Case Name: Jonas H. Titus v. The Minnesota Mining Company
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1860-05-22
Citations: 8 Mich. 183
Docket Number: 
Parties: Jonas H. Titus v. The Minnesota Mining Company.
Judges: Campbell J., did not sit, having been counsel for one of ’ the parties.
Reporter: Michigan Reports
Volume: 8
Pages: 183–260

Head Matter:
Jonas H. Titus v. The Minnesota Mining Company.
Complainant, as president and agent of the Baltimore Mining Company, made a written agreement to sell to II. and his associates the location of the Baltimore Co.; they to pay therefor $4,500, and to deliver]to him “proper certificates of one - fifth the entire interest in said location, and in the capital stock of a company to be formed for mining thereon to bo forever unassessable, and to be delivered to the shareholders” of the Baltimore Company. To this was attached an undertaking on the part of H. and his associates to take stock in the proposed now company, according to the tenor of this agreement. The $4,500 was paid, and complainant transferred the location to II. who gave back an undertaking, that on the formation of the proposed new company, on such location, one-fifth of its stock should bo issued to the president of the Baltimore Company, ‘‘ to be endorsed by 7dm and delmered to tJie shareJiolders” of that company. A now company, the Yulcan, was formed as contemplated by this arrangement, to which II. conveyed the Baltimore location; and the association, in their articles, state their object to be the prosecution of mining operations, on the location obtained from the Baltimore Company, “or on omy other lands that man/ be leased, located or bought by the association for mining purposes! The stock for the shareholders of the Baltimore Company was not delivered. Complainant afterwards, in his own name, but claiming to bo trustee of such shareholders, filed a bill in Chancery, alleging that the Yulcan Company had purchased another location in the name of H., and in order to defraud him and the shareholders of the Baltimore Company of their rights under the agreement, the shareholders of tho Yulcan had formed a now Company — the Minnesota, since incorporated — to which II. had conveyed, such now location; that tho Yulcan Company was now to all practical purposes dissolved and dead, and tho Minnesota fraudulently and collusively substituted in its place, and tho latter is now in fact and in truth the Yulcan— and praying that it might bo decreed to deliver to complainant, as president of the Baltimore Company, for the use thereof, one-fifth of its stock; and for an account.
It seems that the contract on the part of H. and his associates, was not with complainant as trustee of the Baltimore Company, but with the company acting through him as its agent; and that the company was a necessary party complainant to the bill.
It seems, also, that tho supplementary agreement given by H. to complainant is of no binding force, there being no proof that the associates of II. authorised any modification of the first agreement, and the authority of tlie Baltimore Company to complainant, to make sale of tlioir location, not conferring upon him. power to make partition or distribution of the proceeds of the sale.
The Yulcan Company being still in existence, and the owner of the location purchased of the Baltimore, it is not and can not be identical with the Minnesota, and it should be defendant in tho suit.
The insertion in the articles of the Yulcan Company of a clause looking to tho X>rosecution of mining operations on other lands than those purchased of the Baltimore, could not enlarge the rights of the Baltimore Company under the agreement, nor place the Yulcan under obligation to purchase other lands for such operations. It was without consideration from the Baltimore, and that company was not a party to it. The Yulcan Company might strike out that clause without giving the Baltimore any right to complain.
There was no fraud upon tlio Baltimore Company, or upon' complainant, in tlio members of tlie Yulcan Company purchasing a new location, and forming a new company to work it, to the exclusion of complainant.
Nor does proof showing that U. bought the location now occupied by the Minnesota, stating at the time that ho bought it for the Yulcan Company, and that the agent of that Company, without its authority, worked for a time upon it, re-> presenting it to have been bought by that company, and that the Yulcan Company declined lo take it, and its members formed a new company with the express design of excluding the Baltimore Company from the benefits its shareholders would have derived from its being purchased by the Yulcan, make out any case of fraud upon the Baltimore Company, since it does not deprive it or its shareholders of any right intended to be given, or which it or they had a right to demand, under the original agreement.
Heard November 15th, 16th, 17th and 18th, 1859.
Decided May 22d.
Appeal by complainant from the Wayne Circuit in chancery.
The testimony in the case was voluminous, filling a large volume, and except whore it consisted of written documents, to a considerable extent contradictory. No attempt will be made to give here even an abstract of it, or a statement of its general result; and reference must be had to the opinions for the impressions left by it on the minds of the several judges. The following, however, which is in some measure copied from the clear and succinct statement of facts embraced in the opinion of 1-Ion. Sanford M. Gkeen, the Circuit Judge who decided the case in the court below, is believed to embrace such leading facts as are necessary to be stated in order to an understanding of the legal questions.
Some time in the year 1845, the Baltimore Mining Company, consisting of the complainant and ten others, was organized for the purposé of mining copper and other ores in the Upper Peninsula of Michigan, as a joint stock company. Its capital, stock was divided into 8,000 shares. Upon the first organization of the company, the complainant was elected its president, which office he has ever since continued to hold.
In 1846, that company held leases issued by the War Department of the United States, numbered 26'7 and 269, covering each one square mile, in the mineral district of the Upper Peninsula.
On or about the 21st day of November, 1846, the complainant, as president and agent of the said company, duly authorized for that purpose, .sold and transferred the said two leases to William Hickok, or to William Hickok & Co., of the city of New York, as the basis upon which a new company was to be formed for mining purposes.
The agreement for such sale on the part of the complainant was in the following words :
“Memorandum of an agreement by and between Jonas H. Titus, of the city of Betroit, as president of the Baltimore Mining Company, and Hickok & Co., of the city of New York, viz:
“First: Jonas H. Titus, as president and duly authorized agent of the Baltimore Mining Company, agrees to sell to Hickok & Co. and their associates, the two western locations of said Baltimore Company, held by leases 267 and 269 from the War Department, and fully described therein.
“Second: Hickok & Co. and their associates agree to pay the sum of four thousand five hundred dollars on the proper assignment and transfer to them and their associates, or to the trustees of a company formed by them, of the leases 267 and 269 above referred to.
“Third: Also to deliver to said Jonas H. Titus proper certificates of one-fifth of the entire interest in and to said locations, and the capital stock of a company formed for mining thereon, to be forever unassessable, and to be delivered to the shareholders of the Baltimore Mining Company.
“Fourth: A company for mining purposes shall be formed in the city of New York on the basis of these locations, of which the capital stock shall be divided into shares as hereafter named, each subscriber paying an assessment of one and fifty-one hundredths dollars per share, at the time of each subscription, for the aforesaid sum of purchase.
