U.S. Court of Appeals for the Fifth Circuit, 1965

James Frank Palmer v. Morris B. Morris

James Frank Palmer v. Morris B. Morris
U.S. Court of Appeals for the Fifth Circuit · Decided February 15, 1965 · Tuttle, Rives, Dyer
341 F.2d 577; 9 Fed. R. Serv. 2d 21; 1965 U.S. App. LEXIS 6541 (Federal Reporter, Second Series)

James Frank Palmer v. Morris B. Morris

Opinion

PER CURIAM:

While the stockholders’ derivative suit was pending, sufficient other stockholders joined with the original plaintiff, Palmer, to cause the corporation “Altex” to desire to join in the litigation against other defendants. Thereafter the trial court entered an order realigning Altex as a plaintiff and dismissing Palmer as a plaintiff.

There was no justification for eliminating Palmer, the stockholder, who had commenced the action, merely because the corporation belatedly sought to join in his action. Cf. Twentieth Century Fox Film Corp. v. Jenkins, 7 F.R.D. 197, S.D.N.Y.1947.

There is no merit in appellees’ motion that since Altex has now filed for bankruptcy, the ease should be stayed until the trustee determines whether he wishes to continue the suit in Altex’s behalf. Meyer v. Fleming, 327 U.S. 161, 66 S.Ct. 382, 90 L.Ed. 595.

The order of dismissal was error. It is, therefore, reversed and the cause is remanded for further proceedings.

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