In re Long Island Lighting Company, 365

• Decision Date: 03 May 1957
• Docket Number: 24502.,366,No. 365,Docket 24501,365
• Citation: 244 F.2d 499
• Parties: In the Matter of LONG ISLAND LIGHTING COMPANY et al. Ennis M. NICHOLS et al., Appellants, v. Harry A. ALKER et al., Appellees.
• Court: U.S. Court of Appeals — Second Circuit

244 F.2d 499 (1957)

In the Matter of LONG ISLAND LIGHTING COMPANY et al.

Ennis M. NICHOLS et al., Appellants, v. Harry A. ALKER et al., Appellees.

Nos. 365, 366, Docket 24501, 24502.

United States Court of Appeals Second Circuit.

Argued April 8, 9, 1957.

Decided May 3, 1957.

Harold G. Aron, New York City, for appellants.

David K. Kadane, Mineola, N. Y., Bertram D. Moll, Mineola, N. Y., of counsel, for appellees Long Island Lighting Company, Barrett, Fraser, Hausman, Blakeslee, Carpenter, Coe, Doebler, Link, Olmsted, Crummey, Hagerty, Booth, Tegen, Koons, Miles, Langley, Elbert and pro se.

Charles C. Lockwood, New York City, for appellee Vanneck.

Percival E. Jackson, New York City, pro se.

Winthrop, Stimson, Putnam & Roberts, New York City, Peter H. Kaminer, New York City, of counsel, for appellee Marks.

Before HAND, MEDINA and WATERMAN, Circuit Judges.

PER CURIAM.

These appeals are from orders made in this voluminous litigation, which we shall consider seriatim, beginning with the order in No. 14890.

No. 14890.

This appeal is from an order, entered on October 25, 1956, denying the plaintiffs' motion that the District Court "proceed to a trial of the issues of fraud and conspiracy set forth in the complaint." The action was begun in October 1954, by shareholders of the Long Island Lighting Company against its directors and others, alleged to have been in complicity with them, and was to recover damages suffered by the shareholders because of the fraudulent manipulation by the defendants of a reorganization of the company, the result of which was to put the common shareholders in a greatly inferior position in the reorganized company to that they had occupied in an earlier proposed reorganization. The defendants moved in the District Court to dismiss this action for reasons stated at large in our decision in Nichols v. Alker, 2 Cir., 231 F.2d 68, and the court granted the motion by an order that we affirmed on February 14, 1956. The plaintiffs moved for a rehearing which we denied on March 13, 1956, and thereafter moved this court to compel the defendants to answer the complaint, a motion which we described as in effect "a second petition for rehearing." This motion we denied, 2 Cir., 235 F.2d 246, but we added that the plaintiffs might, if they chose, apply to the District Court to reopen the reorganization ("enforcement") proceeding under Fed. Rules Civ.Proc. rule 60(b), 28 U.S.C.A. upon "substantial evidence of fraud which was not obtainable by due diligence in time to present it either in the original reorganization proceedings or in the subsequent petition filed in 1952, to reopen the reorganization proceeding." The plaintiffs never applied to the District Court to reopen the reorganization proceeding, so that, strictly speaking, the motion that the order now on appeal denied, was not within the leave granted. That order is, however, the equivalent of a denial of a motion to reopen the dismissal of the action (No. 14890), and, arguendo, we will assume that the conditions we laid down for reopening the reorganization proceeding would apply to it. Regarded as such a motion it did not, however, conform to the prescribed conditions, for the plaintiffs conceded at the hearing that they had "discovered no new evidence since 1952." Thus the motion to proceed in the action, not being within the leave granted in 231 F. 2d 68, was properly denied even though it be treated as one to reopen the reorganization proceeding. Indeed, it is even less defensible, if treated as what in fact it...