“Fifth: When all the stock shall have been taken up, there shall be a meeting of the subscribers, at which each share shall he entitled to one vote; and articles of association shall be prepared and signed by all the subscribers of stock, embracing the following subjects among its fundamental provisions, to wit:
“(A) There shall be four thousand shares, of which one thousand shall be forever unassessable, and eight hundred of these shall belong to the shareholders of the Baltimore Mining Company, and two hundred to the new company; the remaining three thousand to be subscribed for, and the assessment paid as aforesaid.
“(B.) There shall be one president, one treasurer, and three trustees, who, together, shall constitute a board of directors, who may appoint their secretary, and manage the affairs of the company.
“J. H. Titus,
“President and agent of the Baltimore Mining Co.
“New York, Nov. 21st, 1846.”
To this agreement was attached the following:
“We, whose names are hereunto signed, do hereby subscribe for the number of shares affixed to our several names, on the consideration and according to the full tenor and meaning of the foregoing agreement.
Nov. 21st.
Names. Residence. Shares.
ÍIlCKOK & Co. New York 1600
Wm. Pearsall, Jr. “ 300
Daniel A. Galloway, “ 300
J. T. Gilbert, “ 100
Horatio N. Davis, “ 100
Smith & Lambert, “ 200
C. Edgar Smith, 100
J. H. Titus, Detroit. 100
Jacob H. Stoever, New York 100
E. Birdsall, 100
3000
TJnassessable, 1000
Shares, 4000”
Titus, in pursuance of the arrangement contemplated by Ms agreement, assigned and transferred the leases to Wm, Hickok, and the latter executed the following instrument, which was delivered to the complainant:
“As a part of the consideration for the sale and transfer of leases 267 and 269 of mineral lands, by the Baltimore Mining Company to William Hickok, I do hereby agree and promise that, on the formation of a mining company on said leased lands, 800 shares of nnassessable stock shall be issued to the president of the Baltimore Mining Company, to be endorsed by him, and distributed among the share' holders of the Baltimore Mining Company pro rata to their number of shares; said unassessable shares to be numbered from one to eight hundred, both inclusive; said new company to be organized and the stock issued within sixty days from date.
New York, Nov. 23d, 1846, Monday evening, 10 o’cl’k.
War. Hickok, assignee of leases.”
The $4,500 was paid to complainant, and, as contemplated, a new company was formed by Hickok and his associates (including all who signed the undertaking attached to the Titus agreement except Titus and Stoever) by articles of association bearing date November 30, 1846, under the name of “Vulcan Mining Company.” The stock was by these articles divided into 4000 shares, 1000 to be unassessable, 200 of which should be the property of the company when sold, and 800 to “be allotted and transferred to the Baltimore Mining Company.” And they declare their purposes to be the prosecution of mining operations on the tracts or parcels of land so purchased, or on any other lands in said mineral district that might be leased, located, or bought by the association for mining purposes.
Wm. Hickok was the treasurer and one of the largest shareholders of the Vulcan Company, and from its first or. ganization appears to have been the most active and influential of its directors.
In the spring of 1847, Samuel O. Knapp was appointed local agent of the Vulcan Company, and with a small number of men went upon these locations, and made explorations and examinations for mineral until the autumn of that year, without success; the entire amount found during the season being only a few pounds.
From such examination, and a more intimate acquaintance with their geological formation, Knapp became satisfied that there was no prospect of finding upon either of these tracts copper or other mineral in sufficient quantity to warrant any further outlay of money in seeking it there. His examinations below the surface, in various places, revealed the fact that these locations were not underlaid wdth the copper - bearing trap rock, but with a species of sand stone, in connection with which that mineral is not likely to be found in abundance.
While engaged here, in July, 184/, Knapp received from Hickok instructions to go and make an examination of the Algonquin Mine, which was some sixteen or eighteen miles distant from the Vulcan locations. He went there and made his examination, and on his way back followed the trap range which led him across the Ontonagon location, numbered 98. He saw where the Ontonagon Co. had been at work, and paid considerable attention to the character of the rock and the vein stone there, and became satisfied the location was a valuable one for mining purposes.
George C. Bates was a director and acting agent for the Ontonagon Co. in the city, of Detroit. In September, 184/, Knapp started.from the mining region, for New Y.ork, and on his way, called at Detroit on Mr. Bates, and learned from him that the whole or part of location 98 was offered to be sold, and that negotiations were pending with a third party for the transfer of it, and that, if such negotiations should fail, it might be purchased by other parties. On his arrival in New York in the latter part of September^ he had an interview with Hickok, and informed him of his poor success in mining, &c., and on the 20th of that month a special meeting of the Vulcan Company was held, which Knapp attended. At that meeting he exhibited to the stockholders what copper he had found, as the result of his operations for that season, and gave an account of the discouraging prospects of their adventure in mining. He also informed them of his examinations and inquiries in regard to location 98, and expressed to them his confident belief that it was a valuable one, and advised them to purchase it if practicable.
At that meeting, after a discussion of their affairs, it was resolved,
First: That the company should continue their mining operations during the ensuing winter, under the direction and superintendence of Mr. Knapp.
Second: That Mr. Knapp be requested to furnish the trustees forthwith an estimate of the probable expense of prosecuting the said operations until the first of June then next; and
Third: That Mr. Knapp be instructed to make inquiries at Detroit and elsewhere, on his return, as to the possibility of purchasing the whole or a portion of the Ontonagon Company’s location, and to communicate to the company as soon as possible such information as he might be able to obtain upon the subject.
With respect to the proceedings and discussions of the members at this meeting, and the authority intended to be conferred upon Knapp as to the purchase of the Ontonagon location, the testimony of the members was contradictory ; Galloway’s testimony going to show that Knapp was expected to make the purchase, and Hiekok, Barry, and others, testifying that decided opposition was expressed to the purchase being made, for several reasons; and among others, because complainant and the Baltimore Co. were to be benefited by it. Barry says:
“ Mr. Hiekok was in favor of an immediate purchase, if possible, and advocated giving full power to Mr. Knapp to make the same at once on behalf of the Company. This proposition was strongly opposed by several of the other members present, particularly Pearsall, C. E. Smith, and myself; one of the grounds of our opposition was, that if the Vulcan Co. made such purchase, the Baltimore Co. would have an interest therein, without contributing a cent of the purchase - money, or being liable to assessment for carrying on mining operations; that we had already been subjected to great loss by investment in the Vulcan Co. on the misrepresentations of Titus, and were under no obligations to purchase another location and spend more money for his -benefit. Bor myself, I was opposed to it for the additional reason, that I could not afford to lose more money, and was afraid to risk - any further investment in an enterprise which appeared to be so very uncertain in its results. Mr. Hickok evinced com siderable feeling because his views were not favored by. the meeting, and, in order to conciliate him, I suggested that time should be allowed to think and talk the matter over; that I had no objections that Mr. Knapp, on his return to Detroit, might be instructed to make inquiries, and ascertain whether the purchase of No. 98, or a part of it, could be made, and report to the company, by which time we should probably be better prepared to act definitely on the subject: I, therefore, by way of compromise, offered a resolution to that effect, which, after some opposition and much discussion, was finally adopted unanimously by the meeting. This was the only authority ever given to Mr. Knapp by the Vulcan Co., to the best of my know% ledge and belief, touching the question.”
