by that tribunal, but in our opinion the question is not before us on this record for the following reason: The district judge gave to the jury a clear and painstaking explanation of the questions submitted, and in general terms he instructed them about the proper method of distributing cars; but, no doubt by inadvertence (as he himself has stated in 237 Fed. on page 272), he did not call their attention in detail to some of the evidence, particularly to a table or blueprint that was regarded by the railroad as of much importance. Some of the railroad's requests for charge were based on this table, and, indeed, the argument of counsel in this court rested in large measure thereon. At the end of the charge the trial judge said:

"I think I have gone over the subject-matter of all of the different points submitted to me. So far as they are affirmed in the general charge they are affirmed, and so far as not affirmed in the general charge they are disaffirmed, and counsel, if they choose, may call my attention to any specific point which they would like to have specifically answered."

This was a plain request to counsel to call his attention to any omission, and in fairness to him should have been then complied with. But he was not asked to answer specifically any of the railroad's points. On the contrary, counsel replied as follows:

"In the first period we do not dispute the lost tonnage nor the cost. In the second period we dispute the correctness both of plaintiff's cost figures and also the tonnage. We ask that the court so charge."

The court immediately complied with this request, whereupon each party sent out its own calculation of the amount due in order to save the jury from labor. As it seems to us, the railroad should not now be allowed to complain, as it does complain by several assignments of error, that some of its requests for instruction were not given. The situation is dealt with so well in Thompson v. Lumber Co., 55 Pa. Super. Ct. 327, that we content ourselves by repeating what was said in that case by President Judge Rice:

"The charge as a whole was a clear, comprehensive, and impartial presentation of the issues of fact to be decided, and if there was omission to call attention to, or comment upon as fully as might be deemed desirable, specific facts or phases of the evidence, it was an inadvertency, which, if the judge's attention had been called to it doubtless would have been corrected. The decisions ars numerous, and are founded on just principles essential to the avoidance of undue expense and delay in the adjudication of cases, that inadvertent mistakes or omissions in reviewing the testimony should be called to the attention of the court before the case goes to the jury, so that the error, if there is one, may be corrected before it has done any harm. As to such inadvertent omission or mistake, it has been said, and we think the principle is applicable to these assignments, that 'a party may not sit silent and take his chance' of a verdict and then if it is adverse complain of a matter which, if an error, would have been immediately rectified and made harmless.' Com. v. Razmus, 210 Pa. 609 [60 Atl. 264]; Com. v. Minney, 216 Pa. 149 [65 Atl. 31, 116 Am. St. Rep. 763]; Medis v. Bentley, 216 Pa. 324 [65 Atl. 758]; Slavin v. Northern Cambria Street Railway Co., 47 Pa. Super. Ct. 454; Com. v. Eaby, 52 Super. Ct. 619."

[6] 3. With regard to the allowance of damages for delay in the form of interest, we find no error to correct. Although such an allowance in actions of tort is not a matter of right, it is nevertheless permissible and often forms part of a verdict. On the facts of this

case we cannot say that no allowance should have been made. The only ground of the objection is the difference between the amount originally claimed before the commission and the amount finally adjudged to be due, and this difference is not of itself sufficient to require us to decide as a matter of law that the plaintiff's original claims. were unduly inflated or made in bad faith. Besides, if the subject should be within our power on this record, the amount of this allowance, whether by the commission or by the jury, does not seem to us excessive, and we see no reason on this account to interfere with the verdict.

[7] 4. As to the award of counsel fees, we are similarly uncertain. We accept the statement of the trial judge that he confined himself to compensation for services in the District Court, and, as we do not know what facts he had before him, we are unable to say that any abuse of discretion appears from the mere amount of his award. In each case the judgment is affirmed.

(244 Fed. 61)

BOGERT et al. v. SOUTHERN PAC. CO.

(Circuit Court of Appeals, Second Circuit. July 2, 1917.)

No. 253.

1. CORPORATIONS 190-SUITS BETWEEN STOCKHOLDERS-PARTIES.

To a suit by minority stockholders against the majority stockholder based on the alleged misuse of its power as such for its own benefit and to the detriment of the minority stockholders, in which no corporate right is asserted, the corporation is neither an indispensable nor necessary party.

2. CORPORATIONS 204-LIABILITY FOR ACTS OF CONTROLLED CORPORATION. A corporation which through its control of another, which held a majority of the stock of a third corporation, caused the latter to take action detrimental to the interests of its minority stockholders, is liable therefor to the same extent as though it had been itself the holder of the controlling stock.

