Case ID: abb-pr_7/html/0041-01.html
Source: Caselaw Access Project
Author: {"author": "Comstock, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

NEW YORK & NEW HAVEN R. R. CO. a. SCHUYLER.
    
      Court of Appeals;
    
    
      June Term, 1858.
    Complaint.—Joinder of Actions and Parties.—Multifariodsness.—Corporation.
    Where there had been a fraudulent over-issue of the certificates of stock of a corporation, beyond the amount allowed by its charter, by the act of its transfer agent, and a part of such certificates were held by parties who took with knowledge of the fraud, and a part had passed into the hands of innocent purchasers, for value, and without notice, and for a part of the certificates which had been returned by the holders of new certificates, representing in part spurious and in part genuine stock, bad been regularly issued by the company,— Held, 1. That the corporation could maintain an action against all persona who claimed stock under the spurious issue, to have the certificates representing such issue declared void.
    2. That the complaint of the corporation joining all such parties as defendants was not multifarious.
    The mere joinder of too many defendents is not a ground of demurrer by any one of them against whom the complaint sets forth a good cause of action.
    Of the position of a corporation as a trustee for the corporators.
    Demurrer to complaint.
    This action was brought in the Supreme Court, First District, against three hundred and twenty-four defendants, for the purpose of settling the numerous claims which arose out of the extensive frauds committed by the* defendant Schuyler, the former president and transfer agent of the corporation, plaintiff, in over-issuing stock.
    The defendant Cross demurred to the complaint, and at a special term the demurrer was sustained. (See the decision reported, 1 Ante, 417.)
    In December, 1855, upon appeal to the general term (A. J. Parker, P. J., S. B. Strong and Dean, JJ.), the judgment was unanimously affirmed. The case was there submitted upon points, without argument, and no written opinion was delivered; hut the court were of opinion that the demurrer was well taken in regard to the misjoinder of causes of action and multifariousness.
    
      The plaintiffs appealed to the Court of Appeals.
    
      William Curtis Noyes, Nicholas Hill, and George Wood,
    
    for the appellants.
    —I. The plaintiffs as a company are trustees for all the holders of the stock legally entitled to be issued by the company, as well as for all stock which it is bound in law to recognize and adopt. (Charter Case, §§ 2, 3, 4, 5, 7, pp. 6, 7; Gray a. Portland Bank, 3 Mass., 365, per Sewall J.—per Sedgwick, J., 389 ; Scott a. De Peyster, 1 Ed. Ch. R., 513, 542; Robinson a. Smith, 3 Paige. 232: Catlin a. Eagle Bank, 6 Conn.. 233-4, 240, 243.)
    II. The complaint is sustainable as a bill of peace, being in the nature of- a bill quia timet, and to prevent unnecessary and wasteful litigation, which many of the defendants have commenced. (2 Story's Eq. Jur., §§ 952 to 961,825; Jeremy's Eq., 344; Story's Eq. Pl., §§272, 276-7, 278, 284-5-6,121-2, 315 ; Nicoll a. Trustees of Huntington, 1 Johns. Ch., 166; 8 Johns., 566, 584, 588, 601; Brinckerkoff a. Brown, infra; Fellows a. Fellows, infra; Allen a. Montgomery Rail Road Company, 11 Ala., 447.)
    III. The' complaint is sustainable as one filed by Trustees to settle and determine disputed and conflicting claims to a common fund, its stock ; in which all the parties to the suit have an interest, and which is in jeopardy by those claims—those of the defendants having one common origin, the fraud of Schuyler, upon which the claims of all depend. (1 Story's Eq. Juris., §§ 59, 60; City of New London a. Brainard, 22 Conn., 552; Hodges a. City of Buffalo, 2 Den., 110 ; Hill on Trustees, 543, and notes; Brinckerhoff a. Brown, 6 Johns. Ch., 139 ; Fellows a. Fellows, 4 Cow., 682.)
    
      IV. So, as a bill in the nature of a bill of interpleader, in which it is no objection that the plaintiff may have an interest in the subject of the controversy. (2 Story's Eq., § 800, &c.; Jeremy's Eq., 346 ; Bidwell a. Hoffman, 2 Paige, 199 ; Code, §167)
    
      
      Y. Every party interested in the subject of the controversy is before the court, and the rights of all can be determined in this action alone, and one judgment will settle every claim.
    VI. The defendants may all be joined, though they have separate interests in the shares claimed to be held by each, and may claim by separate titles, as they all derive their interests through the same transaction,—the fraud of Schuyler, and in the same common fund,—the company’s stock. (Curtis a. Tyler, 9 Paige, 432 ; Oliver a. Piatt, 3 How. (U.S), 333, 411 ; Smith a. Wormslett, 16 Ib., 312 ; Code, §§ 111, 113, 118, 119, 167; IIabicht a. Pemberton, 4 Sandf., 657.) They must all be parties for the purposes of an injunction, as none but a party to a suit can be enjoined. (Code, § 219 ; 1 Barb. Ch. Pr., 619.)
    VII. The complaint is not multifarious, as that consists in stating more than one good cause of action, which this complaint does not. It states one good cause of action against the various defendants, they having an interest in its one subject-matter in different amounts only. (Story's Eg. Pl., § 539 ; 1 Daniels' Oh. Pr., Perkins’ ed., 384, and notes; Curtis a. Tyler, supra ; Oliver a. Piatt, supra.) To make a bill multifarious, multifarious relief must be prayed. (Dick a. Dick, 1 Hogan, 290.) Ebr is it a valid objection that upon the trial all the fraudulent acts of Schuyler must be inquired into; as that must be the ' case if any one holder of the stock sues, in order to determine whether his stock is spurious or not.
    VIII. It is not a valid objection that some of the defendants may eventually succeed in establishing a defence, even upon its allegations alone, or by making themselves bona fide holders Of the spurious stock, assuming that that would constitute a defence. But that any defendant is such holder, is not to be presumed. To establish such a defence, a defendant must always set up the special grounds upon which it is founded, show the payment of the consideration, and even though notice is not averred in the complaint, must deny notice of every description in his answer. (2 Daniels' Pr., Perkins’ ed., 773, 776, 778 ; Acton a. Curzon, 3 P. Wms., 244, note f ; Bruce a. Duke of Marlborough, 2 Ib., 491, 6th res.)
    IS. The court below erred;—In assuming that the plaintiffs, as a corporation, are not acting in a fiduciary capacity for the genuine stockholders, and entitled in equity to relief on that ground.—In laying down as an inflexible rule that, because there may be different issues and distinct decrees as to different parties, there is a want of equity for multifariousness.—In not admitting the exercise of a discretion in regard to the special convenience in this case of a joinder of the parties defendants, arising from the peculiar situation of the property, and the necessity of settling the difficulty in one litigation.—In assuming that persons getting the spurious stock without notice of the defect therein, are entitled in equity to the protection of bona fide holders.—In assuming that the claim of the plaintiffs rested on the fraud of their own agent. Whereas the fraud was committed in excess of his authority, accompanied with gross irregularities and deviations, which the dealers with him in procuring the spurious stock ought to have guarded against.—In assuming that this issuing of spurious stock, and holding, asserting, and claiming it against this company, is not an injury to them relievable in eguity.—In supposing a suit should first be tried at law under the circumstances of this case.—And in supposing that every individual claim, under all circumstances, must, in equity, await the final disposal of the entire suit.
    