The following letter was put in evidence by complainant, and refers to the contemplated purchase:
“New York, Sept. 21, lSé1!.
"Eriend Titus,
Dear Sir: — Your favor by our friend Mr. Knapp Was handed us in due time. We were much pleased with your assistance to Mr. Knapp in negotiating draft. We take the liberty of asking a similar favor again. We have some §800 to raise for Mr. K. to proceed with his work this coming winter.
So far, Mr. K. has not been able to strike a vein, but we have not lost our confidence in that or the Baltimore location; and if Mr. K. should suspend operations' temporarily on the Vulcan locations, it will be because he thinks veins already exposed can be purchased at less expense than he can find one on our location.
Mr. K. has a kind of a carte blanche, to operate as he deems will best serve the interests of the stockholders.
In regard to the location spoken of, we have left the matter with Mr. Knapp, if possible, to make his negotiations in Detroit. We should like very much to see the Baltimore and the Vulcan Co. on them hard at work.
If it can be purchased, we shall see that there is a smelting furnace put úp there next summer.
We have, and so have the‘Vulcan Co., the fullest confidence in Mr. Knapp’s operations; and if he can strike a rich vein, he will put the company inferior to none on the mineral region.
We shall prohably write you early as day after to-morrow. We have some further favors to ask of you — to see if you can purchase certain stocks in your market, which we will name hereafter.
Yours, Truly,
IIickok & Co.”
On the day of the date of this letter, a meeting was held, of which the following is the record on the books of the company.
“At a meeting of the trustees of Vulcan Mining Co., held this day at the office of Messrs. IIickok & Co. — present Messrs. Hickok, Pearsall,'Smith, and Barry.
Mr. Pearsall was called to the chair, and Mr. Barry appointed secretary, pro tem.
Mr. Knapp having presented the estimate of expenses required for prosecuting the ojxerations of the company until the first of June next (in accordance with a vote of the company to that effect passed at a special meeting held on the 20th ultimo), on motion, resolved,
1. That the trustees proceed forthwith to call in the balance due on the last assessment authorized by the company, being twenty-eight (28) cents per share.
• 2. That the following sums, comprising the aforesaid estimate furnished by Mr. Knapp, be, and are hereby, appropriated for the purposes named therein, and that the treasurer be authorized to disburse them accordingly as soon as required — amounting in all to eight hundred and five 58-100ths dollars, viz.:
For outfit and supplies for 6 men to 1st
June next, ..... $242 58
Wages due to men, .... 263 00
Mr. Knapp on acct., . . . . 100 00
' Mr. Knapp, for expenses of freight and transportation, and contingencies, to be accounted for by him, . . . 200 00
—¡- $805 58
The meeting then adjourned.”
Knapp, after this meeting, returned to Detroit, having first had, according to his testimony and that of Hickok, conversation with Hickok aboxxt the opposition manifested on the part of the Vulcan Co., to making the purchase of location 98, in which Hickok expressed himself very anxious that the purchase should be made by the Vulcan Company, and confident that, if Knapp could make a favorable bargain with Bates for the purchase of the whole or a portion of the Ontonagon Compaxry’s location, the Vulcan Company woxxld accept it. Hickok, therefore, instructed Knapp to make such a contract for the purchase, if possible, and send it to him at New York, assui-ing Knapp that he would attend to having the business closed up there, while Knapp should go on up the lake and prosecute his mining operations. Accordingly, Knapp proceeded to Detroit and entered into a contract with Bates, assuming to act as agent of the Yulcan Mining Company, for one half of location 98, at the sum or price of $1,600, to be paid by the company, and sent it by mail to Hickok.
In the negociations attending the making of this contract, Knapp appears to have had the assistance of complainant, and to have consulted with Mr. Conger, a member of the Baltimore Company.
After making this contract, Knapp purchased supplies and provisions in Detroit for the miners, and went up to take possession of the new location in behalf of the Vulcan Company. On his arrival at the Saut lie found that there would probably be difficulty in getting possession, and under the advice of Mr. Harvey, and Col. McNair, the mineral agent of the United States, he returned to New York in order to have the purchase fully consummated and closed up with the company, so that proceedings might be had, if necessary, to dispossess those who were wrongfully holding possession of the location.
Immediately on the receipt of Knapp’s letter, which enclosed the contract with Bates, and also a letter from Bates, Hickok addressed to Bates the following letter:
“New York, October 12th, 1847.
“ Geo. C. Bates, Esq., Detroit.
“¿Sir: — Yours of the 5th inst., to Mr. Samuel Knapp, was forwarded to me, together with your agreement with Mr. Knapp for the sale of one half of location 98, on the Ontonagon liiver, belonging to the Ontonagon Mining Company. Mr. Knapp was duly authorized to make any purchase for the Vulcan Company that he deemed best for their, interest; and in the pur chase of one-half of the Ontonagon location, the trustees approved of his course.
The request to be complied with in your letter, will be attended to in a few days.
Mr. Knapp omitted to give your authority for the sale of this location. When I forward the certificate of deposit, I will also send ■ a special power of attorney, for you to have executed by the trustees of your company, for you to convey to the Vulcan Mining Company the one-half of said location.
Very respectfully yours,
“Wi. Hiokok, Treasurer.”
Hickok claims that, when he wrote this letter, he believed the company would ratify the contract Knapp had made. A meeting of the company was had the next day, and the papers, including Hickok’s letter to Bates, submitted; when the following action only, so far as appears by their records, was had:
“New York, Oct. 13th, 184V.
“At a special meeting of the Vulcan Mining Co., held this day at the office of Messrs. Hickok & Co. — present Messrs, Hickok, Lambert, J. M. Smith, C. E. Smith, E. C. Roberts, Pearsall, and Galloway. Mr. Roberts was called to the chair, and Mr. Galloway ajDpointed secretary pro tern.
The minutes of the last meeting were read and approved.
Communications were presented, and read, from Mr. Knapp, agent of the Company, from Geo. C. Bates, Esq., of Detroit, and Jonas H. Titus; all of which, on motion, were directed to be entered on file.”
