pertaining to the chattel mortgage, the first of which is that such mortgage was given before the complainant became a stockholder in the International Company, and that none of his shares devolved upon him by operation of law; and the second is that before the commencement of this suit proceedings had been begun in the state Court of Chancery to foreclose said mortgage, and that by reason thereof said court had obtained complete and exclusive jurisdiction of said chattels. The motion to strike these pleas from the files of the court is based upon the following grounds:
As to the first ground: The defendant's contention is that it has filed but one plea. The paper is so entitled, certified and sworn to; but however framed, it is in legal effect three pleas. ' Miller & Lux v. Rickey et al. (C.C.) 123 F. 604; 16 Cyc....
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Wise v. Pacific States Life Ins. Co.
...been held not to prevent one who began suit in another court before such appointment from prosecuting it to judgment. Sims v. United Wireless Tel. Co. (C. C.) 179 F. 540. Thus, although a federal court has appointed a receiver for a railroad, a state court may determine a claim against the ......