3. ELECTION OF REMEDIES 7(1)—ACTS CONSTITUTING ELECTION-INCONSISTENCY OF REMEDIES.

A fruitless attempt to recover by an unavailable remedy does not constitute an election which will deprive one of his rights properly recoverable by a different and appropriate remedy.

[Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Election.]

4. EQUITY ~71(1)—LACHES-LAPSE OF TIME-PENDENCY OF OTHER SUITS. The right of a complainant to maintain an effective suit to enforce his rights is not barred by laches because of the lapse of time alone where there has been no prejudice from the delay, and where complainant did not acquiesce in the situation, and was not inactive, but mistook his remedy.

Hough, Circuit Judge, dissenting in part.

Appeal from the District Court of the United States for the Eastern District of New York.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

Suit in equity by Henry L. Bogert and others, executors, against the Southern Pacific Company. Decree for complainants, and defendant appeals. Affirmed.

For opinion below, see 226 Fed. 500. See, also, 215 Fed. 218, and 211 Fed. 776.

Joline, Larkin & Rathbone, of New York City (Lewis H. Freedman and Arthur H. Van Brunt, both of New York City, of counsel), for appellant.

Dittenhoefer, Gerber & James, of New York City (H. Snowden Marshall, A. J. Dittenhoefer, David Gerber, and Dudley F. Phelps, all of New York City, of counsel), for appellees Henry L. Bogert and others.

George Gordon Battle, of New York City (H. Snowden Marshall, A. J. Dittenhoefer, David Gerber, and Dudley F. Phelps, all of New York City, of counsel), for appellees Sarah Rosenfeld and others. Before WARD, ROGERS, and HOUGH, Circuit Judges.

WARD, Circuit Judge. The history of the long struggle of the minority stockholders of the Houston & Texas Central Railway Company with the Southern Pacific Company, arising out of the financial difficulties of the railway company, down to the present suit, can be learned by reference to Carey v. Houston & Texas Central Ry. Co. (C. C.) 45 Fed. 438; Id. (C. C.) 52 Fed. 671; Id., 9 C. C. A. 687; Id., 161 U. S. 115, 16 Sup. Ct. 537, 40 L. Ed. 638; McArdell v. Olcott, 189 N. Y. 376, 82 N. E. 161; Lawrence v. Southern Pacific Co. (C. C.) 180 Fed. 822; Id., 228 U. S. 137, 33 Sup. Ct. 497, 57 L. Ed. 768. The grievance alleged in these prior suits was a corporate grievance, viz. that the foreclosure of the mortgages on the railway company's various lines had been brought about fraudulently by the Southern Pacific Company. The merits were not passed upon in any of these cases, each being dismissed on the ground that the decree of foreclosure could not be attacked collaterally because there was no proof of fraud, and in the last case supra because the railway company was an indispensable party.

The present suit on behalf of the minority stockholders was brought profiting by their previous mistakes, on an entirely different theory. It admits the validity of the foreclosure decree, asserts no corporate right of the railway company, but complains that the Southern Pacific Company has used its power as the majority and controlling stockholder for its own benefit to the detriment of the minority stockholders. Briefly stated, the cause of action is as follows: The railway company owed two classes of indebtedness: First, interest in arrear amounting with expenses of reorganization to some $2,600.000; second, a floating indebtedness to the Lackawanna Iron & Coal Company, $555,914.25; to Morgan's Louisiana & Texas Railway & Steamship Company, $1,795,570.81; to the Southern Development Company, $858,113.15-aggregating, with interest, some $3,000,000.

The reorganization was, generally speaking, wise, fair, and eventual

ly proved very successful. It was a part of the agreement that the Southern Pacific Company should pay the first indebtedness above mentioned, amounting to $2,602,615.77, and it did so. The stockholders of the railway company were given a right to their proportion of the capital stock of the reorganized company upon payment of their proportion of both the above accounts, which amounted to an assessment of about $71 a share. The Southern Pacific Company was given the right to take all stock not taken by the stockholders of the old company in consideration of its payment of the first account and of certain guaranties which it was never called upon to perform. As no stockholder of the old company was willing to pay the assessment of $71 a share, the Southern Pacific Company got the whole capital of $10,000,000 of the reorganized company for an outlay of about $26 a share. This is the unfairness which the minority stockholders say was imposed upon them by means of the control which the Southern Pacific Company, as majority stockholder, exercised over the railway

company.