Considerable contradictory evidence was given as to the proceedings at this meeting, and Hickok testified that he was censured severely for writing the 'letter to Bates, above given. Galloway testifies with respect to the purchase, as follows:
“I have some knowledge of the purchase, by said Vulcan Mining Co., of part of the tract of the Ontonagon location. I think it was No. 98. This purchase was made, I think, in the fall of 184V. Mr. Knapp came to New York, and Ms operations, he stated, on the Vulcan Co.’s location had not proved successful; and he stated he was not willing to go back without special orders from the company, as he seemed to have his fears about striking a vein of copper; but stated if they would purchase a portion or the whole of the Ontonagon location, he was satisfied he should be successful; that he had examined it, and it had exhibited a great show of copper. The question came up then before the Vulcan Co., as to the propriety of going on with the mining operations — of extending the ¡business for the purpose of mining. Mr. Knapp was authorized by the Vulcan Co. to make the purchase. He did so, as the matter was understood in the office of the company. As I understood it, he went up for the purpose of purchasmg, and did purchase this location of George C. Bates, one of the trustees of the Ontonagon location. Mr. Hickok stated that it would be best to keep in with Mr. Titus, as he could be of great service in accomplishing the purchase. After the conclusion of this matter, some of the Vulcan Co. did not want Titus to have any thing to do with it, and it was talked about changing the matter after it was concluded. William Hickok thought the best way would be to undo that bargain; and have the matter taken out in his own name; namely, the leases conveyed to him, and he would turn them over to the parties of the company; and it was done so, as I understood. Thence sprung the Minnesota Co.” C. E. Smith, Roberts and Pearsall were sworn as witnesses for defendant, and their testimony went' to support that of Hickok.' Smith says:
“ On the 13th October, I was present at another meeting, when, for the first time, I heard that Mr. Knapp had made a contract with the Ontonagon Company to purchase half of its location, thereby exceeding the power given him by the resolution passed at the meeting of the 20th September. I opposed this contract at the time, and all and every measure that tended towards the company’s making a purchase of any new location. I also heard a letter read, written by Hickok to Geo. O. Bates. I censured him for .so doing, on the ground that he had no right to write such a letter without conferring with the trustees. As a trustee and a stockholder I disapproved of the letter. All the other members present took the same grounds, except Mr. Roberts, who was president of the meeting. I believe he did not express an opinion on the matter. One of my reasons for opposing the company’s making the purchase was, that the company was in debt, and the trustees were prohibited by their articles of association to run in debt, or to incur any obligation of debt, without a vote of the stockholders. There had been no such vote, and I was unwilling as a trustee, to lay myself individually liable for the benefit of others.”.
Knajtp again went to New York about October 27th, 1847, and while there, it was arranged that he should return again to Detroit, and take a transfer of one-half of location 98 to Hickok, in his individual name; which was done accordingly; and by an assignment duly executed by the trustees of the Ontonagon Mining Company, and acknowledged by them on the 8th day of November, 1847, an undivided one-half of location 98 was duly assigned, transferred and set over to William Hickok, .with a stipulation as to a division of the same with the Ontonagon Co. and the right in Hickok to the choice of one-half when a division should be made by a line drawn through the middle. ' .
In thus closing up the matter with Bates, Knapp again had consultations with Conger and complainant, but as to what was said the evidence is again conflicting. Conger says Knapp “told me that the Yulcan Mining Co. had purchased, or made arrangements to purchase, one-half of location No. 98 — such one-half as they should elect to take. He said, by an understanding with the members of the company in New York, the interest in said Loca tion No. 98 was to be assigned to said Wm. Hickok in trust for the Vulcan Mining Co., and mentioned as a reason for this mode of assignment, that Hickok had made advances for the expenses, &c., of the company, and proposed'to make still further advances, and wished to take a transfer of the interest to himself in trust, by way of securing himself for these advances. I think I had a statement in writing from Mr. Knapp, signed by himself as agent of the Vulcan Mining Co., setting forth the above facts as to the transfer to- Hickok, and the reasons why he wished it so made. I have since repeatedly searched •for this paper among my files and papers, but have been unable to find it, and conclude that it has been lost. If my impression is wrong as to having actually received such a paper from Mr. Knapp, I am confident that he repeatedly offered to execute a memorandum in writing, embodying the above mentioned facts as to the transfer in trust to Mr. Hickok, and the reasons for such transfer.
“Mr. Knapp consulted Mr. Titus, because he was president of the Baltimore Mining Co., and represented the interest of that company in the Vulcan Mining Company— that interest being a right of the president of the Baltimore Mining Co., for said company, to a certain number of shares in said Vulcan Mining Co. I was a member of the Baltimore Mining Co., and was interested also, through the agreement of the president of that company with the Vulcan Mining Co., in 'said latter company; and the reason why I at first objected to the assignment in trust to Hickok, was because of my aforesaid interest in said Vulcan Mining Co. through the Baltimore Mining Co. I was anxious that the portion of the location sold should distinctly and clearly appear to be the property of the Vulcan Mining Co., so that there should be no question about the rights of the Baltimore Mining Co., under its interest in the Vulcan Mining Co. The effect of this proposed assignment to Hickok upon the rights of the Balti more Mining Co., under its claim to stock in the Vulcan Mining Co., was a particular subject of conversation between myself and Knapp at the time above referred to; and Mr. Knapp then distinctly stated, that as the purchase was for the benefit of the Vulcan Mining Co., the assignment to Hickok in trust for them would leave the rights of the Baltimore Mining Co. the same as if the assignment had been made directly to the Vulcan Mining Co.; and it was distinctly to show this that he either did give, or offered to give, the paper to which I have above referred. Upon this understanding only I consented that the assignment should be made in that form. I and Mr. Titus had been active in aiding Mr. Knapp in the preliminaries of this purchase. It was the understanding with Mr. Bates, the representative of the Ontonagon Co., owning Location 98, before Mr. Knapp went to New York, that the Vulcan Mining Co. should have the privilege of purchasing one-half of said Location No. 98, and that Mr. Bates had agreed with Knapp to assign one-half of Location 98 to the Vulcan Mining- Co. It was farther understood at the same time, between Mr. Knapp, Mr. Titus, and myself, that if the Vulcan Mining Co. wished the Baltimore Mining Co. to take and pay for one-half of this purchase in connection with them, they would assent to such an arrangement; but the Vulcan Mining Co., it was understood, had the privilege at the same time of taking the whole of said purchase. For these reasons, I supposed that myself and Mr. Titus could have prevented the assignment of the above purchase to any other than the Vulcan Mining Co.”
