Shell Fetroleum Corporation v. Paul O. Stueve Law No. 896

Although a party may set forth two or more claims alternatively and hypothetically, and as many claims as he has regardless of consistency, and may demand relief in the alternative, he must, nevertheless, comply with the provisions of Rule 8 (a) (2) that the pleading must contain a short, simple and plain statement of the claim.

(See opinion in this case under Rule 7 (c) }

When Hov.
Presented - By Pleading or Motion
Motion for Judgment on Pleading

Subdivision (b) - How Presented

Eastern District of Pennsylvania

December 6, 1938

Joseph D. Rosenberg v. Hano & Company, et al. - No. 20,700

Editorial Headnote

1. Objections to the complaint on the grounds that it does not state a cause of action, that the action was not brought within the time prescribed by the Act upon which based and that the statement of the claim is defective because of vagueness, should be raised by motion and not by entering a rule, However, as defendant had obtained such a rule, it should be treated as a motion. (Rule 12 (b))

Determination of question of sufficiency of complaint which is presented on motion may be deferred until the trial. (Rule 12 (d) }

2.

DICKINSON, D.J.

The grievance of the plaintiff is that he was induced by the defendants to give $54.75 per share for the stock of the Schenley Distillers Corporation when its real value was only $17.75 per share. The defendants are a Brokerage House and one of its salesman. There is no averment of diversity of citizenship.

The jurisdiction of this Court to entertain the action is based upon the feature that the action is in turn based upon the National Securities Exchange Act of June 6th, 1934, 15 U.S.C.A., Section 78 (1).

The Rule before us is one to strike off the Statement of Claim. The grounds for the motion are:

Counsel for defendants have made use of the term familiar to Pennsylvania practitioners of a "Rule to show cause". In this they have offended against the new terminology of the law. Under Rule 12 of the New Procedure Rules it would seem that a Motion should be made, not a Rule entered. There is a difference, as well as distinction in such motions. Some may be based upon averred defects in the form of the statement of the cause of complaint. Another may go to the basic question of whether the complaint sets forth a cause of action. Rule 12 recognizes this by providing that the Court may on motion rule the question raised or "postpone this disposition until tried on the merits". There is room in the instant case

for this differentiation. Some of the averments of the complaint are so vague as to be unintelligible. The averment in paragraphs 6 and 7 that the defendants had advised him to get in on "this deal for a 15 point advance in a day or so", and that "Hano & Company had made a deal to that effect" is almost meaningless. Does it mean that Hano & Company with others would peg the price of the stock at 15 points better than $54.75 per share? If it means that a vague statement was made with intent to create that impression, an innuendo is called for. The like comment applies to Paragraph 13. It conveys no meaning to the reader unless he has outside information of to what it refers.

The se
They

We do not have the Act of Congress before us but it is stated by counsel to have a provision that the action brought under its provisions must be instituted within one year of the discovery of the misconduct of the party charged with it and within three years of the transactions. provisions have been argued as if they were a Statute of Limitations. are much more than that. They impose a condition upon the right of action given by the Act of Congress. Compliance with these conditions must be averred. An injury due to fraud and deceit will give a cause and hence a right of action. This Court cannot entertain it however because of the lack of venue jurisdiction.

Hence the necessity of basing the cause of action upon a law of the United States. The cited Act admittedly gives it but compliance with the conditions imposed by the Act must be averred.

The conclusions reached are as follows:

1. Paragraphs 7 and 13 of the complaint are open to the

objection of vagueness and indefiniteness,