      Foster & Thompson and Francis B. Cutting, for the respondents.
    —I. The complaint alleges distinct causes of action against numerous parties, whose rights and liabilities are separate and several, and not joint, and it unites with them an alleged separate and distinct cause of action against the respondent. 1. The respondent had the right to institute an action against the railroad company, and is entitled to have it tried according to the usual course of proceedings in common-law actions. Each of the other defendants has a corresponding right. 2. The respondent, and each of the other defendants, have separate demands against the appellant, triable by jury. Constit., art. 1, §2.) If this complaint can be maintained, and relief be granted according to its prayer, each of them will be deprived of his right to a trial by jury. 3. The greatest inconvenience, delay, and expense will be occasioned, if the demurrer be overruled. Before the case can be in readiness to be heard, more than one hundred separate issues would have to be framed, by as many separate answers, each involving distinct facts and circumstances, and demanding the investigation of distinct issues: such as knowledge or notice on the part of the various defendants, fraud, usury, &c., &c. Yo defendant could bring his case to trial until it was at issue, and ready for trial as to all the other parties. The trial would involve the examination of more than one hundred different sets of witnesses, to be examined in open court, or under commissions; the interruptions to the progress of the action by the inevitably frequent occurrence of deaths among the host of defendants; by marriages of the female portion of them ; by the absence of witnesses material to any one of the issues, and by other incidents and accidents inseparable from an action so complicated and eccentric. If the case could ever be actually brought to a hearing, the enormous bulk of pleadings and evidence, the body of advocates, the separate corps of witnesses, each to be examined and cross-examined to the separate issues, and to the various inquiries necessary in order to settle the rights and equities of so many different defendants; the separate exceptions that would be taken by the different counsel to the rulings of the court on questions of law—would present a forensic prodigy of leviathan proportions. The trial would be most onerous in point of duration. After the case had been heard and submitted, it would involve the necessity of separate and distinct judgments for or against each defendant or firm, with distinct costs, executions, &c., &c.
    Each respondent would have the right to appeal, but such right could not be exerted until a final judgment in the court below had been rendered for or against all, each, and every.of the parties. Without further adverting to the complications, delays, and inconveniences that would necessarily be occasioned by sustaining the complaint, it is submitted that the demurrer is, for obvious reasons, well taken, and that the respondent ought to be left at liberty to litigate his demand in an action of his own, to be tried by a court and jury in the usual manner.
    II. The complaint does not state facts sufficient to constitute a cause of action against the respondent. 1. The certificates that he holds are alleged to be spurious and invalid; if so, there is no necessity for this action. 2. The action that he has commenced he had the right to institute and to try before a court and jury. The complaint alleges no ground sufficient to deprive him of this right. 8. Yo fraud or inequitable conduct is imputed to him, either individually or jointly with, or in concert with others.
    
      III. The plaintiff is not a trustee of the corporate property in trust for the holders of the shares .of stock legally issued or entitled to be issued within the true meaning of the term ; nor can the complaint be sustained as one filed by a trustee to settle and determine disputed and conflicting claims, to a common trust fund, and to obtain the aid and directions of the court as to its administration. 1. The corporation is not, in any just sense, to be treated as a trustee, or the shareholders as cestuis que trust. The latter are merged in the corporate body, which is a legal unit, and is the legal and equitable owner of all the corporate property. (2 How. U.S.R., 497, 555, 558, 586, 587 ; 13 Pet., 519.) 2. The case presents none of the incidents of a trust. A trustee can resign, or be removed, and another person appointed in his place. A corporation can neither resign nor be removed. A corporation can dispose of its property as it deems expedient, having the same power in that respect within the scope of its charter, as an individual. It may make an assignment, or create a trust, of the corporate assets, and it may become a cestui que trust, &c. The shareholders are competent witnesses for the corporation, and their admissions and declarations are not evidence against it. The capital stock is not a trust fund, held by the corporation as trustee, any more than the capital of a partnership, or the capital of a joint-stock company, is held by the firm or association as trustees. The right of stockholders to the equitable interposition of the court, against the fraudulent acts of its officers, does not in any manner warrant the proposition that the corporation is a trustee, or that it is entitled to the remedies of a trustee. (Robinson a. Smith, 3 Paige, 232; Scott a. Depeyster, 1 Edw., 513.) 3. There is no “ common trust fund” in dispute, which entitles the plaintiff to ask and obtain the advice and directions of the court as to its disposition. The complaint is not framed upon the principle of asking for the advice and directions of the court as to the disposition of a trust fund. The facts alleged do not make a case proper to be acted upon by the court, by way of advice or directions. Ro fund is submitted to the action of the court. The questions in dispute are whether the certificates, issued and reissued by the transfer agent of the plaintiff, are or can be of any validity, and whether those who have been damaged by the acts of Schuyler have any remedy against the plaintiff, by reason of the gross negligence, supineness, and inattention of its officers and directors, in consequence of which they failed to detect the frauds that the books at a glance would have disclosed. Neither the certificates nor the claims for damages constitute a common trust fund to be administered by the plaintiff. If this action can be maintained, it would follow that corporations have not only the right to sue in common with natural persons, but as trustees of a capital called a “ trust fund,” they have rights of action and remedies far beyond those of ordinary citizens. For example, if the victims of the frequent accidents that accompany the existence of steamboat and railway companies—such as that of the Nor-walk River disaster, that occurred on the plaintiffs’ road a few years since—should prosecute, or intend to prosecute for redress, the corporation may protect “ the common trust fund in (dispute]' by filing a complaint against all, and compelling each separate party to litigate, before a tribunal selected by the corporation, in an omnibus action.
    IY. The complaint cannot be sustained as a bill of peace, or as being in the nature of a bill quia timet, or to stay or to restrain the action that the respondent has brought, or that the other defendants may intend to commence. 1. The only respect in which the respondent can be said to stand in a common plight with the others, is, that the same agent of the company defrauded each of them. 2. The act by wdnch each of them was defrauded, was a separate and distinct act from that by which each of the others was defrauded. 3. The equitable jurisdiction of the court to set a limit to vexatious and oppressive litigation, does not rest upon the idea that convenience is promoted and litigation diminished by having one suit against a multitude of independent claimants. On the contrary, the making of numerous parties to a suit is recognized as a positive and insuperable impediment to its convenient prosecution. (1 Story's Eq. Jur., §§ 95, 120, 123 ; Story's Eq. Pl., §§ 100, 1OS ; Hallet a. Hallet, 2 Paige, 19 ; 1 Mylne & S, 200.) The number of fifty has been held sufficient to bring a case within the operation of this rule. (Manning a. Thesseyer, 1 Sim. & S., 106 ;
    . Story's Eq. Pl., § 105, note 1.) 4. There is no charge or allegation of any fraud on the part of the respondent, or of the other defendants, or of any concerted action between them; or of any misconduct on the part of any of them, affecting or implicating the respondent in any degree whatever. (1 Story’s Eq. Juris., § 285 ; 18 Ves., 71.)
    
    Y. The -complaint cannot he sustained as an interpleader, or as a bill in the nature of an interpleader. It has none of the substantial qualities of such a bill. 1. The plaintiff is not a stakeholder disclaiming interest in the controversy, but the litigant of the claims of the respondent, and of the other defendants, and the owner of the property which they seek to make liable for the satisfaction of their several and respective demands. 2. The parties stand, in all respects, as opponents. The plaintiff expressly denies that the respondent has any right or valid claim whatever as against it. 3. There are not two or more parties who claim the same thing or subject-matter in dispute. 4. There is no allegation that the plaintiff has no interest in the thing claimed, or in the matter in dispute, and the complaint makes no offer to bring it into court. It is framed upon the opposite principle. 5. The hill does not make the admitted holders of genuine stock parties, in order that they may be decreed to interplead with the holders of the alleged spurious certificates. 6. The respondent has brought his action against the plaintiff: the latter contests his right. How can such a subject be matter for an interpleader, or for any proceeding of that nature? (Atkinson a. Mark, 1 Cow., 691; Story’s Eq. Jur., § 807, note 2 ; § 803, note 3 ; §§ 816, 817, 821.)
    
