Davenport v. Dows - 85 U.S. 626 (1873)
U.S. Supreme Court
Davenport v. Dows, 85 U.S. 18 Wall. 626 626 (1873)
Davenport v. Dows
85 U.S. (18 Wall.) 626
Although a stockholder in a corporation may bring a suit when the corporation refuses, yet, as in such case the suit can be maintained only on the ground that the rights of the corporation are involved, the corporation should be made a party to the suit, and a demurrer will lie if it is not so made.
Dows, a citizen of New York, in behalf of himself and all other nonresident citizens of Iowa who were stockholders in the Chicago, Rock Island & Pacific Railroad Company, filed a bill in the court below against the City of Davenport, and its marshal, to arrest the collection of a tax, alleged to be illegal, levied by the said city for general revenue purposes, on the property of the company within its limits. The bill assigned as a reason for its being filed by Dows, a stockholder in the company, instead of by the company itself, that the company neglected and refused to take action on the subject. A demurrer was interposed to the bill, which was overruled, and on the defendants' refusing to answer over, the circuit court ordered that the collection of the tax be perpetually enjoined. From this, its action, the defendants appealed, insisting that the circuit court erred in overruling the demurrer, for three reasons:
First. Because the railroad company was not made a party to the bill.
Second. Because the complainant had a complete remedy at law; and,
Third. Because the tax in question was a proper charge against the property of the corporation.