Knapp says, “When I got [to Detroit], I think I met Conger and complainant there. I had some talk with them about what had transpired in New York. Had a good deal of talk with Conger, but not much with complainant, as he had just lost his wife; but I saw him. I think I told Conger what had transpired in New York, and how I was to have the papers made out — the transfer from the Ontona gon to Hiekok. Conger very strongly objected to the way in which the papers were to be made out, and seemed very much displeased with the way they were to be executed. He said that, in the way the papers were to be executed, it just cut off the Vulcan and. Baltimore Cos. entirely. I told him that I was satisfied that it would all be right, and that the Vulcan Co. would finally have the purchase. I told him that I believed if the Baltimore would pay their proportion — their pro rata to the eight hundred shares which they had in the Vulcan Co. — that the Vulcan Co. would take the location off of Mr. Hickok’s hands. I told them I should be willing to do this, so far as I was concerned; and I think they both said they would be willing to do it too. I don’t recollect all that was said. There was a good deal of dissatisfaction expressed, especially by Mr. Conger. Mr. Titus (complainant) further promised that he would go down as soon as he could get time, and attend to it. I thought if he would do that, there would be no obstacle, but what could be removed, to the Vulcan Co. making the purchase of Mr. Hiekok. Feeling this assurance, I did all I could towards' removing Conger’s opposition to having the papers executed in the way they had been thus far executed. I believe I offered to put my statements in writing; I think I did do so. I think I never delivered any statements in writing to him — am quite sure I never did. The statements in writing which I did make, I think I tore up after I got to Lake Superior. I don’t remember all he said. There was some considerable contention between Conger and me — some disagreement on this point about the papers. Conger used some pretty sharp words. I do not remember whether or not he threatened to break up the contract with Bates, but I had some fears.”
The above is but a portion of the testimony of these witnesses, but it is sufficient, without giving the rest, or that of others, to show the views and claims of the parties respectively in reference to the transaction.
Knapp immediately went on and obtained possession, and prosecuted mining operations thereon from some time in December, 184'T, to about July, 1848, in the name of the Vulcan Mining Company, having removed from the location of the company their mining tools and implements, and transferred from one location to the other the men in the employ of said company, — continuing to employ them under contracts of the company.
April 18th, 1848, Knapp sent Bates the following:
“Ontonagon, April 18th, 1848.
Geo. 0. Bates, Esq.
Dear Sir: On examination, the Vulcan Mining Company have selected the north half of Location No. 98, as their choice between the two halves.
Yours, &c.
Samuel 0. Knapp, Agent.'1'1
The purchase of the Ontonagon location ivas paid for by Hickok & Co., — complainant, at their request, signing, as drawer of one and endorser of the other, two of the drafts by which payment was made. It was proved that, from time to time before, they had advanced moneys to aid in carrying on the mining operations of the Vulcan Co., and that on various occasions after this purchase, they had assumed that it was made for that company.
The following letter is alluded to in the opinion of tho Chief .Justice :
“New York, Oct. 30th, 184L
“Jonas II. Titus, Esq.
“Dear Sir: — Your favor, by friend Knapp, was handed me in due time. Mr. K.’s return was quite unexpected; but I think his course a very prudent one, and of the highest importance to the company. I have the following proposition to submit to you, which can be carried out, and with the same bene^t to you and our firm. It is this: It shall be represented by others that your company has abandoned its location, which you can credit. I will make the same representations here, and manage to buy up all of the stock. During this time, however, your company can be at work on such part as Mr. Knapp will set aside for it, on the Ontonagon location. You and I will arrange the preliminaries with regard to purchase of a part of location purchased from Ontonagon Company. You can then submit the proposition ag-reed upon, and I will put it through for-you. I think this plan would be as advantageous for your company, and such a course would be more satisfactory - to the members of our company, so long as they did not know the object, which, of course, they could not. The stock in the Baltimore could not be lessened any in value by such a course, and it would give you and ourselves a chance, who has stood the heaviest expenditure of the company, to make something by the operation.
“ Please let us hear from you by return mail, and state if this course meets your views. * * *
Yours, truly,
“ War. Hickok.
“ Confidential between ourselves, Mr. Knapp and Mr. Conger.”
The following action of the Yulcan Co. appears from its records:
“At the annual meeting of the stockholders of Yulcan Mining Company, held December 6th, 1847, the following preamble and resolutions were adopted:
“ Whereas, The trustees of this company have reported to this meeting the fact of Mr. Knapp having left their location, and ceased Ms mining operations thereon; Therefore,
“Resolved, first, That the meeting do not consider it expedient to resume their mining operations at present.
uResolved, second, That Mr. Knapp be required to furnish the company, forthwith, with his accounts fully made up to the date of his leaving said location, together with a statement of all balances due to workmen, &c., up to the same period, and an exact inventory of the property and effects of all kinds belonging to the company.”
From the time when Knapp removed from the Vulcan Company’s locations in the fall of 1847, all mining operations thereon ceased, and they have never been resumed; but that company has never been dissolved, and still continues to exist.
On June 1st, 1848, the principal shareholders of the assessable stock of the Vulcan Company, in order to possess themselves of the benefit of the Ontonagon purchase, and at the same time exclude the shareholders . of the Baltimore Company from any participation therein on account of their right to shares of unassessable stock of the Vulcan Company, proceeded to organize themselves into a new company by the name of “The Minnesota Mining Company, of New York,” under articles of association, and by that name they received an assignment from Hickok of the purchase. This company was afterwards incorporated by an act of the Legislature.
The assignment from Hickok recited, that he held the purchase from the Ontonagon Co. “ as trustee for himself and the persons who have formed” “the Minnesota Mining Co. of New York,” and acknowledged a. nominal consideration only. And the association in their articles recite their “having purchased, though William Hickok, the right” under the lease of Location 98.
The property of the Minnesota association was divided into 3,000 shares, none of which were made unassessable. This company was composed almost exclusively of those who were interested in the assessable stock of the Vulcan Mining. Company, and they had in it, for the most part, the same shares they had in the Vulcan. In the fore part of July, 1848, they assumed the possession and control of the new location, and have ever since been engaged in mining thereon, with very satisfactory results. Sigce their organization the Minnesota Company have always refused to recognize any right on the part of the Baltimore Mining Company, or its shareholders, or of the complainant as president or trustee, or otherwise, to claim any part of its capital stock, property or effects, or to receive any share of the profits of their operations or business.