      
      The pleadings were as follows :
      The complaint stated—1. The incorporation of the plaintiffs by the Legislature - of Connecticut; and set forth the charter in,full. 2. That the Legislature of the State of New York passed an act authorizing the extension of the road into that State, and that thereafter the Legislature of Connecticut passed an act reciting the same, and authorizing the plaintiffs to accept it. It then continued as follows :
      3. That all the said acts are still in force ; and that by the law of the State of Connecticut, the capital stock of the said company can neither be increased nor diminished, nor the shares thereof altered, diminished, or reduced, by a vote of the directors or stockholders of the said company, or by any action whatever of the said company ; and that any attempt so to do would subject the said company to the forfeiture of its charter and other disabilities, and the directors thereof to fine and imprisonment.
      4. That in pursuance of the said act of incorporation, the plaintiffs opened books to receive subscriptions to the capital stock of the company, and received subscriptions therefor to the amount of two millions and a half of dollars, and duly allotted the stock upon such subscriptions, in pursuance of the said act of incorporation, to the subscribers therefor ; and that, in pursuance of the power given by the act to increase the capital, the same was duly increased to three millions, and subscriptions therefor received, and the said increased stock allotted to the subscribers therefor, in pursuance of the said act, all of which original and increased stock was duly paid into the said company, amounting in the whole to three millions of dollars, being thirty thousand shares of one hundred dollars each, except seventy-eight shares thereof, upon ten of which only seven hundred and fifty dollars have been paid, and upon sixty-eight of which nothing has been paid; and that certificates in the ordinary form, signed by the transfer agent of the said company, and in the form hereinafter'mentioned, were duly issued and delivered to all the subscribers for the said stock, consisting of a large number of persons ; except, that no certificates have ever been issued for the said seventy-eight shares; that shortly after the organization of the said company, and while the said capital stock was being paid in, and in pursuance of the said act of incorporation, the board of directors of the company, at a regular meeting thereof, adopted certain rules and regulations in regard to the said capital stock and the certificates therefor, and the transfer thereof, of which the following are true copies :—[Copy of rules.] Which said rules and regulations have ever since been, and are still in full force and effect. And that, as the plaintiffs believe, all the stockholders of the said company, and all persons usually dealing in stocks in the city of Hew York, well knew that the said rules and regulations had been adopted, and were in force, and were acted upon by the said company.
      5. That the transfers of and the certificates for the stock of the said company, the latter of which were delivered to the different stockholders thereof, were filled up from printed blanks, with a blank power of attorney tq transfer usually annexed thereto ; that a large number of copies thereof were prepared by the said company, for the purpose of making and facilitating transfers of the said stock by the holders' thereof, which were left with the transfer agent of the said company, in its transfer office, in the city of Hew York, where one transfer office was established (two others being also established in the cities of Hew Haven and Boston), which Hew York office was under tire care of said transfer agent; and that the following is a copy of one of the said blank transfers of one of the said blank certificates, with the blank power of attorney annexed, being 'the same forms mentioned in the said rules and regulations so adopted as aforesaid, and which were invariably used in transferring the stock of the company, viz.:—[Copy of blanks.]
      6. That Eobert Schuyler, of the city of Hew York, immediately after the organization of the said company, was elected the president thereof, and was also appointed its transfer agent in the city of Hew York, both of which offices he accepted, and that he continued to discharge the duties of both said offices with the knowledge and approbation of its directors and stockholders, until about the third of July, eighteen hundred and fifty-four, when he resigned under the circumstances hereinafter mentioned ; but said resignation was not known to the board of directors till the 6th day of July, 1854.
      7. That since the said capital stock of three millions of dollars has been paid in as aforesaid, the said company has not been at any time the owners of, or entitled to any interest in the said stock, except the said seventy-eight shares not paid in, and in the said ten shares only part paid in, as above mentioned, but that the said capital stock, and every part thereof, except as last aforesaid, belonged exclusively to the respective stockholders of the said corporation, who owned the same, and who held the certificates thereof for the shares owned by them respectively ; and that the said company has not at any time proposed or offered to sell, or authorized any person to sell or offer to sell, the said sixty-eight shares, or the remaining part of the said ten shares, or to transfer the same, or to give or issue any certificates therefor, or to transfer any stock whatever for or on account of the said corporation, as owners thereof or otherwise, except that on the fourth day of May, 1853, a preamble and resolutions were passed by the directors of the said company, of which the following are copies :—[Copy of a resolution declaring 10 shares, and several rights to subscribe, to the amount of 68 shares, to be forfeited, and directing the president to sell them.]
      That the said Robert Schuyler, as president of the said company, or otherwise, never did sell, or offer, or attempt to sell the shares mentioned in the said preamble and resolutions, or any of them, or any interest therein ; nor did any officer or agent of the said company, or its board of directors, sell, or offer, or attempt to sell the same or any of them, or any right or interest therein ; nor were any certificate or certificates given, or attempted to be given therefor, or for any part thereof, but the said resolution remained, and now remains wholly unexecuted and unperformed in every particular.
      8. That immediately after the incorporation of the said company, the location and construction of the railroad therein authorized was commenced and continued ; and, under the act of the Legislature of the State of New York above-mentioned, the said road was continued to the said New York and Harlem Railroad, near Williams Bridge; and that the whole line of said road from New Haven to the said Harlem road was completed by the said company and has been completed upwards of four years last past; and that since that time the exclusive business of said company has been that of running and operating the said road for the conveyance of passengers and freight, and of maintaining and keeping the said road in good order and repair, and in constructing the necessary depots and warehouses necessary in operating the road ; and that the said company has not been engaged in any other business whatever, and has not been trafficking or dealing in any way in its own stock, or in any stocks or property whatever.
      9. That at the time of the appointment of the said Robert Schuyler as such president of the company and as transfer agent of its stock, he was known to be, and was by the directors and stockholders of the said company and by the public generally believed to be, a fit and proper person to fill and discharge the duties of both those offices ; and that, up to the time of his resignation, he had continued to maintain such character.
      10. That on the third day of July, eighteen hundred and fifty-four, the said Robert Schuyler sent to one of the directors of the said company a letter,' which was not received by him until the succeeding day, of which the following is a true copy :—[Copy of letter tendering resignation of directorship, presidency, and transfer agency, and calling attention to the stock ledger as containing much that is wrong.”]
      11. That the said letter contained the first intimation received by any one of the said directors, or by any other person, to the knowledge or belief of the plaintiffs, that the said Robert Schuyler had been guilty of any improper, wrongful, or fraudulent conduct or practice, either as president of the said company, or as the transfer agent of its stock ; and that the confession of such wrongful and fraudulent practice by himself not only astonished the directors and stockholders, but the entire community ; that, immediately thereafter, the said Robert Schuyler absconded from the. city and State of Hew York, and fled to parts unknown ; and that, although very diligent efforts have been made by the company and the officers of justice, under due process of law, to find and arrest him for the misdemeanors and crimes hereinafter stated to have been committed- by him, they have hitherto been wholly unsuccessful, and the plaintiffs do not know, and have no means of ascertaining, his present residence.
      12. That immediately upon, the reception of the said letter, the directors of the sajd company, and the other officers thereof, commenced a careful and diligent examination of the stock ledger and transfer books of the said company, kept by the said Robert Schuyler as such transfer agent; and from such examination, and by other means—such as an examination of certificates of stock of the said company, and powers of attorney to transfer connected therewith, made out by the said Robert Schuyler, and purporting to be the stock of the said company,—they have ascertained that, as early as the month of October, eighteen hundred and fifty-three, the said Robert Schuyler, for the purpose of raising money for his own private purposes, and for the use of the firm of Robert and George L. Schuyler,' of which he was a member, having such blank certificates of stock in his possession, in order to transfer the existing valid shares in the stock of the company, at the request of, and for the owners thereof, when the prior certificates that had been issued therefor should be surrendered, falsely made, forged, and counterfeited, or caused and procured to be forged and counterfeited, and then made an illegal and fraudulent issue of certificates to his said firm of Robert and George L. Schuyler, or to other persons, for his and their individual and private use, signed by himself as transfer agent, purporting to represent shares in the stock of the said company in various amounts, all which was done by him without the knowledge, assent, or authority of the board of directors, or any members of it, and without the surrender to him, as transfer agent or otherwise, or to the said company, of any prior certificates of the stock of the said company, which certificates were in the same form as the genuine certificates ; that these certificates, thus fraudulently and illegally made by him from about the 18th of October, 1853, until about the 29th day of June, 1854, and now outstanding, amounted, as near as the plaintiffs can ascertain, to 13,286 shares, and that there are in addition outstanding certificates in the name of his said firm of Robert and George L. Schuyler, amounting to 1648 shares, and in the name of Richard Schell & Co., who were the agents or brokers of the said Robert Schuyler, or of his said firm, to the amount of 160 shares, the stock which these last certificates to his firm, and to Richard Schell & Co., originally represented, having been ostensibly transferred to them without surrendering the original certificates, and the persons thus holding those certificates having no stock to their credit on the books of the company ; that in some instances the said Robert Schuyler had feloniously taken and stolen from the papers of the company certificates of stock, which had been surrendered, and the stock represented by them transferred, without cancelling the said old certificates, and had reissued them without the knowledge or consent of the company, or its board of directors; that sometimes, instead of issuing such false certificates, the said Robert Schuyler would permit or allow a certain clerk or clerks of his said firm of R. & G. L. Schuyler, who were not in the employment of or paid by the said company, to erase true entries, and to make false and fraudulent entries upon the stock ledger of the said company, unknown to them and the directors thereof, whereby his said firm, and the said Robert Schuyler, as transfer agent, were credited with stock to the amount of 81,000,000, and as having a lawful right to transfer the same, when there was no stock to -his or their credit, or belonging to him or them, and when they had no right to make the same ; that the certificates thus fraudulently and illegally made and issued, and fraudulently reissued, and the said false and unauthorized transfers were used by the said Robert Schuyler in his own private business or in that of the firm, representing them to be genuine certificates and valid transfers, chiefly by borrowing money upon them, and pledging them and the stock purporting to be represented thereby, as collateral security, but for what amounts, and to whom in particular they were originally pledged, and under what circumstances, the plaintiffs have not been able to ascertain ; and pray that all the circumstances thereof may be set forth by the defendants in this action ; that none of the transactions by the said Robert Schuyler in these fraudulent and illegal certificates, purporting to represent shares of the stock in the company, nor any transfers thereof on the books of the company, were really or ostensibly for the benefit of the company, or on its account, or in any of its business or transactions ; nor did they purport to be issues of stock then emanating from the company, but as stock belonging to the said Robert and George L. Schuyler, and to be issued and transferred exclusively by them ; and they purported to be and were exclusively for the private benefit of the said Robert Schuyler, or his said firm, in their own personal or private dealings, which was well known to each and every of the person and persons who received the same ; that in disposing of the same for his said private and personal use, and that of his said firm, the said Robert Schuyler did not act, or profess to act, as the president or transfer agent of tlie company, or on its account, but simply for himself or his said firm, as the owners of the shares purporting to he represented by the said false, reissued, and illegal certificates ; that each of the said certificates was for a large number of shares, and those which he issued in the name of his said firm were generally delivered with blank powers of attorney to transfer the stock, signed by the said Robert Schuyler in the name of his said firm, without being actually transferred, or entered in any manner upon the hooks of the company, and that the persons so receiving the same from him or his said firm, in many instances neglected to have the same entered or transferred on the hooks, although the said Robert Schuyler, having the exclusive charge of the said books, in some cases fraudulently permitted the same to be transferred thereon, and probably would have permitted it in all cases, if he had been requested so to do ; that 9383 shares, purporting to be represented by the said illegal and fraudulent certificates, now stand upon the books of the company, kept by the said Robert Schuyler, in the names of parties to whom they were immediately transferred by his said firm ; and that many of the shares originally represented by like certificates to the said firm, have been transferred to various other persons, who now hold and claim the same ; and that ail the holders of the said illegal and fraudulent certificates claim to be lawful stockholders of the said company, or that they have a legal and valid claim against the said company for the value of the said stock as genuine stock, or for the amounts which they respectively advanced to the said Robert Schuyler, or to his said firm, or to the other persons from whom they received the same, on account of the stock purporting to have been represented by the said certificates.
