Parish v. Maryland & Virginia Milk Producers Ass'n
Decision Date | 27 May 1968 |
Docket Number | No. 103,103 |
Citation | 250 Md. 24,242 A.2d 512 |
Parties | Frank P. PARISH et al. v. MARYLAND AND VIRGINIA MILK PRODUCERS ASSOCIATION, Inc., et al. |
Court | Maryland Court of Appeals |
Charles Norman Shaffer, Rockville, and Herbert M. Brune, Baltimore (Brune, Robertson & Iglehart, Baltimore, on the brief), for Wayne E. Lenn et al., part of appellants and by Frank P. Parish, in pro. per. (Theodore F. Parish (Mrs. Frank P. Parish), both of Taneytown, on the brief), for Frank P. Parish and Theodore F. Parish, other appellants.
Francis D. Murnaghan, Jr., Baltimore, Md. (Paul S. Sarbanes, Baltimore, James R. Miller, Jr., Rockville, and Edward L. Merrigan, Washington, D. C., on the brief), for Maryland and Virginia Milk Producers Assn., Inc., part of appellees; by Stedman Prescott, Jr., Silver Spring (Jacob M. Berkson, Hagerstown, and Charles W. Prettyman, Rockville, on the brief), for William I. King et al., other appellees; and by M. Peter Moser, Baltimore (Berryl A. Speert, Baltimore, and Charles D. Sanger, Jr., Silver Spring on the brief), for Robert M. Goldman et al., Ex'rs of Estate of Arthur V. Robinson, other appellees.
Before HAMMOND, C. J., and BARNES, McWILLIAMS, FINAN and SINGLEY, JJ.
This appeal involves the question of whether the third amended bill of complaint, filed by eight plaintiffs, members of the Maryland and Virginia Milk Producers Association, Inc. (the Association), in the Circuit Court for Montgomery County, in equity, against the Association and thirty-four individual defendants, stated a cause of action in equity. The Circuit Court (Pugh, J.) held that it did not and sustained demurrers to it without leave to amend. From the order dismissing the complaint and requiring the plaintiffs to pay the costs entered by the Circuit Court on March 29, 1967, the present appeal to this Court was timely taken by six of the eight plaintiffs. We have concluded that the Chancellor was in error in sustaining the demurrers. We will reverse the order of March 29, 1967, and remand the case for further proceedings.
The original bill of complaint was filed February 4, 1965, by Frank P. Parish and Theodore F. Parish, his wife (Parish), who together owned a single membership in the Association, as a derivative suit against the Association, its directors, its auditor and two of its former employees. On April 9, 1965, the Circuit Court granted leave to six other members of the Association to intervene as parties plaintiff (four of those intervening plaintiffs and the two original plaintiffs are appellants in the present appeal), and, on the same day, granted leave to file an amended bill of complaint. The amended bill of complaint was filed the same day. On July 20, 1965, the Circuit Court (Shook, J.) sustained demurrers to the amended bill of complaint and on July 23, 1965, a second amended bill of complaint with one exhibit was filed. Demurrers were filed to this bill and after hearings before the Circuit Court (Shook, J.) some of the demurrers were sustained as to certain paragraphs and, in toto, as to certain parties. There were numerous proceedings thereafter, including extensions of time to answer, motions for separate trials, motions for taking depositions, a motion of the Parish plaintiffs to represent themselves, a motion for summary judgment, to protect witnesses and the like, all of which are of little importance to the present appeal (with one exception in regard to the argument of some of the appellees in regard to res judicata), as the Circuit Court (Pugh, J.), on February 13, 1967, passed an order dismissing all motions, demurrers and then permitted the filing of a third amended bill of complaint. The third amended bill of complaint (the complaint), with a number of exhibits, was duly filed on February 28, 1967, and, as we have indicated, it is from the Chancellor's order sustaining the demurrers to the complaint, dismissing it and requiring the plaintiffs to pay the costs, that the present appeal was taken.
The complaint, with its eight exhibits, is a rather formidable document. In the record, it consists of 39 legal-size papers with 53 pages of exhibits, a total of 92 pages; in the record extract the complaint consists of 41 printed pages with 36 printed pages of exhibits to which the Association has added 7 pages in the appendix to its brief, a total of 43 exhibit printed pages, or a total of 84 printed pages for both complaint and its exhibits. Although both the appellants and the appellees have in both their briefs and in their arguments occasionally considered material not in the complaint and its exhibits, it is clear that we are confined to the allegations in the complaint and its exhibits and reasonable inferences from those allegations in considering the propriety of the sustaining of the demurrers by the Chancellor. Standard Founders v. Oliver, 168 Md. 317, 345-346, 178 A. 223, 235 (1935). We will confine ourselves to those allegations and reasonable inferences.
