examined in open court, where their credibility could be tested by personal observation. The experienced judge who presided at the trial evidently believed that defendants' version of the transaction was substantially correct, and no sufficient reason appears for disagreeing with his conclusion on this disputed question of fact. In this court, therefore, it must be assumed that there was no actual or intended fraud. Indeed, this seems to be virtually conceded by the appellants, as their brief states the fundamental question here, aside from the right to judgment on the counterclaim, to be whether the evidence "admitted and offered fairly establish that the validity of the title of Jackson, Wolcott, and Kerr was not free from reasonable doubt." In short, the case for rescission of the contract rests, not upon proof of a fraudulent purpose accomplished by intentional deceit, but solely upon the claim that the title conveyed to Knupp, though supposed to be good and so represented by defendants, was afterwards found to be seriously defective. [1] The title in dispute is based upon a deed given in December, 1903, by the state board of education of North Carolina to one D. W. Morton, and an exhaustive argument is submitted, on the admitted and offiered evidence, to show that this was not a marketable title. To the opposing argument is added the fact, whatever its probative value, that the present owners, who hold under the same title, accepted that title in 1910 with knowledge of the objections raised by Knupp, and testified in substance that they had since been in undisturbed possession of the property and that no adverse claim had been made against it. We deem it unnecessary to decide the question. For the matter in hand it may be assumed that Knupp did not get a good title, because the state board of education had not acquired a good title, and therefore could not give one to Morton. On that assumption Knupp could have refused the deed tendered him by defendants, and compelled a return of the money paid on signing the contract. In the two months intervening there was nothing to prevent him from making the fullest examination. It was his right to have a marketable title to the property he had contracted to purchase, and he was not bound to accept the deed sent him, unless it conveyed such a title. But in point of fact he did accept it, without protest or objection, and such acceptance implied admission by him that defendants had complied with the terms of their agreement. During the following year there was no interference with his possession, and no attempt by other parties to assert a superior title to the property. Some question was raised when the 1907 notes were about to mature, but whatever purpose Knupp then had to repudiate the contract appears to have been abandoned, on the report or opinion of Moore, and the notes were paid without further objection. Assuming he was unaware at that time of the imperfections of title on which appellants now rely, and that they were not embraced in the reference to Moore, he did know of them, at least in a general way, when the 1908 notes were coming due, and he made demand for a rescission of the contract. Although this demand was met with immediate refusal, and steps were promptly taken to sell the lands for nonpayment of these notes, he waited some two years before bringing a suit to rescind; and the suit then brought was apparently allowed to stand without effort to have it tried until it was dismissed under the rule for want of prosecution. The subsequent suit, which resulted in the decree under review, was not begun until six years and more after the alleged fraud was discovered, and upwards of eight years after the deed had been accepted. We do not say that this long delay was sufficient of itself to destroy the right of rescission, which may have existed when the deed was offered, or even two years later, when the asserted defects of title became known; but we do say in the circumstances here disclosed that it cast a burden upon the plaintiffs which they are not shown to have sustained. After the acceptance of a deed which the grantor has contracted to give, and after payment of a large part of the purchase price, there must be a time when the grantee will not be permitted to rescind the contract on the ground of defective title, but will be left to the remedy of an action for breach of warranty. In our opinion that time had come when this suit was commenced; and this view seems to be confirmed by the fact that, although eleven years had passed since the state board of education conveyed the lands to Morton, it does not appear that any attempt had been made by legal proceedings or otherwise to recover possession of the property under claim of a paramount title. We are therefore persuaded that plaintiffs have failed to make out a case for equitable relief. The controlling principles of law are familiar, and reference to a few of the leading decisions will suffice, without resort to quotation. On the issue of fraud the decree below is supported by Southern Development Company v. Silva, 125 U. S. 247, 8 Sup. Ct. 881, 31 L. Ed. 678; Hennessey v. Woolworth, 128 U. S. 438, 9 Sup. Ct. 109, 32 L. Ed. 500; Lalone v. United States, 164 U. S. 255, 17 Sup. Ct. 74, 41 