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The disturbed condition of public and private business which prevailed in this state during the civil war did not prevail in New York, where the corporation had its chartered existence and where most of the holders of stock resided. After the termination of the civil war in 1865 the state and federal courts were open for the administration of justice, and the rights of property, of which the plaintiffs were temporarily deprived by the armed violence of the defendants, could easily have been restored by the courts, or the military power that prevailed in this state for three years. The rights of property of citizens of the northern states were not affected by the statutes of limitations, or legal proceedings in the courts of the insurrectionary states during the civil war.
As the plaintiffs have not set forth their claims with sufficient certainty, and have not assigned any reasons why they have so long slept upon their rights, they cannot properly complain at the operation of well-settled principles of equity jurisprudence upon the subject which have been adopted and are enforced for the peace and wellbeing of society. Badger v. Badger, 2 Wall. 87; Hawes v. Oakland, 104 U. S. 450.
There can be no fixed and definite rule established by a court of equity as to what delay in asserting a right will amount to an equitable bar from lapse of time, as there are different circumstances and elements involved in each case. I think, however, that the principle insisted upon by the counsel of defendants in his brief is well sustained by reason and authority; that “in mining property, which is hazardous, uncertain, and speculative, greater diligence is required in asking for the specific performance of contracts relating to mining lands than to other lands.” Leading Cases on Mines, etc., 397; Twin Lick Oil Co. v. Marbury, 91 U. S. 587.
As my decision in this case may be reviewed in the supreme court, I feel it to be just to the defendants to consider other causes of demurrer which have been assigned.
The defendants insist that this bill cannot be sustained in behalf of the feme plaintiff, as it appears that she is a feme covert suing in her own name, and her husband is not made a party.. The rules of equity pleading upon this subject are too familiar and well settled to need discussion or much citation of authority. A feme covert must sue and be sued jointly with her husband, unless she claims a right in opposition to him, in which case her prochien ami, with her consent, may exhibit a bill in her behalf, and her husband be made a
party defendant. Courts of equity will in some cases recognize & feme covert as capable of disposing of her separate property and doing other acts as a feme sole. She may in some instances act as a trustee, or execute a power, without the concurrence of her husband, if such act does not defeat a right of the husband, or impose a legal responsibility upon him. But in all suits in equity in which a feme covert sues or is sued, the husband must be a party plaintiff or defendant whenever he is within the jurisdiction of the court and can be made a party. Story, Eq. Pl. 8 63; 2 Story, Eq. Jur. § 1368.
The rules of equity pleading upon this subject are not affected in any manner in this court by the right which a feme covert may have to institute suits in her own name, under state laws, as the practice act of 1872 (Rev. St. 914) does not apply to the pleadings and modes of procedure in federal courts of equity. Blease v. Garlington, 92 U. S. 1.
The bill does not show whetber the interests of the feme plaintiff are adverse to, or in conformity with, those of her husband. If it appeared that she is suing for her separate estate and the husband refused to join with her in the suit, I would allow a proper amendment, so as to introduce a prochien ami and make her husband a defendant; and this amendment would not oust the jurisdiction of the court on account of the same citizenship of the parties, as the husband defendant would be only a formal party. Wormly v. Wormly 8 Wheat. 451.
If, however, the husband has a substantial adverse interest to the feme plaintiff, then such amendment could not be allowed. The husband is an indispensable party to a suit in equity where the wife sues or is sued, and his non-joinder is sufficient cause for the dismission of a bill, if an amendment making him a party cannot properly be allowed.
It is a general rule in equity that all parties interested in or entitled to litigate the same questions in controversy are necessary parties. They must be expressly made parties, or the bill must be so framed as to give them an opportunity to come in and be made parties. This principle is only departed from when it is extremely difficult or inconvenient to enforce this rule. This general principle has in some degree been modified by section 733, Rey. St., and the twenty-second and forty-seventh rules adopted by the supreme court for the regulation of the practice of United States courts of equity. By virtue of this statute and these rules courts of equity may dispense with merely formal parties; and in cases where the real merits of the cause may be determined without essentially affecting the interests of absent parties, whose interests are separable from the other litigants, it may be the duty of such courts to make a decree as to the parties before them. But neither the act of congress nor the rules of the supreme court enables the circuit court to make a decree in equity in the absence of an indispensable party whose rights must necessarily be affected by such decree.
This principle is founded upon the broad ground of natural equity and justice that prevails in all systems of enlightened jurisprudence, that no court ought to adjudicate directly upon a person's rights without the party being either actually or constructively before the court, with opportunity for explanation and defense.
Although it is a general rule in chancery that a bill will not be dismissed for the want of proper parties, yet if, upon the hearing of a bill, the court sees that an indispensable party is not on the record, and cannot be made a party without ousting its jurisdiction, it will refuse to proceed, and dismiss the bill. Shields v. Barrow, 17 How. 130; Bank v. Railroad, 11 Wall. 624.
