Hawes v. Oakland, supra, p.
104 U. S. 450,
reaffirmed.
Huntington filed this bill against Palmer, tax collector of the
County of Alameda, California, and the Central Pacific Railroad
Company, alleging that he is a stockholder of the company, and
that, on behalf of himself and such other stockholders as will come
in and contribute to its prosecution, he
Page 104 U. S. 483
brings the suit to enjoin and restrain the company from wasting
and misapplying its funds, as it threatens to do, by paying certain
taxes upon its property in that county which, he alleges, were
unlawfully and unconstitutionally assessed against it. The other
facts are sufficiently stated in the opinion.
The demurrer of Palmer was sustained to the amended bill, and a
decree rendered in favor of the defendants. Huntington
appealed.
MR. JUSTICE MILLER delivered the opinion of the Court.
The bill of complaint sets out that the railroad company is
unjustly and illegally taxed in many particulars, the laws under
which the taxes are levied being repugnant to the constitution of
the state, and in an amended bill they are asserted to be in
conflict with the Constitution of the United States.
It is unnecessary to examine into the sufficiency of the
allegations of the bill on these points, because we think it comes
clearly within the principles announced in the case of
Hawes v.
Oakland, supra, p.
104 U. S. 450.
Although the company is the party injured by the taxation
complained of, which must be paid out of its treasury, if paid at
all, the suit is not brought in its name, but in that of one of its
stockholders. Of course, as we have attempted to show in the case
just mentioned, this cannot be done without there has been an
honest and earnest effort by the complainant to induce the
corporation to take the necessary steps to obtain relief.
The complainant alleges that on or about the fifteenth day of
December, 1880, he did inform, and cause to be informed, the board
of directors of the company of the invalidity of the pretended
assessment and the taxes founded thereon, and did then and there
request the board to take such action or legal proceedings as might
be proper in the premises to test and determine their validity. He
also alleges that the board then
Page 104 U. S. 484
and there absolutely and willfully refused to do so, and that it
will pay these illegal taxes out of the funds of the company, to
the detriment of himself and other stockholders.
There is not, as in
Dodge v.
Woolsey, 18 How. 331, any averment that these taxes
are so burdensome as to be destructive of the corporation itself,
nor that there was any fraud on the part of the directors, nor
anything to show that their decision not to resist the taxes is
unwise, or opposed to the best judgment they could exercise in the
matter.
There is no averment of any effort to invoke the control of the
body of the stockholders, or any reason why it was not done. Nor is
it made to appear that a single stockholder was consulted by the
complainant, or has any wish to contest the payment of these taxes
with the state authorities.
It is the bald claim of one stockholder, owning $100,000 of the
stock out of $10,000,000, or thereabouts, without any serious
effort to bring the others to his views, or even the board of
directors, to assert a right of action for the whole body in the
very common matter of paying more taxes than he thinks to be
just.
There is here no formal written appeal to the board, nor any
formal resolution of that body, as in
Dodge v. Woolsey,
and there is nothing to repel the reasonable presumption that
parties were improperly and collusively made in order to invoke the
jurisdiction of the Federal court.
We are of opinion, therefore, that the demurrer was properly
sustained, and the decree dismissing the bill is
Affirmed.