L. Ed. 425; Redwood v. Rogers, 105 Va. 155, 53 S. E. 6. It is equally supported on the issue of laches by Grymes v. Sanders, 93 U. S. 55, 62, 23 L. Ed. 798; Shapiro v. Goldberg, 192 U. S. 232, 24 Sup. Ct. 259, 48 L. Ed. 419; Max Meadows Co. v. Brady, 92 Va. 71, 78, 22 S. E. 845. [2] We are also of opinion that no error was committed in awarding judgment in favor of Wolcott and Kerr on the unpaid notes, which they had taken up and became the owners of before this suit was brought. It appears plain to us that these notes constitute a "counterclaim arising out of the transaction which is the subject-matter of the suit," and rule 30 (201 Fed. v, 118 C. C. A. v) provides that such a counterclaim "must" be stated in the answer. Indeed, it may be doubted whether the defendants named would not have waived the right to recover on these notes, if they had not set them up in answer to the plaintiffs' bill. Portland Wood Pipe Co. v. Slick Bros. Const. Co. (D. C.) 222 Fed. 528, and cases cited. The District Court had jurisdiction of the subject-matter and of all the parties in interest, and its authority to determine the whole controversy seems not open to question. Affirmed. 243 F.-11 1. TRUSTS FIDELITY TRUST CO. v. ALEXANDER et al. ALEXANDER et al. v. FIDELITY TRUST CO. (Circuit Court of Appeals, Third Circuit. June 19, 1917.) 61(2)—TERMINATION. A trust, created by an agréement of the trustee to hold property and accumulate the proceeds for the benefit of the cestuis, terminates on the death of the trustee. [Ed. Note. For other cases, see Trusts, Cent. Dig. § 84.1 2. EXECUTORS COURT. AND ADMINISTRATORS 250-ADMINISTRATION-ORPHANS' Plaintiffs' maternal grandparent devised property in trust for the benefit of plaintiffs and another brother and sister, who died unmarried. Under the Pennsylvania law, which governed plaintiffs' father, the testator was entitled to the shares of the children so dying; but he gave such shares to plaintiffs, and agreed to accumulate the proceeds of such shares for their benefit. At his death the testator disposed by will of such shares, which consisted of bank stock, to the exclusion of plaintiffs. Held that, on the administration of the estate, the orphans' court of Pennsylvania might have disposed, under its statutory powers, of plaintiffs' claim to the accumulations and the stock. [Ed. Note.--For other cases, see Executors and Administrators, Cent. Dig. 88 893-895.] 3. TRUSTS 359(3)-JURISDICTION-ADEQUATE REMEDY AT LAW. In such case plaintiffs allowed administration to proceed, and the bank stock was accounted for and distributed before they instituted suit. Held that, in view of the distribution and of the delay, plaintiffs were not, as they had an adequate remedy at law, entitled to invoke equitable aid to recover the value of the shares or of the accumulations. [Ed. Note.-For other cases, see Trusts, Cent. Dig. § 566.] Cross-Appeals from the District Court of the United States for the Eastern District of Pennsylvania; Oliver B. Dickinson, Judge. Suit in equity by John S. Alexander and others against the Fidelity Trust Company. From a decree for plaintiffs ([D. C.] 238 Fed. 938), defendant appeals, and plaintiffs also appeal, seeking to increase the amount of the decree. Reversed, and bill dismissed, on defendant's appeal, and appeal of plaintiffs dismissed. See, also, (D. C.) 214 Fed. 495; (D. C.) 215 Fed. 791. H. Gordon McCouch and Harold B. Beitler, both of Philadelphia, Pa., for Fidelity Trust Co. Frank A. Harrigan, of Philadelphia, Pa., and Henry A. Wise, of New York City, for Alexander and others. Before BUFFINGTON, MCPHERSON, and WOOLLEY, Circuit Judges. MCPHERSON, Circuit Judge. Federal jurisdiction of this suit in equity depends upon diversity of citizenship. The bill was filed in February, 1915, and is founded on the assertion that the Trust Company, For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes as executor of John Alexander (hereafter called the testator), came into possession of a trust fund belonging, not to the testator, but to the plaintiffs, and should account therefor. The District Court sustained the bill, and awarded the plaintiffs about $8,200, with interest from July 24, 1896. 238 Fed. 938. The company's appeal raises two questions: (1) Whether an indispensable witness-John S. Alexander himself, one of the plaintiffs, a son of the testator, and one of the cestuis que trustent-was competent under the Pennsylvania act of 1887 (P. L. 158); and (2) whether, in view of all the facts, this bill in equity can be maintained-the company's objections being (a) the existence of an adequate remedy before other tribunals; and (b) the laches of the plaintiffs, the testator having died in February, 1895, and the filing of this bill having been deferred for 20 years. Without expressing an opinion about the competency of the witness, we shall assume for present purposes that all his testimony was properly received, and shall confine ourselves to the second question. On this assumption the facts are as follows: The testator, who died in his ninetieth year, was married twice. By his first wife he had five children, Mary, John S., Archibald, Annie, and James; and by his second wife he had one son, Lucien, much younger than the others. George Jones, the father of his first