      13. That many of the persons holding, or claiming to hold, the said false and illegal certificates and transfers, and the stock purporting to he represented thereby, have never caused the same, or any thing in regard thereto, to be registered or entered upon or in any of the books of the plaintiffs, kept in their office or otherwise, by the treasurer, secretary, clerk, or any other officer thereof, or in any other manner ; and that the plaintiffs are informed and believe, and therefore state, that by the laws of the State of Connecticut, binding upon the plaintiffs, and all persons holding, or claiming to hold or own, such certificates and transfers, and the stock purported to be represented thereby, no transfer, conveyance, or assignment of any such certificates or shares can be or is valid against any other person than the grantors thereof, or their representatives, because the same was not so registered and entered ; and that by reason thereof the said certificates and transfers conferred no right or title whatever thereto, or to the said stock or shares, upon the persons so holding the same, or any of them, as against the plaintiffs.
      14. That the following is a statement of the names of the several persons who claim to hold the said 9,383 shares represented by the said illegal and fraudulent certificates as above mentioned, received directly from the said firm of R. & G. L. Schuyler, with the number of shares claimed by each ; hut the plaintiffs are ignorant of the particular circumstances upon which they received the certificates representing them, and pray that the same may he fully set forth by the respective holders thereof, with the time, place, person from whom, and the consideration thereof, and all the details thereof respectively :—[List of names and number of shares.]
      15. That the following is a statement of the names of the several persons who claim to hold, or have some interest in, the shares represented by the said illegal and fraudulent certificates issued and reissued by the said Robert Schuyler, and in the said false arid illegal transfers, with the number of shares held by each, including also those mentioned in the fifteenth paragraph of this complaint; but the particular circumstances under which they received the same are unknown to the plaintiffs, and they pray that they may be fully set forth by the persons respectively holding the same, with the time, place, person from whom, and the consideration upon which they were received respectively, viz. :—[List of names and number of shares.]
      That many of the persons named in the two last paragraphs were, at the times they respectively received the said false and fraudulent certificates, and the said false and illegal transfers, genuine stockholders of the said company, and entitled to enjoy and exercise all their rights and privileges as such, and to examine the transfer and stock books of the said company.
      16. That from about the twenty-ninth day of June, until the said third of July, 1854, the said Robert Schuyler was detained from the office, and hindered from transacting any business as such transfer agent by illness, and that during his said absence, William E. Worthen, a director and vice-president of the said company, without any authority from the said company, or from the board of directors, or any one authorized to confer the same, and without any right to act as such, assumed to act as transfer agent in the place of the said Robert Schuyler, and that thus acting as such during that period, he reissued certificates purporting to be certificates of stock in the said company, at the request, and in behalf of various persons who desired him so to do, and who assumed to own stock which they could transfer, with his own name as transfer agent, in the form of the certificates herein before set out, to the amount of four thousand four hundred and forty-six shares in all; which said certificates were all based upon some of the false or fraudulent certificates so issued or reissued by the said Robert Schuyler, or upon the stock so falsely and fraudulently represented thereby, or by the said false and fraudulent transfers, and claimed to belong to him or his said firm, or to some person or persons to whom they had professed or attempted to transfer the same, and not upon any genuine stock of the said company, or upon any certificates or transfers representing the lawful stock thereof; that the said William E. Worthen, when he so reissued the said certificates, was wholly ignorant of the illegal and fraudulent acts of the said Robert Schuyler in issuing the first certificates, and making and permitting such illegal transfers, and supposed the certificates so reissued by him, to be based upon the real stock of the said company, but knew he was acting without authority ; and that the plaintiffs are advised, and believe that the acts of the said William E. Worthen, in signing the said certificates, and all the acts connected therewith, were wholly unauthorized and void; that they are not binding upon the said company for any purpose, and create no legal obligation against them, and that the said certificates and transfers should be set aside and delivered up to be cancelled. That the said last-mentioned certificates have never been adopted by the said company, and that the following is a true statement of the said certificates, of their numbers, and the amounts for which they were respectively issued, and of the persons to whom they were issued, viz:—[List of certificates signed by W. E. Worthen as transfer agent. Neither this nor the preceding lists contained the name of the demur-rant, Cross.]
      That the plaintiffs are ignorant of the particular circumstances under which the said certificates were received and issued, and pray that the same may be fully set forth by the persons so receiving the same, with the time, place, person from whom they were so received, and the consideration, and all the details thereof.
      17. That the plaintiffs are informed, and have reason to and do believe, and therefore state, that many of the persons who received the said false, reissued, and fraudulent certificates, and the said illegal transfers from the said Robert Schuyler and from his said firm, and from the said William E. Worthen, and from other persons to whom they had delivered or attempted to transfer them, knew or had reason to believe that the said certificates and transfers were not valid or genuine, and that they did not represent any of the real stock of said company, and were made and issued without any authority of law ; and that they received the same upon some illegal,, corrupt, or usurious contract or transaction with the said Robert Schuyler or his said firm, and that by reason thereof, they are not, and are not entitled to he regarded as, bom fide holders or purchasers of the said certificates and transfers, or any of them, or of the stock purporting to be represented thereby, as against the said company or otherwise.
      18. That the plaintiffs being advised by their counsel, that they had no authority to admit or recognize any of the said illegal certificates and transfers as representing the stock of the said company, and being also so instructed at a meeting of the stockholders of the company duly convened for the’ purpose of considering the question as to the said fraudulent issues and transfers, have declined to recognize the said illegal and fraudulent certificates, and the said false and illegal transfers, as representing genuine stock of-the said company, and the holders thereof as stockholders of the said company, and have also declined to recognize the said stock as genuine stock of the said company for any purpose, and ever since the discovery of the frauds so committed by the said Robert ’ Schuyler, have declined to acknowledge the said certificates, transfers, and stock, or any of them, or to sanction by any act of theirs any transfer thereof, or to issue new certificates therefor; and have also declined to recognize the said certificates and transfers, and the acts of the said Robert Schuyler and the said William E. Worthen in making and issuing the same, as creating any valid claim or obligation against, or imposing any duty upon, the said company of any kind whatever.
      19. That John H. Dykers, one of the holders of the said illegal and fraudulent certificates, dated June 20, 1854, for one hundred and fifty shares, has brought an action, in the nature of and as a suit at law, against the plaintiffs in the Superior Court of the city of Hew York, claiming to recover damages to the amount of $13,000, because, as he alleges, the plaintiffs refused to permit him to transfer the same on the books of the company as genuine stock ; that an answer has been interposed to the said action setting up the invalidity of the said certificates for the reasons above mentioned, and the same is now at issue and ready for trial. That Cornelius Vanderbilt, another holder of such illegal, stolen, fraudulent certificates, so made and issued by the said Bobert Schuyler, to the amount of 2320 shares, issued to him by the said Bobert Schuyler for his own use, or that of his firm, has also commenced another action, in the nature of a suit at law, against the plaintiffs in the same court, claiming to recover against them the sum of $232,000 with interest, because, as he alleges, the plaintiffs have refused to permit the same to be transferred on the books of the company as genuine stock ; that no answer has yet been put in to the complaint in the last-mentioned action, the time to answer not having expired, but the plaintiffs intend to answer and contest their liability in the said action. That A. Morton Ferris and "Warren Ferris, the holders of 21 other shares represented by the said false and fraudulent certificates, have also commenced an action in the Supreme Court of this State, in the first district, claiming to recover against the plaintiffs the sum of $2100 and interest, because, as they allege, the plaintiffs refuse to permit the same to be transferred on the books of the company as genuine stock ; that no complaint has been served in that action, but the plaintiffs intend to answer and contest their liability therein. That August Belmont has also commenced an action, in the nature of a suit at law, against the plaintiffs, in the Superior Court of the city of Hew York, claiming to recover damages against them to the amount of upwards of $85,500, because, as he alleges, the plaintiffs refused to permit the said August Belmont to transfer on the books of the said company eight hundred and-five shares of stock represented b) certificates so fraudulently issued by the said Bobert Schuyler ; that said last-mentioned action was commenced on the fourteenth day of Hovember, 1854, and an answer has been put in by these plaintiffs denying their liability in said action, and contesting the same. That the President, Directors, and Company of the Mechanics’ Bank of the city of Hew York, have also commenced two similar actions in the same Superior Court, on similar grounds, as the holders of 435 shares of the stock represented by said false and illegal certificates ; which actions are now at issue and in readiness for trial. That Alexander Dennistoun, John Dennistoun, William Wood, William Cross, and Benjamin F. Dawson, have also commenced another action against the said company, in the Hew York Common Pleas, claiming to recover the sum of $200,000, for their alleged refusal to transfer a larger number of the shares of stock represented by the said false and illegal certificates and transfers; that the said action is not at issue, but the plaintiffs intend to defend the same as herein before stated. That in each of the said actions, except the last three, attachments have been issued against the plaintiffs, and all their real and personal property in the city of Hew York, including its rolling stock, and the means of operating the road, levied upon and seized under the said attachments by the sheriff of the city ancl county of Hew York, and are now held upon said attachments by him.
      20. That the plaintiffs are informed and believe, that it is the intention of other holders of the said false and fraudulent transfers of stock and certificates of stock to commence other actions against the plaintiffs for refusing to transfer the said stock so purporting to be represented by the said false and fraudulent certificates as genuine stock; that said actions will be very numerous, and, as the plaintiffs believe, exceeding one hundred, and will subject the plaintiffs, and the parties to those actions respectively, to great and unnecessary expense, trouble, and litigation ; and that such actions, if commenced, and especially if they are followed up by attachments, will greatly injure and damage the interests of the plaintiffs, and the interests of the genuine stockholders of the said company, and its creditors and other persons interested in its stock, effects, and earnings ; that the plaintiffs’ are advised and believe that the rights of all the said holders of the said false and fraudulent certificates, and of said fraudulent transfers, may be determined and adjusted in one action, without prejudice to the rights of any of them, and so as greatly to promote the convenience and advance the interests of all persons interested in the said company, whether as holders of the genuine stock thereof, or of the said illegal and fraudulent certificates and transfers.
      21. That the owners and holders of the genuine stock of the said company consist of more than one thousand persons residing in the States of Hew York, Connecticut, Massachusetts, and elsewhere, and that they cannot conveniently be made parties to this action, and that if they are made parties, great delay must take place, and large expenses be incurred before they can be brought in and be properly made defendants.
      22. That the plaintiffs, not being the owners of or interested in any of the stock of the company, except the seventy-eight shares hereinbefore mentioned, and being mere trustees or managers of the said three millions of genuine stock of - the said company, beyond which amount the -same cannot be lawfully increased, are not authorized or empowered, as they are advised and believe, to acknowledge or recognize. any of the said false and fraudulent certificates of stock, or any of said transfers as stock, or as constituting any claim against the company, without an adjudication by some court of competent jurisdiction requiring them so to do, and that under the circumstances they cannot make any dividends to genuine stockholders, nor can they with safety or accuracy determine who are entitled to vote at the elections for directors of the said company ; nor can they open the transfer books of the said company as they are desirous of doing; and that this action is commenced for the purpose of impleading all the said holders and claimants under the said illegal and fraudulent certificates and transfers, in order that the duties and obligations of the plaintiffs, and the rights and claims of the holders of the said certificates may be settled in one suit, and to the end that a multiplicity of actions and the delay, expense, and litigation attendant thereon may be avoided.
      