There are other questions which were presented in the pleadings, and they were insisted on in the argument, as to what were the rights and interests of the creditors of the corporation for whom relief is asked in the prayer of the bill; and what were the rights, duties, and responsibilities of the directors of the Gold Hill Mining Company.
All the rights, interests, and property of an insolvent or dissolved corporation constitute a trust fund, and are held,-First, for the pay. ment of creditors; and, second, for the benefit of the stockholders.
It appears on the face of the bill that at the time the corporation suspended the exercise of its functions and franchises in 1861 there were creditors to the amount of $40,000, and there were no available assets for immediate payment. There was an assessment on the stock to the amount of $20,000, but it does not appear that the same was collected and applied in payment of debts.
It in no way appears that the prior and exclusive equities of creditors have ever been adjusted and discharged by the corporation assets. Under such circumstances it seems to me that this court cannot proceed to make a decree as to the secondary and subordinate equities of the stockholders to the property of a once insolvent and now dissolved corporation, unless the existing creditors (if there be any) are in some way represented in this suit. This is a stockholder's bill, and they cannot properly represent the rights and interests of creditors, which are not identical with those of the plaintiff, but different, superior, and conflicting. But for the prayer in the bill for relief in behalf of creditors, I would suppose that all the claims of the creditors had been satisfied and discharged under proper legal and equitable remedies afforded by the courts, or had been barred by the statute of limitations. The creditors could have reached the property of the corporation by legal and equitable process and I cannot imagine any reason why they should have slept upon their rights for 20 years. If the property was sold under proper legal process the purchasers acquired good titles. If the defendants, who were trustees, purchased the property (as is intimated in the bill) at a fair and open sale under legal process, and at the highest price that it would bring at auction, this transaction was neither fraudulent nor void. It may be that on account of their fiduciary relation to the corporation and the stockholders they might in a reasonable time have been declared trustees for the cestuis que trust. In such cases the cestuis qué trust must seek their relief in reasonable time, and we have already considered sufficiently the facts and circumstances of this case as to the reasonable diligence of the plaintiffs in seeking relief. Twin Lick Oil Co. v. Marbury, supra.
It appears in the bill that there were directors in 1861 when the corporation suspended business, and that they continued to act until 1862, and they were not discharged from their duties and responsibilities in any manner provided in the charter or the laws of the state of New York. As directors they were strict trustees of the creditors and stockholders, and it was their duty to have taken care of the corporate property under their control, and to have maintained the rights and consulted the advantages of their cestuis que trust by instituting proper legal proceedings to enable them to perform the duties of the trust with which they were invested.
The bill does not allege that the directors were requested to institute suit against the defendants, or that they had the trust funds, or were offered proper indemnity for such legal proceedings. the duty of the directors or trustees to have rendered proper accounts of their transactions, showing what disposition they had made of the property under their control.
When a direct trust is unclosed the statute of limitations does not protect trustees or their legal representatives from liability.
As the directors were strict trustees, and voluntarily accepted the trust, they could not divest themselves of the trust by a resignation unaccepted by the cestuis que trust, unless some other mothod was pro. vided in the charter or by the laws of the land.
The bill does not show when any of the directors died, or when or how any of them resigned office. If the trust of the directors was continued by a failure of the corporation to elect other directors as successors in office, then it may be that the directors who were living in 1878, when the corporation was dissolved by the expiration of its charter, became trustees of the rights and property of such corporation by virtue of the statute of New York. 1 Rev. St. $.9, p. 557.
The allegations in the bill are admitted by the defendants, so far as they are affected by such allegations; but such admissions do not dispose of the rights and responsibilities of the directors and their legal representatives, who are not parties.
It seems to me that the directors or their legal representatives ought to be made parties, so that they may have an opportunity of being heard, and have the whole subject matter in controversy so ad. justed and settled by a decree of this court as to free them from the duties and liabilities of future litigation.
I will not further consider or determine this question, as there are other sufficient causes for the dismission of the bill.
I will dismiss the bill on the following grounds:
(1) Want of certainty in allegation to show that the plaintiffs are entitled to the relief demanded.
(2) The right to relief has been barred by the statute of limitations.
(3) The long and gross negligence of the plaintiffs in seeking relief, unexplained by sufficient equitable reasons and circumstances.
It is ordered that the bill be dismissed, with costs.
WALKER and others v. COLBY WRINGER Co. and another.
(Circuit Court E. D. Wisconsin. October Term, 1882.)
1. EFFFCT OF WORDS " HEIRS," Erc., INSTEAD OF “SUCCESSORS," ETC., IN A
Execution levy was made upon certain lands to satisfy a judgment recovered in an action on a bond, with surety, taken upon the representations that one of the defendants was possessed of valuable land in her own right. The principal on the bond was a minor, and the judgment was against the surety alone. A suit was brought by the complainants herein asking for an injunction restraining the sale of the lands of which they claim to be the owners. In the deed to the land in dispute the defendant in the former suit appears as the grantee, named