November Tth, 1849, complainant filed his bill, setting forth that the Vulcan Company never issued to him the 800 shares of stock according to their agreement, or any part thereof, or to any other person for the Baltimore Company; that the purchase of Bates was made for the Vulcan Co. with a full recognition of his rights and interest in the purchase, Bby virtue of the right to said stock; that the Minnesota Mining Co. Avas formed with the intention of carrying on, under its name, the mining operations of the Vulcan Co., and for the purpose of defrauding complainant of his rights against the Vulcan Co.; that the change from the Vulcan to the Minnesota Co. was merely nominal, while the interests of the shareholders of the new company remained substantially the ■ same that they were in the old, and all the property of the Vulcan Co. was transferred to the Minnesota, Avithout consideration; that the transfer to him or to the Baltimore Co. of the 800 shares of stock in the Vulcan Avould now be of no value, and a mere mockery of rights; that the Vulcan Co. is now to all practical purposes dissolved and dead, and the Minnesota fraudulently and collusively substituted in its place, and is now in fact and in truth the old Vulcan Mining Company, carried on under the act of incorporation obtained by them; and that the corporators of the Minnesota, at the time of the transfer of said location 98 from the Vulcan Co., Avere well aware of the agreement and obligation of the latter to convey said stock to complainant, and the Minnesota Co. is now liable to complainant in the same manner as the Vulcan Co. was. And praying that said Minnesota Co. might be decreed to issue and deliver to complainant, as president of the Baltimore Mining Co. for the use thereof, one-fifth of the shares of the whole capital stock of said Minnesota Co., made unassessable forever, and to account to complainant for their earnings and profits.
The answer admits the arrangement between Titus and Hickok and his associates, as stated in the bill: “admits, that it was contemplated that the interest of the said new company proposed to be formed should be divided into four thousand shares of stock; and that said Hickok and others, as a part of the consideration of said assignment of said lease, agreed to and with the complainant, as president of the Baltimore Mining Company, that, upon the formation of said proposed new company, eight hundred shares of unassessable stock in the same, to be numbered from 1 to 800, inclusive, should be issued to the president of the Baltimore Mining Company, to be endorsed by him, and distributed among the shareholders of said company; and that said new company should be organized, and stock should be issued, within sixty days after the date of said agreement;” and admits also the organization of the Vulcan Co. as alleged.
The answer also admits the bargain by Knapp, assuming to act as agent for the Vulcan Co., with Bates, for the half of location 98, but says that the company, dispirited by their bad success, declined to ratify his action, and that the purchase was subsequently made by Hickok on his own private account; that at that time this location had no fixed or marketable value; that the little labor which had been performed upon it by the Ontonagon Co. had failed to develope any valuable mineral veins thereon, and that company had become dispirited, and nearly abandoned working ; that its value for mineral purposes could then only be judged of by surface indications, which have always proved extremely unreliable; that before this could be determined, the expenditure of much capital and industry was required, and that it ,was then, owing to the many failures of mining adventures on Lake Superior, extremely difficult to induce capitalists to engage in such hazardous undertakings.
The answer denies that the Vulcan Co. ever carried on, or directed or authorized to be carried on, any mining operations on location 98, in their name or for their benefit; says that the Vulcan Co., discouraged by its ill success and fruitless expenditures, has never resumed its mining operations since December, 1847, but has never been in anyway dissolved, and still exists in fact as well as in name, still retains all the interest it ever had in mineral lands, and were the prospects sufficiently encouraging, has the same capacity as formerly to prosecute mining operations thereon; and it denies the identity of defendant with the Vulcan Co., or that the Minnesota was formed for the purpose of carrying on the operations of the Vulcan.
The answer further alleges, that the Minnesota Company has expended upwards of $110,000 in mining operations and improvements connected therewith on said location 98; over $80,000 of which was expended before the Minnesota Co. was made aware of the claim now set up by complainant. It states, on information and belief, that the Vulcan Co. has ever been and still is ready to issue and deliver the ■800 shares of stock to Titus according to their agreement, and that in or about the month of June, 1847, the same was made out and offered to complainant, who declined to receive the same. And it prays the benefit of a demurrer to the bill.
S. A. Goodwin, M. Wisner, and G. V. JST. Bothrop, for complainant:
Mr. Goodwin :
The objection for want of parties, taken for the first time at the hearing, is dilatory only. For if good, the court would order the cause to stand over to bring them in, and without costs:- — 1 Barb. Ch. Pr. 321 and cases cited.. Or it would disregard mere formal parties, and decide tbe ease on tbe merits: — 1 Sumn. 173; 1 Stock. 401.
But the shareholders of the Baltimore Co. are not necessary parties. Titus is trustee for them. Their rights exist against him as trustee, and he is, by the terms of the arrangement, to distribute the stock to them pro rata, and endorse the same over to them. A trustee filing- a bill to collect the trust fund, or obtain possession of the trust property, need not make his cestui que trust a party: — 4 Paige, 34; Story Eq. Pl. §157; 2 Gray, 280 ; 1 Beavan, 91; Calvert on Parties, 212, 215; 5 Hare, 272 ; Wal. Ch. 465, and cases cited; 10 S. & M. 301; 3 Ves. 76; 1 Ves. Sr. 101; 1 Stew. & Port. 467 ; 4 Hare, 126.
The Minnesota Co. is composed of the Yulcan partners, except Titus. It has received the property and profits of the excluded partner, subject to all equities. By becoming incorporated for their own convenience, they could not deprive him of vested rights, but became liable in their corporate name: —16 How. 327; A. & A. on Corp. §§ 6, 379, 381, 382, 391.
Mr. Lothrop:
In equity the rule is that all persons must be made parties whose presence is necessary to make a complete decree: Story's Eq. Pl. § 76. Beyond this there is no absolute rule or principle: — Ibid. § 76c, § 77. And the bill may be so framed, as to scope or relief, as to dispense with parties who would be otherwise necessary: — Ib. §§214, 214a. And a mere nominal or formal party may be dispensed with where the objection is only taken at the hearing, though such party might be properly joined: — Ib. §221 and cases ciu ed, § 642 ; Kean v. Johnson, 1 Stockt. 423.
It is well settled that a cestui que trust is not always a necessary party to a suit brought by the trustee; and I take it that the true and reasonable distinction is this: Where the bill is for the purpose of the execution of the trust, or its object is to destroy the trust, or trust property, [the cestui que trust is a necessary party. But -where, in the language of Cii. Manning, it is “no part of the object [of “the bill] to affect the existence of the trust, or the trust “property, except to place it in the hands of the trustee, “who can not till then execute the trust,” it is not necessary to make the cestui que trust a party: — Morey v. Forsyth, Walk. Ch. 467. And this, I take it, is the result of the discussion on the subject by Calvert in his Treatise: — Calvert on Parties, pp. 7, 8, 210, 211. And it is fully confirmed by the case of Hall v. Sullivan R. R. Co., Law Rep. July, 1858. It was unquestionably the adjudicated law of the state when this bill was filed: — Sill v. Ketchum, Harr. Ch. 423; Cook v. Whalen, Harr. Ch. 443. These cases, with those referred to in the brief of Mr. Goodwin, seem to me to dispose of this question.
