Charles A. Strout, trustee, vs. United Shoe Machinery Company & others

Massachusetts Supreme Judicial Court1913-05-24

215 Mass. 116

Summary · law.co

Holding. The court affirmed the trial judge's allowance of the amendment substituting the trustee as plaintiff and remanded the case to the Superior Court for further proceedings.

A trustee of a corporation sought to be substituted as plaintiff in place of individual stockholders in an equity action against United Shoe Machinery Company. The defendants contested the court's power to permit this amendment. The court held that trial courts possess broad authority to amend pleadings in equity cases, guided by statutory principles that apply by analogy. The amendment was treated as establishing continuity of the underlying cause of action, particularly since the original plaintiffs' stockholder interests and damages could only be pursued by the corporation itself, and the motion was advanced by the same counsel with the apparent consent of the original plaintiffs rather than by an outside third party.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether courts have authority to amend pleadings in equity cases to substitute parties
Whether amendments are permissible after entry of judgment dismissing an original bill
Whether substitution of a trustee of the affected corporation for individual stockholders presents procedural barriers

Procedural posture

The case came before the appellate court on a report from a Superior Court judge who, following an earlier decision ordering dismissal of the original bill, allowed a motion to amend by substituting the trustee as plaintiff.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Rugg, C. J.

This case now comes before us on. a report from a judge of the Superior Court who, after the decision in 209 Mass. 539, ordering that the bill be dismissed, allowed a motion substituting Charles A. Strout, trustee of the Goddu Sons Metal Fastening Company, as the plaintiff and an amended bill of complaint. The case has been elaborately and ably argued in behalf of the defendants, but in the view we take the points upon which the decision hinges lie within narrow compass.

The defendants challenge the power of the court to allow such an amendment. The power of the court in this regard is very broad. R. L. c. 173, § 48, although not in express terms governing suits in equity, has been treated as applying to them and stating general principles touching amendments in equity. Drew v. Beard, 107 Mass. 64, 76. King v. Howes, 181 Mass. 445. Day v. Mills, 213 Mass. 585, 587, and cases cited. At the lowest the practice prescribed by the statute is adopted by analogy in equity.

The allowance of the amendment by the court is made “conclusive evidence of the identity of the cause of action.” Tracy v. Boston & Northern Street Railway, 204 Mass. 13, 17. Moreover, although no evidence was offered before the trial judge he heard statements of respective counsel. These statements are not reported and it is impossible for us to review the action of the judge, which must have been based in part upon such statements and the inferences rationally drawn from them. Under these circumstances it is not necessary to analyze the amended bill nor compare it nicely with the one originally filed. It is enough to say that the damages which accrued to the original plaintiffs and which they sought in their own names can be recovered only by the corporation in which they were stockholders, and perhaps only in the present form of action. It was competent for the court to grant the amendment even after rescript ordering final judgment. Merrill v. Beckwith, 168 Mass. 72.

The motion of Mr. Strout must be assumed to have been made with the consent and approval if not by the active co-operation of the original plaintiffs. It was made by the same counsel who brought the suit originally. The case is distinguishable, therefore, from those relied on by" the defendants, where some third person sought against objection to inject himself into the case as a party plaintiff.

It is not fatal as matter of law to the allowance of a motion to amend, that at the trial complicated issues may be raised involving a consideration of the laws of a foreign State and the powers of officers appointed by its courts.

It cannot be said that upon this record appear such loches of the original plaintiffs or of the substituted plaintiff as to prevent the allowance of the amendment as matter of law. The question of loches, if properly raised at the hearing, is not precluded by anything now said.

In accordance with the terms of the report the entry may be,

Order allowing motion to stand and case remanded to Superior Court for further proceedings.