Spring v. Webb

• Citation: 227 F. 481
• Parties: SPRING v. WEBB et al.
• Decision Date: 12 March 1915
• Court: U.S. District Court — District of Vermont

227 F. 481

SPRING v. WEBB et al.

United States District Court, D. Vermont.

March 12, 1915

Louis Marshall, of New York City, for plaintiff.

Frederick H. Button, of New York City (John W. Weed, of New York City of counsel), for defendants.

HOUGH District Judge.

Considering the number of stockholders' suits brought in this country, it is singular that so little authority is to be found on the question here presented. The industry of able counsel has not relieved the court of seeking what appear to be first principles.

It is I think, plain that this motion is properly brought, both in substance and as to time, under equity rule 45 (198 F. xxx 115 C.C.A. xxx). The applicable words of that rule are:

'In the event of the death of either party the court may * * * upon motion order the suit to be revived by the substitution of the proper parties. If the successors or representatives of the deceased party fail to make such application within a reasonable time, then any other party may on motion apply for such relief * * * as may be necessary. ' ^[1]

Prior to the passage of this rule the opinion was widely entertained that there was no method of reviving an equity suit, except by bill of revivor. Dillard v. Central Virginia Iron Co. (C.C.) 125 F. 157. Yet the practice was firmly established of permitting a defendant to move to dismiss, if such bill of revivor was not filed within a reasonable time after the decease of a plaintiff. Brown v. Fletcher (C.C.) 140 F. 639.

Bills of revivor are cumbrous survivals of antiquity, and in my judgment rule 45 was intended to regulate and make identical the method of revival and the method of penalizing a failure to revive; i.e., to make simple motions applicable to both contingencies.

Having regard to the past history of this case and the length of time that has elapsed since Spring's death, there has been a failure to move with reasonable speed on the part of the plaintiff. The appropriate action in such a condition of affairs would be to fix a period within, and lay down terms upon, which substituted parties might come in. But before getting this far it is necessary to consider defendants' proposition that the cause of action set forth in the bill does not survive, wherefore any formal revival or continuance of this action is futile.

It seems to me to clear the atmosphere to recall the distinction between abatement of suit in equity and abatement of action at law. As was said by Story, J., in Hoxie v. Carr, 1 Sumn. 73, Fed. Cas. No. 6,802, an abatement in equity--

'is not necessarily a destruction of the suit, like an abatement at law, where a judgment quod cassetur, is entered. It is merely an interruption to the suit, suspending its progress until the new parties are brought before the court; and if this is not done at a proper time, the court will dismiss the suit. ' ^[2] In a personal action at common law a suit abated utterly and forever, because the plaintiff's death abated the writ, and it is only by virtue of statutes, however ancient that this result has been prevented. No such rule ever obtained in equity, as Story, J., set forth with considerable elaboration in Clarke v. Mathewson, 12 Pet. 171, 9 L.Ed. 1041.

The orthodox view of the history of equity (as put by Blackstone) is that the jurisdiction of the Chancellor arose to correct 'that wherein the common law by reason of its universality was deficient. ' This resounding phrase means, among other things, that what equity originally took cognizance of law could not. Therefore, as long as the questions cognizable in the two jurisdictions were radically different in kind, no conflict was possible on the question of abatement and revivor. But for generations bills in equity have been filed to enforce legal rights, and it is obviously true that, if the death of a party terminated the legal right sought to be enforced, equity would follow the law, and the equitable action become after death incapable of continuance.

This is the proposition at the basis of this motion, viz., that this bill in equity is brought to enforce certain rights, legal in their nature, capable of enforcement at law by the Rutland Railroad, and only cognizable in equity because the power of chancery is necessary to enforce (in favor of the shareholders of the Rutland) rights which the corporation itself failed and refused to urge.

To put the matter in another way, it has always been possible to revive an action in equity; 'action' meaning merely the machinery by which rights are to be enforced. It was not originally possible in any way to review and continue a personal action at law abated by death; but by reason of statutes, some of them centuries old, it has long been possible so to do.

It is, however, idle to continue or revive any action, either at law or in equity, if the cause of action dies with the party. There is an obvious distinction between action and cause of action. Action is merely the form in which the cause of action is presented, while of the latter phrase it has been said that:

'In its simplest analysis the term 'cause of action' is synonymous with 'the right to bring a suit,' and that right is based upon the ground or grounds on which an action may be maintained. ' Payne v. New York, etc., R.R. Co., 201 N.Y.at page 440, 95 N.E.at page 21.

Therefore the ultimate inquiry as to the death or survival of what in common parlance is called a suit or action is to ascertain the true nature of the cause of action presented in the suit. It has not been found easy to define the nature of the cause of action put forward in what is now commonly known as a 'stockholder's action.'

It is undoubtedly derivative in its nature; that is, the stockholder can advance nothing that the corporation could not urge. It is essential to his success to prove that he is doing no more than the corporation itself ought to have done and the fruits of his victory must flow, not to him, but to the corporation, whose negligence, oversight, or wrongdoing is the excuse for his presence as a plaintiff. Porter v. Sabin, 149 U.S. 473, 13 Sup.Ct. 1008, 37 L.Ed. 815; Dickerman v. Northern Trust Co., 176 U.S. 188, 20 Sup.Ct. 311, 44 L.Ed. 423; De Neufville v. New York & Northern Ry. Co., ...