The decree in this ease asked for would, ,if granted, merely put the trustee in a position in which he might proceed to execute the trust. The sole right involved in this suit is, whether he is entitled to receive the stock claimed, or its equivalent. What he shall do with it, or what are the rights of the cestuis que trust, is not at all involved. Every party necessary to the consideration of this one question involved, seems to me to be before the court. As to this question, Titus is the representative of the cestui que trusts.
But suppose it should appear that there are other persons who ought to have been made parties, what then? As the objection is made for the first time at the hearing on pleadings and proofs, it is not entitled to favorable consideration. Hence, if the party omitted is merely a nominal or formal one, the objection will not ' be allowed:— Story Fq. PI. §221 and cases cited, §542. And in such cases the court will proceed to a decree if it can possibly do so: — Story Fq. Pl. §§220, 237, 541, 542 ; Hanny v. Cooke, 4 Russ. 34, 54; Lambert v. Hutchinson, 1 Beavan, 277 ; Kean v. Johnson, 1 Stockt. 401. And ad vantage can not be taken of the non-joinder of a co-defendant, unless it will operate to the prejudice of defendants:— Story Eq. Pl. §257, in note.
But even if, to make a decree, it should be thought necessary to add parties, the court will, when the objection is taken at the hearing, allow the cause to stand ovei’, with leave to amend the bill by making new parties, and connecting them with the case by making proper averments:— Story Eq. Pl. §§ 237, 541 ; Milligan v. Mitchell, 1 M. & Cr. 443 ; Covert v. Jeffery, 1 S. & Stu. 106; Orton v. Knable, 3 Wis. 601; Bull v. Bell, 4 Wis. 54; Malin v. Malin, 2 Johns. Ch. 238.
8. T. Douglass, II. E. Emmons, and J. M. Howard, for defendant:
I. All the members of the Paltimore Company should be parties to the bill.
There is no averment or proof of numerousness, and none that the bill is filed by one for or in behalf of all; nor is this a case where such a bill would be sustained if the averments were made: — Calvert on Parties, 41, 28, et seq; Story's Eq. Pl. §§ 94, 96, et seq., 107, 115.
In order to bring a case within the exception to the general rule as to parties, the number of persons must be so great, or so liable to change, that to require all to be made parties by name Avould be a jn’actical inconvenience, amounting almost to a denial of justice:— Calv. on Part. 39, 40; Harrison v. Stewardson, 4 Hare, 530; Brainbridge v. Burton, 2 Beav. 539. And the bill must show on its face that it is brought on behalf of all:- — Story's Eq. Pl. §§95, 99, 107, 126; Calv. on Part. 31; Douglass v. Horsefall, 1 Sim. 81 to 184. And the facts relied upon, in order to dispense Avith making all parties by name, must be averred: — Howland v. Baker, 3 Hare, 74, 75. And, if traversed, must be proved on the hearing, or the bill can not be maintained: — 3 Eng. L. & E. 170.
In those cases where one or more persons are permitted to sue on behalf of themselves and others, all the persons on whose behalf the suit is brought, as well those named as complainants as those who are not, are regarded as parties, and may participate in all proceedings until its final termination: — Daniels Ch. Pr. 1664; Story's Eq. Pl. §96. And the court institutes the proper inquiries as to who are the persons represented, and what are their interests, and in their decree determines the right of each, and distributes the fund in controversy to such only as come in and claim it: — Good v. Blewett, 19 Ves. 836; Story's Eq. Pl. § 99; Weatherly v. St. George, 2 Hare, 629.
The present bill can not be maintained upon the ground that it falls within the class we are considering. It contains no one of the requisite averments to bring it within that class. And the complainant will not, probably, claim that it is brought on behalf of all the Baltimore stockholders, since this would disqualify all his most material witnesses.
The bill, then, being one by the complainant solely, and under which he must show in himself the legal title, or a right to have conveyed to him the legal title, to the interests he claims, and a right tfc> hold them, when so transferred, in trust for his beneficiaries, we proceed to show that, upon the pleadings and proofs, he makes no such case.
I - — -The contract is between Hiclcolc & Go. and the members of the Baltimore Gompany directly. It is their contract in law, and not that of Titus in trust for them.
This, w.e think, will appear from the literal meaning of the contract, from its legal incidents, and from its nature.
a- — The words of the contract are unambiguous, and, in express terms, describe Titus as agent.
The counterpart does not even mention Titus by name, but says the shares are to be delivered to the President of the Baltimore Company. That as such agent he can not maintain suit, see Blair v. Agar, 1 Sim. 37; King of Spain v. Wallack, 6 L. J. Ch. 165; Jones v. Hunt, 1 Hen. & Mumf. 470.
b. — Its legal effect is what its literal terms import — the contract of the company, and not that of complainant.
The intention binds.— See Randall v. Van Alstine, 19 Johns.; Detroit v. Jackson, 1 Doug. Mich. 106 ; Story on Agency, §154; 4 Eng. L. & Eq. 358; 11 Eng. L. & Eq. 430; 1 H. & Nor. 165.
Even if made with the agent personally, it having been for the benefit of the company, and the consideration having moved from the company, the stockholders of the company would have been necessary parties: — Hook v. Kinnear, 3 Swanst. 417; 2 Spence Eq. Jur. 286, 287; Small v. Atwood, 1 Younge, 407; Chadwick v. Marsden, 12 Eng. 18; Crocker v. Higgins, 7 Conn. 342.
The contract, by its- terms and form, is in law the contract of the firm.
“As president and duly authorized agent,” means no more than “ as member of the firm and duly authorized agent.” He contracts for the company then. Is this not the contract of the individuals of the firm, if they sanction it?
If the contract was by “John Doe, a member of and duly authorized agent of the firm of Doe & Co.,” would this court patiently listen to an argument that this was his personal contract, in trust for his firm ? That is exactly the case before the court.
o. — The nature and subject of the contract render the idea of a trust wholly impossible. A trust can not be predicated of such a transaction.
Of what does complainant claim to be trustee ? The bill answers us. Of the shares of “ stock” which Hiekok agreed the Yulcan Company should deliver.
We make no apology for placing here the following truisms. We fight against nothing but what is with apparent soberness stoutly insisted upon by our learned opponents, and formally announced as the sole ground of equity in the bill against this defendant corporation.
