Gould v. Thompson , 1868 N.Y. Misc. LEXIS 201 ( 1868 )

Boardman, J.

The motion to set aside this injunction must be granted for the following reasons :

First, The plaintiffs, who are two of the directors of the Erie Railway Company, are hot the re’al parties in interest, {Code, % 111). In fact they have no interest in the subject matter of the action within the meaning of § 117 of Code, nor are they trustees under § 113. If all the directors had' been joined as plaintiffs instead of two, it would not have improved the plaintiffs condition. The company alone could maintain such an action if maintainable. (N. Y. & N. H., R. R. Co., agt. Schuyler, 17 N. Y., 592.) The directors are not necessary or proper parties; whatever judgment or decree binds the.company binds the directors who are only the agents, the hands of the company.

The plaintiffs in this action can obtain no decree settling the rights of the defendants between themselves. Defendants have no claims against the plaintiffs upon which affirmative relief could be supported. Nor have the plaintiffs, either personally or as trustees or directors, any equitable clainr against any or all of the defendants. (1 Abb. 381; 1 E. D., Smith, 349 ; Story Eg. Pl., %% 231, 232, 235; 6 John. Ch., 46 ; 11 N. Y., 94.)

Second, The defendants have no common interest in the subject matter of the suit or the relief demandéd. Part of the defendants are directors of the Erie Railway Company, (which is also a defendant,) and part preferred stockholders. They may have no joint or common interest or liability, but upon the contrary their interests are diverse and opposing. (Story's Eg. Pl., §§ 533 &c.; Code, §§ 118, 119; 7 Abb. Pr. R., 41, 67; 8 Id., 239.)

Third, The relief sought in this action is the instruction of the court to the plaintiffs, as to their duty in the. premises. That instruction would-have followed as a necessary consequence from the .action by the preferred stockholders, so far as respects all the parties to this action. It could have bound no others, nor can this action, becaüse other persons who may be interested in the profits of the company are not made parties. In this respect therefore, the' plaintiffs were not justified in bringing a cross suit, because all that can be determined in this action could have been as well or better determined in the action * by the stockholders. (5 Abb., 55 ; S. C., 14 How., 178 ; 5 Band., 612; 1 Barb., Ch. Pr., 53.)

Ordinarily it is improper to restrain by injunction in one suit, proceedings in the same court in another action where the same relief may be granted. (2 Abb. N. S., 58; 26 How., 448 ; 16 Id., 244, 23 Id., 174; Clarke, Ch. R., 309; 1 Whit. Br., 461, § 99, 3d Ed.)

Fourth, The only aspect in which this action can be sustained, is to prevent a multiplicity of suits. It has already been shown that such an action should have been brought by the Erie Railway Company, as plaintiffs—that two of its directors have no such interest in the question as would make them proper parties plaintiff if parties at all—that the parties defendant have no common interest in the relief demanded and the matters in controversy—that their rights, interests and duties are diverse and opposite, and cannot be adjusted between themselves in this action.

It follows therefore, that this action cannot be sustained and the injunction should not stand..

Upon the propriety of granting injunctions to prevent a multiplicity of suits. (See 10 Abb., 284, and cases cited, 8 Id., 239; 14 N. Y., 534, 541.)

Fifth, It may well be doubted whether an injunction ought to be granted in this action, to restrain proceedings in another action in the same court, between the same parties, when equal and greater relief could have been had in such other action by motion, answer or decree. The authorities are adverse to such use of the power of the court. (Voorhie’s Code, 8th Ed., 402, (d.); 1 Till, and Shear. Pr., 677; 1 Whit. Pr., 461, § 99.)

It is apparent that relief to the same extent and of the same efficacy cannot be had in this cause, even if maintainable. If this action cannot be maintained, it is of no consequence which action was first commenced. The preferred stockholders have the right to test the question, whether the Erie Railway Company have earned a dividend- upon the preferred stock, and if so to enforce the duty of said company, to declare and pay such dividend.

There is too much' doubt about the plaintiffs cause of action, the plaintiffs interest and the right to an injunction under the circumstances, to permit this order to stand.

The motion of defendant Thompson, to set aside the injunction heretofore granted in this action against him, is granted with $10 costs of this motion to defendant Thompson, against the plaintiffs.