Leo v. Union Pac. Ry. Co.

• Decision Date: 05 July 1883
• Citation: 17 F. 273
• Parties: LEO v. UNION PACIFIC RY. CO. and another.
• Court: U.S. District Court — Southern District of New York

17 F. 273

LEO v. UNION PACIFIC RY. CO. and another.

United States Circuit Court, S.D. New York.

July 5, 1883

George Zabriskie, for orator.

John F Dillon and Artemus H. Holmes, for defendant.

WHEELER J.

This suit is brought by the orator as a stockholder in the defendant corporation, of which the other defendant is president, to restrain the corporation from raising money on its bonds secured by a pledge in trust of the securities of other roads held by it, to aid in the construction and operation of connecting roads not a part of its own lines. There is a motion for a preliminary injunction, which has now been heard. The defendants make question in advance of the merits of the case as to whether it is brought within the requirements of the ninety-fourth rule in equity. The suit was commenced in the state court and removed into, and copies of record have been entered in, this court. Section 639, Rev St., provides, with reference to suits removed like this that--

'When the said copies are entered as aforesaid in the circuit court, the cause shall proceed in the same manner as if it had been brought there by original process; and the copies of pleadings shall have the same force and effect, in every respect and for every purpose, as the original pleadings would have had by the laws and practice of the courts of such state if the cause had remained in the state court.' Section 6 of the act of 1875 (1 Supp.Rev.St. 172) provides--

'That the circuit court of the United States shall, in all suits removed under the provisions of this act, proceed therein as if said suit had been originally commenced in said circuit court, and the same proceedings had been taken in such suit in said circuit court as shall have been had therein in said state court prior to its removal.'

This cause was removable under the act of 1875 as well as under the Revised Statutes, and may be said to be a suit removed under that act, so that the provisions of section 6 of that act would apply to it; and, so far as they would apply, they would supersede the provisions of the Revised Statutes, of course. This provision of the act of 1875 seems to refer to the stage of the proceedings in the suit at which the proceedings in the circuit court are to commence, rather than to the form, force, or effect of the pleadings in the cause previously had, and to leave the provisions of the Revised Statutes in force as to them. The rule could not be intended to apply to the state courts. And if the pleadings were in form, and verified, so as to be regular and valid in the state courts, the intention and effect of the statutes and rules would seem to be that they were to be taken to be so on reaching the federal courts. Further, rule 94 in terms applies only to bills brought by a stockholder against the corporation and others, 'founded on rights which may properly be asserted by the corporation. ' This does not appear to be such a bill. It is brought by a stockholder against the corporation and another, but not founded on such rights. The suit is against the corporation to restrain corporate action, and...