Edwards v. Bay State Gas Co. of Delaware

• Decision Date: 09 November 1898
• Docket Number: 202.
• Citation: 91 F. 942
• Parties: EDWARDS et al. v. BAY STATE GAS CO. OF DELAWARE.
• Court: U.S. District Court — District of Delaware

91 F. 942

EDWARDS et al. v. BAY STATE GAS CO. OF DELAWARE.

No. 202.

United States Circuit Court, D. Delaware.

November 9, 1898

C Godfrey Patterson and J. H. Hoffecker, Jr., for complainants.

George Gray and H. H. Ward, for defendant.

DALLAS Circuit Judge.

This suit is brought by the several plaintiffs named, on behalf of themselves and of all other stockholders of the defendant corporation who may desire to join therein and contribute to the expense thereof. The sole defendant is the Bay State Gas Company of delaware. In great part, if not wholly, the subjects of complaint are not wrongs committed by the corporation, but frauds or breaches of duty perpetrated against it by its officers; yet none of the persons participating in the wrongful acts complained of have been made parties to the proceeding, and the anomaly seems to be presented of a suit in which there is no substantial defendant. The corporation, though properly made a nominal defendant (see opinion this day filed in Weir v. Gas Co., 91 F. 940), is to be regarded as really the complainant. It seems, indeed, to be so regarded by the learned counsel for plaintiffs, for upon their brief it is said:

'The object and purpose of this suit is the appointment of a receiver of defendant company, whereby a means may be provided for the recovery of the properties of said corporation. It is evident that such recovery may be obtained only through legal proceedings to be hereafter instituted by the receiver, the accounting also prayed herein being a necessary incident to enable such receiver to fulfill his full duty. While such legal proceedings might be instituted and maintained by the company itself, through its officers and directors, the admitted averments of the bill establish said officers and directors to be the wrongdoers, against whom (with others) such legal proceedings must be directed. The corporate management of defendant is still under the control of the persons guilty of and participating in the wrongful abstraction of the properties, and no request of said directors or officers has been made by complainants for bringing such suit on behalf of the corporation for such purpose, because such request would have been futile. The action, if brought, would not be conducted by them in good faith, nor would the court permit them, under the circumstances, to conduct the suit as against themselves.'

The theory upon which it is sought to...