The first five paragraphs of the complaint designate the parties, both plaintiff and defendant. Paragraph 1 describes the plaintiffs as follows:
(a) The plaintiffs, Parish, are together members of the Association and residents of Maryland. Their farm, 'Thorndale Farm' which they have owned continuously since prior to 1953, sold milk to the Association as a member since 1952 until the spring of 1966 under two contracts with the Association-one in the name of Mrs. Parish dated November 18, 1942 and the other in both names dated October 9, 1961. The contracts are attached as exhibits A and B as a part of the complaint. Mrs. Parish, in 1941, was enrolled as a member and operated the farm as a member until 1957. In accordance with the terms of the original contract, exhibit A, and the subsequent contract, exhibit B. the farm was operated from 1957 to 1961 in the name of Schott Brothers, but the leasing arrangement did not terminate the Parish membership in view of the provisions of Article VIII of the Association's Certificate of Incorporation, exhibit C, filed as part of the complaint. In 1961, the Schott Brothers lease was terminated and Parish executed the October 9, 1961 contract with the Association (exhibit B) and Parish continued to operate the farm from 1961 until a bona fide sale of their cowherd in the spring of 1966.
(b) The plaintiffs, Wayne E. Lenn and Edwin R. Lenn, trading as 'Lenn Brothers,' have been continuously members of the Association since 1952, and reside at Route 2, Culpeper, Virginia.
(c) The plaintiff, J. A. Bernard Dahlgren, trading as 'Windsor Lodge Farm,' has been continuously a member of the Association since 1959 and resides at Huntley, Virginia.
(d) The plaintiff, E. Irving Eldridge, has continuously, since 1955, been a member of the Association and resides at The Plains, Virginia.
(e) The plaintiff, Edward M. Wharff, Jr., has continuously, since 1959, been a member of the Association and resides at Woodbine, Maryland.
(f) The plaintiff, B. G. Wenger, Jr., has continuously, since 1950, been a member of the Association and resides at Woodstock, Virginia.
It is then alleged that the original complaint in the case was filed by the Parish plaintiffs on behalf of themselves and all other members of the Association similarly situated and that subsequently the other plaintiffs, above named, having received permission of the Circuit Court, intervened as plaintiffs and adopted the allegations of the Parish complaint.
Paragraph 2 describes the defendant Association. It is a Maryland corporation created and functioning as a 'farm cooperative' under Code (1957), Article 23, Sections 349 to 377. A copy of the Certificate of Incorporation, amended to date, was filed as part of the complaint as exhibit C. Under Article VII and VIII of the Articles of Incorpoartion 'the Association has the character of an incorporated trust, it acting as consignee of the members' milk-produce and as their agent 'to handle * * * process, store, finance, haul, transport, advertise, grade, standardize, market, distribute and do any of the foregoing things * * * (the) milk-produced by its members and products and by-products derived therefrom * * *. '' The Association has a statutory principal office in Frederick County, Maryland. It is regularly doing business in Montgomery County and in many other counties of Maryland and is also doing business in Virginia, the District of Columbia and elsewhere in the United States.
Paragraph 3 describes the defendants William B. Hooper (Hooper) and Arthur V. Robinson (Robinson) as the principal managing and operating officers of the Association during the perid of 1955 (approximately) to 1963. Hooper, who was secretary-treasurer-general manager of the Association, resides in Virginia and is engaged in business in the District of Columbia. Robinson, who was named as a defendant in the original bill of complaint and who was manager of the milk processing plant at Laurel, Maryland, and a resident there, died on September 20, 1965. His executors, Robert m. Goldman and J. Robert Sherwood, were on a proper motion substituted as parties defendant in Robinson's place.
Paragraph 4 describes the defendant directors of the Association. In view of the arguments of some of the director defendants, it will be necessary to set out the allegations of paragraph 4 in some detail. It alleges that all but three of the defendants listed below are present directors of the Association. These three are Charles C. T. Stull, Lester W. Huff and Dr. Oscar S. Martin. The year in parenthesis opposite each name indicates the year when each director became a member of the board of directors in accordance with the plaintiff's knowledge and belief:
'Directors Resident in Maryland
Merhl A. Adams (1962)
Harry W. T. Fouche (1963)
Upton F. Gladhill (1953 or earlier)
Paul B. Harlan (1953 or earlier)
William I. King (1963)
Walter A. Martz (1964)
J. Homer Remsberg (1953 or earlier)
Charles C. T. Stull (196...
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