wife, died in 1867, and devised certain property to the testator, to be held in trust for her five children, the income or the proceeds to be paid to them at such times and in such manner as the testator should think most beneficial. In October, 1868, James, one of the five, died intestate and unmarried, leaving a total estate of about $7,500. His brother, John S., became the administrator, but under the Pennsylvania law the testator, as the father of James, was entitled to the estate. Within a few weeks the testator and the four surviving children made a parol family agreement, by which the testator gave to these children all his interest in the estate of James. In December, 1868, pursuant to this agreement, John S., as administrator of James, bought 60 shares of the Corn Exchange National Bank with money of the estate, and had the certificate made out in the name of the testator as "trustee." The certificate was delivered to the testator, together with the remaining money belonging to the estate of James, and the testator agreed to hold the stock and the money, and also the undivided one-fifth interest of James under the will of George Jones, in trust for the benefit of the four surviving children; the terms of the trust to be similar to the terms laid down in that will. In November, 1869, Annie, another of the children, died intestate and unmarried, and soon afterward another parol family agreement was made, by which the testator gave to the three surviving children all his interest in Annie's estate, declaring that he would hold this interest also in trust for them under terms similar to those in the will of George Jones. All the dividends on the 60 shares, up to and including the dividend of May, 1877, were collected by the testator and divided among the children entitled thereto. Not long after May, 1877, the testator advised the three children to allow the dividends to accumulate in his hands "for a rainy day," and they agreed to this proposal. In May, 1878, the testator wrote the following memorandum in a book kept by him, in which he recorded his financial transactions: "May 9, 1879. Certificate 562, in name of John Alexander, for 60 shares of Corn Exchange National Bank stock, belongs to J. S., M. C., and A. A.” Between December, 1868, and the date of this entry, these shares had been transferred several times, and finally, on June 15, 1875, had been put in the name of John Alexander individually, and not as "trustee." The reason for this we do not certainly know (probably, that the stock might be used as collateral security); but there is no suggestion of wrongdoing by the testator. In July, 1894, he made a deed of trust to the Fidelity Company, transferring 90 shares of the Corn Exchange Bank stock (which included the 60 shares in question), a bond and mortgage, and some railway stock-the company to hold and administer this property until the testator's death, and then to transfer it to his executors for disposal under his last will. In February, 1895, the testator died, and the bank shares passed to his two executors, one of whom is dead; the Trust Company being the survivor. Immediately after the testator's death, John S. notified R. L. Wright, vice president of the Trust Company (who died in January, 1897), that his father's estate held some property as trustee, particu larly 60 shares of the Corn Exchange Bank, and that these belonged to his sister, his brother, and himself. He inquired also of the bank with reference to the transfer of the 60 shares, but obtained little information in reference thereto. Within a few days after the testator's death a caveat was filed on behalf of the three older children against the probate of the testator's will, alleging undue influence on the part of Lucien; but the caveat was overruled by the register on July 29, and the will was proved. No appeal was taken to the orphans' court from the register's decision until nearly three years afterward, and the contest was not finally disposed of until May, 1903, when the Supreme Court of Pennsylvania affirmed the decree of the orphans' court sustaining the will. Alexander's Estate, 206 Pa. 47, 55 Atl. 797. In the three-year interval between the register's decision and the appeal to the orphans' court, the executors went on with their duties, and filed their first account in the orphans' court; this being called for audit in April, 1896. One item in the inventory and appraisement of the estate was 319 shares of the Corn Exchange National Bank (which included the 60 shares now in question), and all the shares were accounted for by the executors in their first account. The present plaintiffs had notice of the audit, but made no objection to the account, whereupon the orphans' court entered a decree of distribution, under which 200 shares were sold at auction on July 23, 1896, and 119 shares (which included the 60 shares) were awarded to Lucien. On July 20, 1896, while the proceeding was still pending, John S. wrote to the Trust Company, protesting against the distribution on the ground that the attack on the will had not been finally determined, saying that Mr. Wright, the Trust Company's vice president, had assured the contestants that their interests would be protected, and declaring also that the will did not pro |