In the District Court Judge Chatfield has set forth the facts and the law very clearly in two opinions reported 215 Fed. 218, and 226 Fed. 500, and he entered a decree requiring the Scuthern Pacific Company to deliver to the minority stockholders of the railway company their proportionate share of the stock of the reorganized company and of the dividends collected, with interest thereon, upon payment of $26,026 a share, with interest from February 10, 1891.

We will briefly dispose of the defendant's objections, some of which were not pressed in the court below.

[1] (1) As in this case no corporate right at all was asserted, the railway company was not even a necessary party.

[2] (2) We think there is nothing in the objection that the Southern Pacific Company cannot be held liable because it was not a stockholder of the railway company. This is literally true, but the record makes it perfectly plain that through its control of the Morgan Company, which held a majority of the stock of the railway company, the Southern Pacific Company did cause the railway company to waive defenses originally pleaded in the foreclosure suit and to consent to a decree of foreclosure. It could not do with impunity indirectly what it had no right to do directly.

(3) The defendant insists that it should receive credit for so much of the railway company's floating indebtedness as it gave up to carry the reorganization through, and that the minority stockholders should be assessed for their proportionate share of it. There is great force in this contention as stated. The trouble is that it was never raised in the case by pleading or otherwise until an exception was taken to the report of the special master. There is nothing in the record to show what, if anything, the Southern Pacific Company did give up. So far as appears, it was not a stockholder of the Lackawanna Company or of the development company, and could be interested in the claim of the Morgan Line only to the extent that it would be entitled as a stockholder to receive after payment of that company's indebtedness. Furthermore, the Morgan Line was secured by bonds of the railway

company as collateral of the face value of $880,000. Under these circumstances it is quite impossible to say what, if anything, the Southern Pacific Company gave up in connection with the railway company's floating indebtedness.

(4) It is next objected that, because Lawrence, the complainant's decedent, had knowledge of and contributed to all the prior suits against the Southern Pacific Company, he is estopped by the decrees in those suits upon the principle of res adjudicata. But the issue proposed in them was different, and nothing was decided except that the respective courts had no jurisdiction.

[3] (5) Then it is argued that the complainant is concluded by virtue of an election between inconsistent remedies, to wit, because the earlier suits of which he was a promoter, proceeded on the ground of fraud, whereas this suit goes on the ground of an implied trust. But there was no election. These claims were not opposite and irreconcilable. None of the former suits passed upon the merits, the courts simply deciding that they had no jurisdiction to attack the foreclosure decree collaterally. Henry v. Herrington, 193 N. Y. 218, 86 N. E. 29, 20 L. R. A. (Ñ. S.) 249. A fruitless attempt to recover by an unavailable remedy cannot deprive one of his rights properly recoverable by a different and appropriate remedy. Standard Oil Co. v. Hawkins, 74 Fed. 395, 20 C. C. A. 468, 33 L. R. A. 739; Barnsdall v. Waltemeyer, 142 Fed. 415, 420, 73 C. C. A. 515.

[4] (6) We do not think that the circumstances of this case justify defeating the complainant because of laches. One familiar ground is acquiescence, but the minority stockholders have not slept on their rights. They have been striving for many years to recover. No acquiescence, but exactly the contrary, a continuous and vigorous protest, appears. So far as the defense of laches depends, not on the mere passage of time, but upon another familiar ground, viz. a change in the situation prejudicial to the defendant, there is no evidence whatever to sustain it. The exact nature of the case has been known to the defendant from the beginning, and there is no substantial dispute of fact. No equities have intervened. It would be most inequitable to forfeit the complainant's rights notwithstanding the very long and unusual delay in prosecuting them.

(7) As the defendant owns the whole of the reorganized company's capital and contends that it is worth but little more than the assessment at $26 a share, a long inquiry would have to be gone into to ascertain its value. Therefore we think the court below was right in requiring the stock to be delivered in specie.

(8) What we have heretofore said on the subject of res adjudicata and election disposes of the objection made to the intervention of Gernsheim on these grounds. Intervention after interlocutory decree in favor of the complainant was proper. 1 Foster's Federal Practice, p. 434. The objection to the intervention of the representatives of Minzesheimer, deceased, because he is not shown to have owned his stock before the foreclosure proceedings, is founded on equity rule 27 (198 Fed. xxv, 115 C. C. A. xxv). That rule, however, applies to stockholders' suits asserting derivative rights on behalf of the corpora