        23. The plaintiffs further say that, as they are informed and believe, and therefore state, the said firm of B. & G. L. Schuyler, on or about the third day of July, 1854, made an assignment of all its property and effects for the benefit of creditors, to Bichard H. Blatchford, George B. J. Bowdoin, and Samuel L. M. Barlow, of the city of New York, among which property and effects was included some alleged stock of the plaintiffs’ company, represented by the said false and illegal certificates and transfers, and that they claim as such assignees an interest therein as such ; and that upon like information and belief they say that the said Bobert Schuyler and George L. Schuyler, separately, and about the same time, made individual assignments of their property and effects to the said George B. J. Bowdoin and Samuel L. M. Barlow, among which was in like manner included some of the said alleged stock represented by the said false and illegal certificates and transfers, and that each of said assignees, as such, claims some right or interest in the said false and illegal certificates and transfers, and the stock represented thereby.
      The plaintiffs therefore pray judgment against all the defendants who are holders or owners of the said illegal, fraudulent, stolen, and forged certificates of stock and transfers of stock, that the said certificates and transfers, and each of them, were and are wholly illegal and void as against the plaintiffs and the genuine stockholders of the said company, and that the same do not represent any stock of the said company, or entitle the said holders to any rights as stockholders, and that they do not constitute, either alone or in connection with the acts of the said Bobert Schuyler and William E. Worthen, in creating, transferring, or issuing the same, any claim or obligation against the company, or impose any duty or obligation on the said company in respect thereto; and that said holders and owners thereof may be decreed to deliver up the same to the company to be cancelled, and that until the determination of this action, the said holders and each of them may be enjoined and restrained from bringing any suit, action, or bill in equity, against the plaintiffs, for and on account of the said certificates, or any of them, or of the stock purported to be represented thereby, or of the act of the said Bobert Schuyler in creating or issuing the same, and that the above defendants, John H. Dykers, Cornelius Vanderbilt, A. Morton Ferris, Warren Ferris, August Belmont, The President, Directors, and Company of the Mechanics’ Bank in the city of New York, Alexander Dennistoun, John Dennistoun, William Wood, William Cross, and Benjamin F. Dawson, and each of them, may be enjoined and restrained from -prosecuting their said actions against the plaintiffs, and that those actions may be consolidated and tried with this action, that the defendants herein may pay the costs of this action, and that the plaintiffs may have such other relief as may be agreeable to equity.
      Notes, Powers & Talemadge, Plaintiffs’ Alt'ys.
      
