After filing of a bill for injunction, defendants proceed at
their peril, and even if no preliminary injunction is issued, if
they inflict actionable wrong upon the plaintiff, the bill can be
retained for assessment of damages; but if the only ground left for
further prosecution is costs, the appeal will be dismissed.
Where, pending trial below and hearing of appeal, the object
unsuccessfully sought to be enjoined has been accomplished -- in
this case, the erection of a building by a bank -- the only ground
left for further prosecution is costs, and the appeal will be
dismissed.
Page 223 U. S. 671
An action by a stockholder for injunction against a national
bank and its director to restrain them from materially altering the
bank building will not be transmuted into an action for damages
against the directors for so doing; such an action will not
lie.
Appeal from 175 F. 739 dismissed.
The facts, which involve the power of directors of a national
bank to alter its building against the protest of a minority of its
shareholders, are stated in the opinion.
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a bill to restrain the defendants, a national bank, its
directors and a contractor employed by them, from pulling down the
bank building and erecting a six-story building in its place, the
first floor to be used for banking purposes, the other floors to be
let for offices. The plaintiff is a holder of stock in the bank,
and alleges that the intended construction is
ultra vires
and commercially unwise. The circuit court dismissed the bill on
the ground that, in the absence of bad faith, it would not revise
the judgment of the majority of the directors on the question of
policy, and that a national bank lawfully might turn its building
to the best account by adding upper stories for offices to let. The
circuit court of appeals affirmed the decree on the opinion below.
175 F. 739. Pending the litigation, the new structure has been
built.
Objections are interposed on both sides -- on the part of the
defendants, to the right of a stockholder to prevent by injunction
acts beyond the power of the corporation; on
Page 223 U. S. 672
that of the plaintiff, to the reception of the bank's answer
because it was adopted at a meeting of which the plaintiff's
brother, a protesting director, was not notified. Without giving
the slightest countenance to either, it is enough to say that the
whole case is disposed of by the erection of the new bank. No
doubt, after the filing of a bill for an injunction, defendants
proceed at their peril, even though no injunction is issued, and,
if they go on to inflict an actionable wrong upon the plaintiff,
will not be allowed to defeat the jurisdiction of the court by
their own act. In such a case, the bill will be retained for the
assessment of damages.
Milkman v. Ordway, 106 Mass. 232,
253;
Lewis v. North Kingston, 16 R.I. 15. But in the
present matter, the only ground for further prosecution of the case
is costs. There are no damages for which the plaintiff could make
any claim against the corporation for doing as it saw fit with its
own, lawfully or unlawfully. Furthermore, a recovery would be
futile. It would cost the plaintiff as much as it brought in. To
transmute the cause of action into a demand for damages against the
directors alone would be an essential change, and probably would do
the plaintiff no good, as it has been held in well considered cases
that that action also would not lie.
Smith v. Hurd, 12
Met. 371;
Allen v. Curtis, 26 Conn. 456. As the appeal
really is prosecuted only for costs, it must be dismissed.
Nixon v. Union Paper-Bag Machine Co., 105 U.
S. 766.
See Richardson v. McChesney,
218 U. S. 487. But
we are far from intimating that the plaintiff loses anything by
this disposition of the case.
Brown v. Schleier, 118 F.
981.
Appeal dismissed.
