Raynes v. Sharp

• Decision Date: 04 March 1921
• Parties: RAYNES v. SHARP et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

238 Mass. 20

130 N.E. 199

RAYNES

v.SHARP et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 4, 1921.

Report from Supreme Judicial Court, Suffolk County.

Bill by Harry C. Raynes against Arthur R. Sharp and others, wherein demurrer was filed and overruled by a single justice of the Supreme Judicial Court, and the case reported on bill and demurrer for the determination of the full court. Decree overruling demurrer ordered affirmed.

The demurrer follows:

And further answering, these respondents say by way of demurrer to the complainant's bill and for causes of demurrer as follows:

(a) That said bill is multifarious.

(b) That the Court, has no jurisdiction to appoint a receiver of the plant or property of the Atlantic Corporation situated outside the Commonwealth of Massachusetts.

(c) That the Court has no jurisdiction to appoint any receiver of the Atlantic Corporation prior to the appointment of such receiver by the Courts of Maine, under the laws of which state said corporation was organized and exists.

(d) That a determination of the cause of action purported to be stated in said bill would mvolve the examination and adjudication of the internal affairs of said the Atlantic Corporation, a foreign corporation organized and existing under the laws of the State of Maine, and that the Court has no jurisdiction or authority to make such examination and adjudication.

(e) That this Court has no jurisdiction to grant the relief prayed for, to adjudicate that any assets and funds accruing to the Atlantic Corporation on account of said contract with said Fleet Corporation constitute a trust fund, or to order the distribution thereof or to liquidate said the Atlantic Corporation or order any distribution of its assets or to adjudicate as to the ownership of the entire stock of said corporation or to order any of said stock cancelled.

Wherefore these respondents pray that the complainant's bill be dismissed out of Court, and for their costs.Moorfield Storey and Henry M. Channing, both of Boston, for plaintiff.

Sherman L. Whipple, of Boston (W. G. Thompson, of Boston, of counsel), for respondents.

BRALEY, J.

We shall refer to the subdivisions of the demurrer by paragraphs, and under paragraph 4 it is contended that the court has no jurisdiction to examine into the internal affairs of the demurrant, the Atlantic Corporation, which although organized in another state has its office, and does business in this Commonwealth. It is alleged that through this instrumentality as managed by the individual demurrants, and their interlocking corporate interests and control, the plaintiff has been misled and defrauded, and that when certain fraudulent acts and combinations are set aside and consequent losses made good, the corporation instead of being insolvent will be financially able to pay for his services and transfer to him his proportionate share of the benefits of the joint enterprise which the corporation was formed not merely to promote, but to acquire title to the construction contract for building the ships, obtained chiefly by the plaintiff, and to receive the moneys paid under the contract by the United States Shipping Board, Emergency Fleet Corporation.

The bill even if the demurrant corporation ‘is no longer a going concern,’ does not ask for a winding up and dissolution, which can only take place under proper proceedings in the courts of its domicil, and the other demurrants being domiciled here, the corporation, if the allegations of the bill are made out, was merely their tool. See Arnold v. Maxwell, 223 Mass. 47, 111 N. E. 687. It is settled that under such conditions where in some form a satisfactory remedy justly may be given, this court in its discretion will entertain the bill. Wineburgh v. United States Steam & Street Railway Advertising Co., 173 Mass. 60, 62, 53 N. E. 145,73 Am. St. Rep. 261;Richardson v. Clinton Wall Trunk Co., 181 Mass. 580, 64 N. E. 400;Von Arnim v. American Tube Works, 188 Mass. 515, 74 N. E. 680. See Hancock National Bank v. Ellis, 172 Mass. 39, 46, 51 N. E. 207,42 L. R. A 396, 70 Am. St. Rep. 232;Howarth v. Lombard, 175 Mass. 570, 56 N. E. 888,49 L. R. A. 301;Walsh v. Boston & Maine Railroad, 201 Mass. 527, 88 N. E. 12.

The causes assigned in paragraphs two, three and five, that the court has no jurisdiction to appoint a receiver of the plant or property situate outside of the Commonwealth, or prior to the appointment of a receiver under the laws of the state of its origin, or to adjudicate that any of its assets or funds derived from, or received on account of the plaintiff's contract constitute a trust fund which may be marshalled, cannot be sustained. The form of relief it the plaintiff succeeds in establishing liability is for the court then to determine. It may be a money decree to be satisfied by the individual defendants severally or jointy, or solely by the corporation. United Zinc Cos. v. Harwood, 216 Mass. 474, 476, 103 N. E. 1037, Ann. Cas. 1915B, 948, and cases there collected. The court is not limited by specific prayers appearing in any form in the bill, but can under the general prayer decree adequate relief. Ginn v. Almy, 212 Mass. 486, 493, 99 N. E. 276;Eastern Structural Co. v. Worcester Auditorium Co., 216 Mass. 426, 428, 103 N. E. 913. It follows that the demurrer addressed to the prayers for specific relief even when read in connection with the thirty-fourth paragraph of the bill is not well taken. The first paragraph however assigns as cause of demurrer, ‘That said bill is multifarious.’ A demurrer on this ground is not equivalent to a demurrer, that no case entitling the plaintiff to equitable relief is stated. The demurrants do not specifically point out whether the bill is multifarious because of a misjoinder of causes of suit, or whether there is a misjoinder because they are made parties to the litigation with a material part of which they are not connected, and where different and independent decrees will be required. But it is stated in the brief that--

‘The wholly independent and distinct rights upon which the bill is based * * * cannot be enforced, and the wrong involved in their violation cannot be redressed in a single bill.’

It was long ago said that to lay down any rule generally applicable, or as an abstract proposition to say what constitutes multifariousness, is upon the authorities impossible. Robinson v. Guild, 12 Metc. 323, 328;Mharrison v. Perea, 168 U. S. 311, 18 Sup. Ct. 129, 42 L. Ed. 478. If there is a joinder of alleged causes so diverse and disconnected that the defendants will be subjected to great and useless expense the court ordinarily will dismiss the bill. But where it appears and is admitted that through a series of different material acts adopted and participated in by the defendants acting together for a common purpose to defraud the plaintiff, the objection of multifariousness will not be entertained. Andrews v. Tuttle Smith Co., 191 Mass. 461, 78 N. E. 99;Noble v. Joseph Burnett Co., 208 Mass. 75, 84, 94 N. E. 289;Ginn v. Almy, 212 Mass. 486, 493, 99 N. E. 276, and cases cited; Reno v. Cotter, 236 Mass. 556, 563,129 N. E. 300. We are of opinion that the bill calls for the application of this rule. The plaintiff a competent consulting mechanical engineer of many years experience, well qualified to construct a shipyard and to build steam cargo vessels, entered into negotiations with the United States Shipping Board, Emergency Fleet Corporation, for the purpose of securing a construction contract. And having selected a suitable site for a shipbuilding plant at...