      Wi. Curtis Notes, George Wood, of Counsel.
      
      The Demurrer specified among other grounds the following, which are the only ones involved in the questions discussed:
      
        1. That it appears hy said complaint that this defendant is in another action a party antagonistic to the said plaintiffs, that said other action was brought for the same cause, and is now pending.
      2. That the stockholders of the New York and New Haven Railroad Company, the said plaintiffs, are not joined in this action, either as plaintiffs or defendants.
      3. That many persons are joined as defendants herein, against whom no cause of action is alleged in the complaint.
      
        4. That no cause of action whatever is alleged in the complaint against this defendant, nor is he charged therein as the holder of any of the certificates of stock or transfers therein described.
      5. That the following causes of action are united in the said complaint, namely :—1. The alleged illegal and fraudulent act of Robert Schuyler, as affecting the rights and interests of this defendant. 2. The alleged illegal and fraudulent acts of Robert Schuyler, as affecting the rights and interests of the several other defendants respectively. 3. The alleged illegal acts of William E. Worthen, as affecting the interests of this defendant. 4. The alleged illegal acts of William E. Worthen, as affecting the interests of the several other defendants respectively. 5. The alleged illegal acts of the several other defendants respectively.
      6. That the said several causes of action do not all belong to any one of the classes enumerated in section 167 of the Code of Procedure.
      7. That the said several causes of action do not affect all the parties to this action.
      8. That the said several causes of action are not separately stated.
      9. That the said several causes of action have been improperly united.
      10. That it appears by the said complaint that many persons have been charged together therein as parties defendants, whose rights and interests are separate, and several are not joint or united, and that the causes of action charged therein against the said several defendants respectively, are so charged as arising out of many and various circumstances, each relating to some one of said defendants individually, and not relating to the other defendants, thus leading to multifariousness of pleadings, multifariousness of issues, and many several and separate judgments.
      17. That it does not appear in said complaint, that this defendant has never caused certificates of stock of said plaintiffs held hy him to be registered or entered upon the hooks of the said plaintiffs, kept in their office by the treasurer, secretary, clerk, or some other officer thereof.
      18. That it does not appear in said complaint, under what circumstances this defendant received any certificates representing the shares of stock of the said plaintiffs complained of in the complaint.
      19. That it does not appear in the said complaint that this defendant at the time he received any certificates or transfers complained of in the complaint, was a genuine stockholder in the said company, or entitled to enjoy or exercise any right or privileges as such, or to examine the transfer or stock hooks of said company.
      23. That the said complaint does not state facts sufficient to constitute a cause of action.
      Foster & Thompson, Attorneys for Defendant Cross.
      
    
   Comstock, J.

—This case is somewhat special and extraordinary in its circumstances, and must be determined upon principles of reason and justice, with the aid of such analogies as the law will afford.

It is well settled that the directors or managers of a corporation are trustees for the holders of its stock. It is on this ground that the shareholders are entitled to relief in equity against an actual or threatened waste or misapplication of i,ts corporate bonds. It seems also to be settled that a suit for that purpose must be brought in the name of the corporation, unless it appears that the directors refuse to prosecute, or are themselves the guilty parties answerable for the wrong. If they do thus refuse, or are thus answerable, the shareholders may sue in their own names; but in such a case, the corporation must be made a defendant, either solely or jointly with the directors sought to be charged. (Robertson a. Smith, 3 Paige, 222, and cases there cited.) I have nowhere seen it laid down that the corporation itself, considered as a pure legal abstraction, is a trustee for its stockholders; yet it is not difficult to see that certain trust relations exist between it and them. A corporation aggregate is clothed with a legal title to its real and personal estate, franchises, and privileges, while the shareholders, as individuals, have in them equitable interests, the interest of each being in proportion to the amount of stock which he holds. The corporation is entitled to receive, and does receive, the gross amount of the earnings—upon a trust, however, or at least under a duty to pay over to the stockholders the net profits, as dividends upon their stock. If not under all circumstances bound to make and pay over in money the dividends earned, it must, at all events, use them for the shareholders’ benefit, in the prosecution of its legitimate enterprises, and subject to ultimate accountability. If these relations are not precisely defined in the books, it is because the occasion has not arisen requiring this to be done.

The Hew York and Hew Haven Railroad Company is a corporation aggregate, invested by its charter with certain privileges and powers, and with a legal title to all the real and personal estate acquired in the construction and operation of its road. Its genuine and undoubted stock amounts to $3,000,000, and by its charter cannot exceed that amount. All their stock (with an exception of no importance to the question before us) has been paid for, and is held by shareholders, whose rights as such are -not called in question. But, in addition to the $3,000,000, of undoubted stock, Hr. Schuyler, the president of the company, issued at different times, for his own private purposes, fraudulent and spurious certificates of stock, to the amount of nearly $2,000,000, which are now held by the numerous parties against whom this suit has been instituted. The president was the duly authorized agent to superintend the transfer of stock from any existing shareholder to another party, with authority in all cases to issue a new certificate, upon a transfer of the stock it represented being duly made in the books, and upon the surrender of the old one. The spurious certificates before mentioned were not based upon any transfer of genuine stock, in any sense whatever. In their appearance, however, they were genuine, and duly authorized. In form they were like those which represented the real stock of the company, and they were signed by a person who was known to have authority to sign under the conditions above named. Thus they obtained more or less currency throughout the community, being taken by various parties without attending to the forms and conditions prescribed by the charter and by-laws of the company, regulating the transfer of stock.

This extraordinary fraud could not fail to place the corporation in a situation of extreme difficulty and embarrassment. What was to be done with the spurious stock certificates ? Were the holders to be recognized? Were they to share in the dividends, and were they entitled to vote at elections? Was the stock of the company practically increased to $5,000,000, when the charter confined it to $3,000,000 ? If this could not be done, then was the company bound to pay in damages to each holder of these false instruments the value which the genuine stock had borne in the market ? These were grave questions, about which gentlemen of great eminence in their profession, and the court also, differed.

In the courts of original jurisdiction, it was determined (after the institution of this suit) that the corporation were in some form bound to make good the false certificates. On appeal to this court, we held them void to all intents and purposes, and that the corporation and its genuine stockholders were entirely unaffected by them. (Mechanics’ Bank a. The New York and New Haven Railroad Company, 3 Kern., 599.)

Such was the situation of this company on the discovery of these acts of Mr. Schuyler. As a pure creation of law, the corporation was not a sentient being; but the law, nevertheless, clothed it with authority which enabled it to act by its board of directors, as a natural person, within the sphere of its powers and duties. It had therefore the rights which a natural person would have in analogous situations; and in order to evolve the principle of this controversy, we may suppose that a natural person is clothed with the legal title to, and is in possession of, an extensive line of railroad, receiving the gross earnings for the purpose of dividing the net profits among a large class of individuals, whose right, in certain fixed proportions, is evidenced by a certificate, or declaration of trust, which each one holds, signed by the legal owner or his authorized agent. If, then, a new class of individuals should come forward claiming the same rights, and presenting, as the evidence thereof, instruments of the same kind in all respects, bearing on their face all the appearances of genuineness and authority, but in fact unauthorized and spurious, what would be the rights and the duty of the legal owner in that exigency ? Upon the settled principles of equity, it would be his right and his duty to call the false claimants into court, in order to remove the cloud upon the equitable interests of those whom he represented. It would be his right, as owner of the legal estate, to bring to a determination every claim upon that estate, in law or equity, resting upon facts and documents giving to it, prima facie, all the appearances of genuineness and validity. It would be his duty to call for such a determination, as the representative of numerous equitable interests carved out of his estate and placed under his protection. These are principles so familiar and elementary, that citations from the books are not required to support them.

