Smith v. Trenton Delaware Falls Co.

The Chancellor.

Tire first ground of demurrer to the bill in this suit, is the want of proper parties.

It has been found difficult to gather from the authority of cases decided, a rule on the subject of parties, concise, yet sufficiently comprehensive to meet every case.

In Wiser v. Blachly, 1 John. C. R. 438, chancellor Kent observed that “ the general rule is, that you must have before the court, all parties whose interests the decree may touch, because they are concerned to resist the demand, and to prevent the fund from being exhausted by collusion.”

This rule is well sustained by the authority of the English books, and accords with the rule of Calvert in his treatise on Parties in Equity, page 11: “All persons having an interest in the object of the suit ought to be made parties.”

This rule, although general, is not universal, but has its exceptions, in cases of creditors, or legatees of personal estate, whose interest is supposed to be defended by the personal representative: 1 Vesey, 105, 137; 1 Brown C. R. 303; and where parties are so numerous as would cause great ineovenience in bringing them in, or where one files a bill on behalf of himself and others.

If we apply this rule to the present ease, it is manifest that the representatives of the deceased mortgagees, being interested in the object of the suit, should have been made parties.

The right to sue or defend, does not rest alone in the surviving obligee. An action at law is required to be brought in the name of the survivor of several obligees, or against the survivor of several obligors, because the parties must sue or be sued in the same right; but this is not the rule in equity, and consequently the fact of the obligation being joint,, does not answer the objection.

*509 The decree in favor of Andrew Carrigan, against the company, is made a subject of complaint in the bill, and although its correction is not directly asked, yet it would seem to be indirectly sought, and if so, the interest of Carrigan may be affected, and he should have been a party.

The bill charges that the receivers of the company are so interested, that they are incompetent to determine the matters which may be brought in question before them.

This is not in terms an effort to remove them, but if the prayer of the bill is granted, they must be relieved of a considerable portion of their present duties, and pro tanto removed. Under such circumstances, it is manifestly right that they should be heard, and for that purpose made parties.

The demurrer, so far as relates to want of parties, must prevail.

It is said in the next place by the demurrants, that the complainant may have all the remedy he is entitled to, under the bill filed by Carrigan.

So far as relates to the relief specially prayed, he clearly may.

1st. As to the discovery sought.

By the act of sixteenth of February, eighteen hundred and twenty-nine, (Elmer’s Dig. 35, sec. 10,) it is made lawful for the receivers, in order to enable them to ascertain and secure the property and effects of the company, to send for persons and papers, and to examine the said persons, and the president, directors, managers, cashier and all the officers and agents of the company, on oath or affirmation, respecting the affairs and' transactions of the said company, and the estate, money, goods, chattels, credits, notes, bills, dioses in action, real and personal estate and effects of every kind, of said company, on pain of imprisonment for refusing to be sworn or affirmed and to answer.

Under this act, the receivers have due authority to compel any person to disclose any knowledge he may possess, respecting-the affairs and transactions of the company; and the complainant, on proper application to the receivers, could have had such *510 disclosure. The receivers represent as well the creditors as the stockholders of the company, and the complainant, as a creditor, was a party to the bill of Carrigan, which was filed on behalf of all the creditors.

2d. As to the priorities of the incumbrances. The receivers have the authority, and it is their duty to settle them; and in case of dissatisfaction, an appeal to the chancellor is expressly given: Elmer’s Dig. 36, sec. 16, 18.

In settling priorities, they must inquire into the validity of the several claims, and refuse to allow any they may believe to be fraudulent or illegal.

3d. And so may they also inquire into the validity of all the_ transfers made by the company, and should they find any of the property or choses in action of the company illegally transferred, they may with propriety, and should claim such as assets for the benefit of the creditors and stockholders.

But the complainant, by his counsel, insists that he is entitled to be relieved against two several acts of the legislature, which he alleges to be contrary to the constitution of the United States, and illegal and void.

I have not been able to see how the constitutionality off those acts can be called in question before the receivers, nor upon an appeal, from, or exceptions to their determination, before this court, or in any way under Garrigan’s bill, unless it be on a question of appropriation of the funds of the company by the receivers. If so, and the complainant’s bill is properly framed^ he may have any relief to which he is entitled under the general prayer. The correct rule I take to be that laid down by judge Story in his Equity Pleadings, 39, (pl. 40.), “The court may afford him the relief to which the party has a right, under the prayer of general relief, provided it is such relief as is agreeable to the case made by the bill.”

In English et al. v. Foxal, 2 Pet. R. 612, Mr. justice Thompson said, “There is no doubt but that, under the general prayer, other relief may be granted than that which is particularly *511 prayed for, but such relief must be agreeable to the case made by the bill.”

But the court will not in all cases be so indulgent as to permit a bill framed for one purpose to answer another,' particularly if the defendant may he surprized or prejudiced: Mitford on Pl. 31.

The allegations of the bill in reference to those acts are so vague and indefinite, that a party defendant could scarcely anticipate that the complainant was seeking to have them declared void.

As to the first act, it is merely alleged that this court, under and by virtue of an act passed the eleventh of March, eighteen hundred and forty-two, (setting forth its title,) made a decree on the seventh of November, eighteen hundred and forty-three, which said act he charges to be contrary to the constitution of the United States, and therefore illegal and void.

What decree is here alluded to, and how it affects the case, we are left to surmise, and wherein the act is contrary to the constitution we are not told.

As to the other, it is alleged, that after the said decree of sale, and after the receivers had advertised all the chartered rights, &c. of the company,’ the legislature, on the fifteenth of February, eighteen hundred and forty-four, passed another act, (giving its title,) authorizing the receivers to sell those chartered rights, &c. free and clear of all mortgages, judgments, liens and incumbrances; which said act is charged to be contrary to the constitution of the United States, and in violation of the rights of the complainant as a judgment creditor, and illegal and void.

What relief the complainant could be entitled to, under such an allegation, and what he might seek at the bar of the court under the general prayer of the bill, it is not easy to discover; and if the act last mentioned were to be declared void, I have not been able to see how the complainant would be benefited thereby.

The demurrer to the bill I conceive to. have been well taken, *512 and it must be sustained. The complainant, however, has leave to amend, upon; payment of costs. If he prefers not to amend the bill, it must stand dismissed, with costs.