Model Building & Loan Ass'n v. Patterson

— This action is brought in the name of the plaintiff by the board of trustees thereof who were in office prior to January 28, 1895. They clam still to be such trustees, and they

It is well settled that a court of equity has no inherent power to try, as a naked question, the disputed title to office of trustees of a corporation; nor will it undertake to do so. Such a contest involves the determination of questions of law, which are not properly cognizable, in the first instance, in a court of equity. Where, however, one set of trustees claims to be defacto in office, and has the possession and control of the corporate books and assets, and it appears that a rival board of trustees, claiming to be such trustees de jure, is seeking to obtain possession and control of the corporate assets, then a court of equity will interfere, not to decide who are the legal trustees, but to prevent an unseemly struggle for possession between the rival boards of trustees; and, on a proper case being made, a court of equity will interfere by injunction, and restrain the claimants out of possession from interfering with the possession of "the corporate books and assets till the title of the rival claimants to office as trustees can be properly adj udicated upon, either in an action at law or by a proceeding in the natufe of a quo warranta, or by the summary proceeding provided by section 27 of the Gfeneral Corporation Law (Laws 1892, chap. 687), but the granting of such injunction is not to be construed as in any manner passing upon the validity of the-claim of either set of claimants to the trusteeship which they claim to hold. Reis v. Rhode, 6 Civ. Proc. Rep. 406; Ciancimino v. Man, 1 Misc. Rep. 121 ; 48 St. Rep. 697 , and cases cited. Applying these well-settled principles of law to the case now before me, I am of the opinion that, while plaintiff has failed to make out any case of conspiracy or fraudlent intent on the part of the defendants, yet it does appear that defendants do seek” to obtain possession and control of plaintiff’s books on the ground that they have been legally elected trustees of the plaintiff, and are entitled to such possession and control. The validity of defendants’ claim to such possession and control depends entirely on whether they are such trustees, and that issue, as before stated, cannot be tried in this action. Under all the circumstances disclosed on the trial, it seems to me proper, and for the best interests of plaintiff and its shareholders, that equity should interfere to prevent any unseemly contests or quarrels between the plaintiff and the defendants looking to obtain the possession and control of plaintiff’s books and assets until such time as the question as to who constitute the present board of trustees of plaintiff can be fairly passed upon in the manner provided by law. I therefore direct that the defendants be enjoined from interfering with or attempting to seize any property of the plaintiff; but such injunction shall not be construed in any way as interfering with or prevent-