With the aid of these analogies, we can come to a conclusion as to the rights of this corporation in the exigency which had arisen at the commencement of their suit. It stood, as we have seen, in a quasi trust relation to its shareholders,—holding, as it did, the legal estate, and they having, as individuals, an equitable right in the net earnings or income of the same estate. They also had the right to vote at the elections of the company, to the exclusion of all other persons. If the corporation yielded these rights to the holders of its original and genuine stock, and rejected the claims of those who held the false certificates, it became at once exposed, not merely to one, but to a multiplicity of suits, involving, as we have seen, questions of no inconsiderable difficulty. In these circumstances, its right of resort to a court of equity, in order to have the spurious certificates can-celled and annulled, does not admit of a doubt, provided those instruments were such in character and appearance as to bring them within the principles on which courts of equity administer protective and preventive justice. There is no head of equity jurisdiction more firmly established, than that which embraces the cancellation of instruments which are capable of a vexatious use after the means of defence at law may become impaired or lost, or when they are calculated to throw a cloud upon the title or interest of the party seeking relief. But the jurisdiction does not universally attach on the mere ground that the deed or other contract is invalid.. If the invalidity plainly appears on the face of the writing, so that no lapse of time or change of circumstances can weaken the means of defence, it is held that no occasion arises for a suit in equity to decree its cancellation. And the doctrine now is, that such an instrument does not, in a just sense, even cast a cloud upon the title or interest, or diminish the security of the party against whom the' attempt may be made to use them. If, on the other hand, the invalidity does not then appear on the face, the jurisdiction is not confined to instruments of any particular kind or class. Whatever their character, if they are capable of being used as a means of vexation and annoyance, if they throw a cloud upon title or disturb the tranquil enjoyment of property, then it is against conscience and equity that they should be kept outstanding, and they ought to be cancelled. These principles of general jurisprudence are believed to be decisive in favor of the right of this corporation to demand the cancellation of the false stock, and to maintain a suit in equity for that purpose. .On their face, as we have seen, the certificates of this stock are undistinguishable from those which *are genuine and true. They confer, therefore, upon each holder a prima faoie right as a stockholder. The evidence of such right must in every case be repelled by showing that the certificate does not represent the actual stock of the company; and it is impossible to say that the means of repelling these claims will always be as perfect as they were when the frauds in which they originated were first discovered.

It is true, we held, -in the case already mentioned, that the company could successfully defend an action it has brought against them for refusing to recognize one of these certificates; but the defence rested, as it must, if actions were to be brought upon every other certificate, upon the intrinsic facts to be proved. Conceding, even, that every one of these claims may be defended, at whatever distance of time and under whatever circumstances they may be pressed upon the corporation, this by no means meets the' equity of the case. If, as we have held, no just claim against the corporation arises out of these certificates, it is plainly unconscientious and inequitable that they should be kept on foot. Their very existence, outstanding, is unjust, be cause it must of necessity exercise a most depressing influence upon the real stock of the corporation.

We all know how sensitive are values in property of their description ; and what conceivable facts could cast a deeper shadow over their genuine shareholders’ interest than a spurious issue of $2,000,000 of stock, evidenced by certificates apparently valid, and under which every holder boldly and confidently asserted his claim ? The fact is not alleged in the complaint, but we can scarcely err in supposing, that on the discovery of these bonds every share of valid stock must at once have lost nearly one half of its market value. That depression must continue, in a greater or less degree, while the certificates are allowed to stand. A decision against one of them, in an action founded upon it, is not a determination against any other one, and cannot, while the others are outstanding, restore to the genuine stock the value which justly belongs to it. To say that the shareholders must remain in such a condition of insecurity and doubt, and must hold their shares under such a depression, would be to sanction a species of injustice which ought to be prevented Mere shares of stock are a description of property as much entitled to invoke the protective remedies peculiar to courts of equity as any other.

In applying these remedies to any other kind of property thus clouded and depressed by a written instrument professing to be, and on its face actually being, an incumbrance upon it, no doubt, it seems to me, would arise; and I think there is no well-founded doubt in the present case. And besides these considerations which affect the interests of the individual, whose legal identity in their controversy is lost in the corporate body representing - them, we are to regard also the serious embarrassment which cannot fail to attend the internal administration of the affairs of the corporation itself. When this large addition of false stock became known, under which the holders confidently claimed to be shareholders, how could the corporation intelligently and safely proceed to regulate its elections and divide its earnings 1 These were difficulties which nothing short of a judicial determination against the spurious issue, and cancelling the false certificates, could effectually remove.

One of the views presented on the argument in support of the complaint was,- that the corporation, as a trustee of the property and funds under its control, was entitled in that character to ask the advice and -direction of a court of équity in regard to its obligations and duties in the circumstances which had occurred. Without having particularly examined this theory, I very much doubt whether it can be maintained. I have already spoken of the relations between the corporate body and its shareholders as having some analogy to those between trustees and cesttds que trust; but those relations are nevertheless sui generis, and they point to the corporation rather as the proper representative of its genuine stockholders, in a controversy of this kind, than as a trustee entitled for its own sake to ask the advice of the court as to the mode of discharging its functions. When a trustee invokes the interference of equity on such a ground, he does it for his own protection; and the interests of the beneficiary are not of themselves an element of the jurisdiction. But it is difficult to separate, even in abstract contemplation, the rights and interests of a corporation from those of the shareholders. If the cor-j>oration exceeds its powers, or misappropriates its funds, the stockholder may complain, or if the evil be only threatened, he may arrest it by injunction; but, if the controversy is with third parties, the interests of the corporate body and of the individuals who compose it are so nearly identical, that a separation in theory or practice would seem to be impossible.

For this reason there is a great difficulty in sustaining the present suit as one brought by a trustee to be advised and directed in regard to the proper line of duty towards the cestuis que trust, and those who claim to stand in that relation. But the same reason unerringly indicates the corporation as the organ through which the shareholders are to be heard, when legal wrongs are to be redressed or equitable remedies are to be invoked. If, therefore, I have been successful in showing that the fraudulent certificates of stock are instruments of such annoyance and vexation, in depressing values and disturbing the fair enjoyment of rights, that they ought not to be allowed to stand, then this suit by the corporation rests firmly upon that branch of equity jurisdiction which includes the cancellation of such instruments.

The views which have been taken assume the invalidity of all the certificates fraudulently issued by Schuyler. Upon the facts stated in the complaint, which the demurrer admits to be true, and upon the principles laid down in the case of the Mechanics’ Bank against this Company (supra), it is impossible to say that any one of them is a valid representative of stock, or a claim of any kind against the corporation. It appears, indeed, that most of the certificates have passed into the hands of third parties, and the decision of the court below assumes that those parties, in good faith, paid for or advanced value upon the shares. On that ground, it was further assumed that their rights were superior to those of the corporation and the holders of its actual and genuine stock. This is a view of the question which holds a prominent place among the reasons given for dismissing the complaint. But since the court below pronounced its judgment, the other case mentioned came before us on appeal, and the contrary doctrine was very precisely determined, and upon the fullest consideration.

Adhering as we do to that decision, and looking at the case as the complaint states it, all the certificates in question must share the same fate; and the present case will not be embarrassed by any necessity of rendering different judgments in respect to different parties.

In saying this much, however, it is not designed to prejudge the right of any person in special circumstances to be defensively alleged and proved, differing in their character from any yet called to our attention.

The only remaining question is one of multifariousness in respect to parties or causes of action. The mere joinder of too many persons as defendants, when there is no misjoinder of subject, is not a ground of demurrer by any one of them, against whom the complaint sets forth a good cause of suit. A demurrer may be interposed for a defect of parties, but not for the reason merely that too many are brought in. (Code of 1852, § 144.)

