Kingman v. Rome, Watertown & Ogdensburgh Railroad

Headnote

Persons -buying stock, in order to bring actions for past wrongful acts of directors, a/re not fmored by courts of equity.

Appeal from an order made at a Special Term, denying a motion for an injunction.

The court at General Term said: “ This is an appeal from an order denying a motion on the part of the plaintiff to continue an injunction. Both the plaintiff and his assignor appear to have become owners of the one hundred shares of stock on which the suit is brought, sometime after the proceedings had been taken, of which complaint is made, the stock having been transferred to the assignor on January 10, 1883, and to the plaintiff on January 16, 1883 ; and the action of the directors, of which complaint is made, was taken in the month of December previously. It seems to be a fair inference from these facts, that the plaintiff and his assignor bought into the company for the purposes of bringing this suit and carrying on this litigation, and it has been held in several cases that persons occupying that relation to a transaction are not entitled to any special favor of the court. (Robson v. Dodds, L. R., 8 Eq., 801; Homes v. Oakland, 104 U. S., 461 ; and see Rule of Practice in Equity in the U. S. Courts, 104-U. S.) Such parties are regarded as interlopers seeking to disturb the rights of innocent holders of stock, to their great prejudice, and should not be allowed to have or retain injunctions where their rights can be preserved by awarding damages for such injury as they may have sustained.”

The court then held that in any event the plaintiff had failed to make out a clear case entitling him to an injunction.