( FEDERAL REPORTER.
Brosnan Gow Mmiue Co. v. BAKER.
C (Circuit Court, D. Ualdornia. March, 1884.)
1. INVALID OoN·rnAc·r—CoNrRAo1· U1.·rnA Vrana Coivrans N0 Bmnnurr.
No benefit can accrueto a partyin derogation of the interests of acorporation
through a contract with any of its olhcers acting ultra orres.
2. SAMn—QuAsr Tnusrnn.
A creditor holding the property of a corporation in order to apply the prof-
its thereof to the reimbursement of himself and the payment of its other debts,
is analogous to a trustee, and must return to the stockholders the remnant of
the pgoperty in his hands after the purposes of his quasi trust have been sub-
SGTVC .
3. SAME—DI<}FENDAlYT PARTY MAY TAKE Bmnmrrr or rmi: FRAUD.
The stockholders of a corporation may enjoy a benefit that has arisen out
of an act done by their oihcers in the effort to defraud them.
4. SAME—PRAC'DICE—PART1ES.
It is not essential, in a suit brought bya corporation against one who retains
its property through the invalid contract of its oiiicers, that such ohicers be made
individual parties in the bill.
On Demurrer to Complaint.
Stewart rc Herrin, for complainant.
Van Cliof at Gear, for defendant.
Before SAWYER and SABIN, JJ.
SABIN, J., (orally.) In this suit a demurrer to the bill has been filed.
The grounds of demurrer are: First, that the bill does not state facts
suflicient to constitute a cause of action; and, second, that Chapman
and Sayre are necessary parties to the bill.
I shall not attempt an extended review of the case, as I do not
· deem it necessary, nor have I so thoroughly collated the facts in the
case as I should desire, were I to attempt to review it upon all the
points raised. But it seems to us that the considerations which I am
about to submit are controlling in the matter; and, if so, the demurrer
upon both points must be overruled.
The bill sets out that in 1876 the defendant, Baker, entered into a
certain contract, "A," with the Pioneer Mining Company, the prede-
cessor in interest of plaintiff in this suit. This contract was for the
purpose of securing the payment to Baker of an acknowledged indebt-
edness due him from said company, as provided therein. In case
this indebtedness was not paid within three years from the date of
said contract, Baker was entitled to take possession of the property
and mines of the company, work the mines, and from the net pro-
ceeds thereof pay himself the amount due him, with expenses, and a
reasonable compensation for his services. Subsequent to that con-
tract, another contract, "B," was entered into between Baker and W.
S. Chapman, then president of said Pioneer Mining Company. This
contract was made, as alleged in the bill, for the benefit of said company,
and, taken in connection with contract "A," there can be little, if any,
doubt on this point. It was virtually in aid of contract "A." Its