In respect to the joinder of causes of action, the provision of law, so far as material to the question, now is, that “ the plaintiff may unite in the same complaint several causes of action, whether they be such as have heretofore been denominated legal, or equitable, or both, where they all arise out of the same transaction, or transactions connected with the same subject of the action.” (Code of 1855, § 167.) The authors of the Code, in framing this and most of its other provisions, appear to have had some remote knowledge of what the previous law had been. This provision, as it now stands, was introduced in the amendment of 1852, because the successive Codes of 1848, 1849, and 1851, with characteristic perspicacity, had in effect abrogated equity jurisdiction in many important cases, by failing to provide for amnion of subjects and parties in one suit indispensable to its exercise. This amendment, therefore, was not designed to introduce any novelty in pleading or practice. Its language is, I trust, well chosen for the purpose intended, because it is so obscure and so general as to justify the interpretations which shall be found most convenient and best calculated to promote the ends of justice. It is certainly impossible to extract from a provision so loose, and yet so comprehensive, any rules less liberal than those which have long prevailed in courts of equity.

It is only necessary, therefore, to determine whether, in a suit instituted for the purpose of cancelling the invalid certificates of stock in the plaintiffs’ corporation, all the claims under these instruments can be united, and all the parties holding them brought in, without rendering the suit obnoxious to the charge of multifariousness, as that term has hitherto been understood. The convenience of settling the whole controversy in a single suit is obvious, because the only alternative is, that the corporation would be entitled to institute, and must institute, a separate action against each of the numerous parties claiming under these certificates. Ho one of the parties would be bound by a decision against any other one; and intolerable expense and delay might be the consequence of such a course.

The rule on this subject has been often considered, both in England and this country, and has become tolerably' well settled, although in regard to some of its applications there is a diversity in the adjudged cases. In the case of the Mayor of York a. Pilkington (1 Atk., 283), decided by Lord Hardwicke in 1737, the corporation of York claimed an exclusive right of fishery in the river Ouse for a large tract; and the bill was filed against various persons claiming several and distinct rights in the same fishery, in order to quiet the plaintiffs’ title, and also for a discovery and account of the fish the defendant had taken. A demurrer to the bill for multifariousness was overruled after being twice argued, the lord-chancellor observing: “ It was no objection that the defendants have separate defences; but the question,” he added, “ was whether the plaintiffs have a general right to the sole fishery, which extends to all the defendants.” ¡Nearly a century later, Lord Eldon referred to this case as standing on the ground, that “ where the plaintiffs stated themselves to have an exclusive right, it signified nothing what particular rights might be set up against them, because, if they prevailed, the rights of no other person could stand.” And he added: “ It has long been settled that if any person has a common right against a great many of the king’s subjects, inasmuch as he cannot contend against all of the king’s subjects, a court-of equity will permit him to file a bill against some of them, taking care to bring in so many persons before the court that their interests shall be such as to lead to a fair and honest support of the public interests.” (Jac. & Walk., 369.) In Whaley a. Dawson (2 Schoales & L., 370), Lord Redesdale considered the test to be whether there was a “ general right in the plaintiff covering the whole case, although the rights of the defendants may have been distinct.” In referring to the Mayor of York a. Pilkington, and analogous cases, he observed: “The court has gone upon the ground of preventing multiplicity of suits, one general right being claimed by the plaintiffs against all the defendants.” The same eminent authority, in the treatise on Equity Pleading (Mitford, Eq. Pl. by Jeremy, 181), says: “ The court will not permit a plaintiff to demand by one bill several matters of different natures against several defendants; but when one general right is claimed by the bill, though the defendants have separate and distinct rights, a demurrer will not hold.”

The subject of multifariousness is very elaborately and carefully examined by Mr. Justice Story, in his treatise on Equity Pleading. Adopting the views, and in part the language, of Lord Cottenham in Campbell v. Mackay (1 Mylne & C., 623, 624), he lays down the following doctrine : “ The result of the principles to be extracted from the cases on this subject seems to be, that where there is a common liability and a common interest,— a common liability in the defendants and a common interest in the plaintiffs,—different claims to property, at least if the subjects are such as may without inconvenience be joined, may be united in one and the same suit.” (§ 533.)

He adds: “ Indeed, where the interests of the plaintiffs are the same, although the. defendants may not have a coextensive common interest, but their interests may be derived under different instruments, if the general objects of the bill will be promoted by their being united i/n a single suit, the court will not hesitate to sustain the bill against all of themP In this State, the joinder in one suit, of causes of action in some sense distinct from each other, with all the necessary parties for their determination, has always-been allowed with great liberality, where the convenience and the ends of justice have required it. In Brinckerhoff a. Brown et dl. (6 Johns. Ch. R., 139), it was held that different judgment creditors might unite in one bill for the purpose of reaching the estate of their common debtor, which he had fraudulently conveyed; and 'that the bill might be filed against persons relative to matters of the. same nature, forming a connected series of acts, all intended to defraud and injure the plaintiffs, and in which all the defendants were more or less concerned, though not jointly in each act. In the case of Fellows a. Fellows (4 Cow., 682), the bill charged that the several defendants, in combination with each other, and with the debtor of the plaintiffs, took from him separate conveyances of bis property without consideration, and in order to defraud the plaintiffs. One of the defendants answered, denying the combination, and demurred to the residue of the bill, because it included distinct matters, in many of which he was not concerned. The demurrer was overruled, the chancellor observing: “ If instead of one matter in demand, here are three (the three conveyances in question), they are all of the same nature, in respect to the questions they now present. Each of the three defendants holds a portion of the .property of John Fellows (the debtor) by a fraud, and by a fraud of the same kind. The right of the complainants is against the whole property, and their right against all portions of it is of one nature. The claims of the three defendants, now holding the property in question, are of one character, each of them holding under a fraudulent transfer. .... This, therefore, is not a case of several matters of distinct natures in the sense of the rule upon that subject.”

The decision was appealed from to the Court for the Correction of Errors, and was there unanimously affirmed, after a very full discussion by counsel, and elaborate consideration in the opinions of several members of the court.

Many other cases might be mentioned, exhibiting varieties in the application of the general rule declared in thosé which have been cited. But it is unnecessary to refer to them. The rule itself is settled too firmly to be shaken, and it would seem to be decisive of the present question. In this case, there is a single interest in the plaintiffs directly opposed to the interests of all the defendants. The common point and centre of the litigation is the stock, property, and franchises of the plaintiffs’ corporation, in which the defendants claim specific shares ánd proportions as holders of the false certificates.

The rights claimed by the defendants are distinct, because they rest upon separate instruments as the evidence thereof; but they are of precisely the same nature, they turn upon the same question, and they are a cloud upon the same estate. Each certificate is a false muniment of the holder’s title to a particular interest,—the corporate estate, vested as a unit in the corporation, but equitably belonging to the holder of its actual stock.

Among the grounds of the argument in behalf of the plaintiffs, it was insisted that the suit is maintainable on the principle of a bill of peace, a suit to quiet a title and prevent a multiplicity of actions. A suit in equity to establish a sole right of fishery against several hostile claimants, or by a parish priest to establish a right, whether against the parishioners, or by the parishioners to establish a modus, is an example of a bill of this kind. It will be found, however, that there is nothing in the rules which govern the technical bill of peace, to justify a misjoinder of subjects or parties in the litigation.

But the number of parties and the multiplicity of actual or threatened suits, will sometimes justify a resort to a court of equity-when the subject is not at all of an equitable character, and there is no other element of equity jurisdiction. Even in such cases there must be such a unity of interest, on one side or the other, as to bring the litigation within the ordinary rules of equity pleading. This suit, I think, could be sustained on a bill of peace, but the question of misjoinder would be the same. Without reverting to the principles of such a bill, we sustain the jurisdiction, on the ground that the controversy is. of an equitable nature, for the reasons which we have given at large; and we hold that the objection for multifariousness merely, is untenable within ordinary and established rules on that subject.

If all the invalid certificates were now held by one person, the jurisdiction would attach in order to have them cancelled, and the suit would be against him alone. Being held by various parties, the jurisdiction still depends on the same principles; but all the parties can be united, because there is such a unity in the controversy with all of them as to render it fit and proper, according to settled principles, that they should be joined in a single suit.

The judgment of the Supreme Court must be reversed, and judgment entered overruling the demurrer, with the usual leave to answer.