Saturday, December 28, 2013

Webster Eisenlohr, Inc. v. Kalodner case brief

Webster Eisenlohr, Inc. v. Kalodner case brief summary
145 F.2d 316 (1944)

CASE SYNOPSIS
Petitioner corporation sought writs of mandamus and prohibition to be directed to respondents, a district court judge and a special master appointed pursuant to the judge's order, to prevent the special master from carrying out his commission to investigate the corporation from the District Court of the United States for the Eastern District of Pennsylvania.

CASE FACTS
A preferred shareholder brought an action on behalf of all preferred shareholders against the corporation regarding the voting power of the preferred shareholders. The corporation sent copies of its annual report to its shareholders and offered to purchase their interests. Counsel for the shareholder stated to the judge that all of the shareholders he represented sold their shares. The judge then appointed a special master to investigate the financial condition of the corporation and all circumstances relating to the purchase offer. The judge refused to vacate his order and the corporation brought the present action.

DISCUSSION

  • The court noted that the only matter before the district court was the issue of the voters' rights. 
  • Each selling shareholders had full legal power to sell his shares and could take steps to protect his rights if he felt he had been deceived. 
  • The report of the corporation and the sale of the stock were not involved in the litigation and thus, were outside the scope of investigation both by the special master and the district court. 
  • The court held that in light of its opinion, it was unlikely that the formal issuing of the writs prayed for would be necessary.

CONCLUSION
The court held that the investigation ordered by the judge was outside of the scope of the district court's and special master's authority, but declined to issue the formal writs prayed for.

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