The court will see, therefore, trivial as it may deem such an argument, that the great ground of difference between the litigants here, is not so much as to the principles of law in relation to parties, in the abstract. The complainant concedes he can not stand here as a partner. The sole strife is to impart to the words “ stock” as used in the contract and bill, the quality of a chattel; the faculty of property; to make it a thing, instead of a mere certificate, or evidence, of an interest in some other thing. The whole theory of the bill, the conduct of the cause, and the argument which claims complainant is a trustee, is predicated upon the idea of the legal existence of some aggregate body with “ shares of stock," as distinguished from the natural persons, Titus, Iiickok & Co., with their individual interests in the property of the firm. And, although counsel may disclaim an intention to confound things so completely distinct as a corporation and the natural persons which compose it, still the bill in terms so does, and it can be sustained on no other ground than that which involves the idea of ownership in “ stock" independently of the property it represents.
The following are cited only to show the utter want of identity in the law of the stockholders and projectors of a corporation with the corporation itself, and that they are in no sense owners of its property; that they are not even beneficiaries or cestuis que trust within the meaning we are here considering: — Ang. & Ames on Corp., §§307, 308, and cases cited in notes; 9 Barr, 27; 10 W. & S. 397; 4 Paige, 406; 3 Comst. 182; Brooks v. Hill, 1 Mich. 123 ; 2 How. 497; 39 Eng. L. & Eq. 32; Redf. on Railw. 634, §3; 12 Vt. 324 ; 16 Pick. 412; 15 Vt. 519; 28 Vt. 564.
Now what is signified in the contract and the bill by “ shares of stock," is an ownership in co -partnership property. He who holds them owns an undivided part in every article and acre owned by the company. He does not hold something- distinct from, but an interest in, the capital. He is joint tenant — is seized “per my et per tout" in all its effects. They are but parts of the co - partnership agreement between the members of the Vulcan and those of the Baltimore Company; and when it was agreed they should be delivered to Titus, it was not to invest him with a title. They are not things of themselves; they are not chattels, subject to larceny at common law, any more than a receipt, or other certificate. They are, in no sense, the subject of property, and so not of a trust. As well might a man be said to be trustee of a deed which conveyed land to another; or of a receipt for money, which acknowledged a past payment. Such instruments, owing to their very nature; to the fact that the subject of ownershi]3, and the object of value, is the property or transaction to which they refer, can not be the subjects of trust.
The case, then, is reduced to this: The complainant must be trustee of the act or agreement by which he and his associates entered into co-partnership with Hickok and others-Or it may be said that he entered into partnership himself, in trust for his associates. If so, the law executes the trust, and gives the beneficiary a present vested interest: — 10 Met. 349; 28 Miss. 432; 13 S. & M. 658; 1 Smith Lead. Cas. 491.
Indeed, what would his beneficiaries be but dormant or secret partners, if you follow out fully and literally the transit of this title as complainant contends? If he took the partnership interest in trust, this gave in presentí, a vested actual interest in the whole community.
The idea that partnership property can be put into a new joint association, and one of the firm hold the interest growing out of this common contribution of capital in trust for his fellows, without, in this court, making them co-partners with him, is not only erroneous, but at war with every elementary axiom in relation to trusts and co-partnerships.
2. If we grant that the complainant is in any sense a trustee, he can not, in the circumstances of this case, maintain the bill without his ■ beneficiaries. They must be co - complainants.
We shall not stay to argue this upon principle: it is fully settled by the authorities: more especially does the rule apply where the bill, as here, is filed to create the complainant trustee: — Kirk v. Clark, Pre. in Chy. 275; S. C. 3 Vesey, 76, note. The case is literally applicable: — Story Eq. Pl. §§ 149, 215, 216, note 5, §§ 201, 205, 207, note 1, §§ 207a., 207b., 209 ; 1 Ball & B. 182;, 2 Sim. & St. 184; 2 Hare, 628; 19 Ves. 336 ; 2 Sim. & St. 19; 1 Sim. & St. 106; 1 Cr. & Ph. 376 ; 4 Hare, 115; 17 Ga. 222; 1 Green Ch. 305; 1 Paige, 23; 2 Johns. Ch. 238; 2 Stew. & Port. 361; 2 McLean, 30; 3 Hare, 69; 1 Dan. Ch. Pr. 267, and note to 279; Story’s Eq. Pl. §§207, 209.
Where property is given to a trustee for cestuis gue trust, the court will pay it to the cestuis gue trust, and not to the trustee: — 2 Hare, 528; 19 Ves. 336.
Moreover, the bill prays for an account of past dividends, &c. The stockholders of the Baltimore Company are necessary parties to that account: — Green v. Lisson, 2 Curtis C. C. R. 171; 4 Mylne & Cr. 286.
The following case is much like that claimed to be proved by complainant: — 1 Mylne v. Craig 559, Mann v. Malachy.
II. The members of the Vulcan Company are necessary parties.
The complainant’s equities are founded:
Kirst, Upon an agreement to which the Yulcan Company is claimed to be one of the parties, which agreement the court is asked specifically to enforce. As parties to the agreement, the Vulcan Company members are necessary parties.
Secondly, Upon an alleged conveyance by the Vulcan Company to the Minnesota Joint Stock Company, of the north half of 98, for the purpose of defrauding the Baltimore Company of its interest in the location. As parties to the alleged fraud, they are likewise necessary parties to the suit: — Story Eq. Pl. §153; 1 Meriv. 240, 242; Calv. on Part. 19, 24, 80, 81 ; 39 Eng. L. & Eg. 225.
III. Eor the same reason the stockholders of the Minnesota Joint Stock Company should have been made parties; for the joint stock company and corporation are not in law identical39 Eng. Law and Eg. 28, and other cases cited ante.
IV. Ilickok, if he held in trust for complainant, must be a party: — Story Eq. Pl. §211, 209 — If a trustee’s assignment is a breach of trust, he should be made a party; — Coop. Eq. Pl. 3; 7 Ves. 3, 11.
In the last case it is said the trustee should be a party, because he will be made to stand as surety for having broken the trust.
Story Eq. Pl. §155 — If assignor1 is trustee, and the assignment is breach of trust, then he must be a party. The proper decree is that he stand as security, &c. It appears to be a general rule that if cestuis gue trust file a bill to pursue property sold with notice, the trustee must he made a party. — Malv. on Part. 207.
Story Eq. Pl. § 221 —If assignment is in fraud, trustee must be made a party.
These parties can not be dispensed with, even if it be practically a denial of justice to require them.
V. As an account is sought of past dividends, the stockholders pro tern., of the Minnesota Company, who had received dividends, were necessary parties, for they are each of them hound to contribute one-fifth of the dividends they have received:— Chitty Eq. Dig. 25, 33, §14; 6 Railw. Cas. 670; 12 Beav. 125.
An abstract of the briefs is given on the question of parties only.

Opinion:
Manning J.:
Complainant claims, under a written contract, a right to eight hundred shares of unassessable stock in the Vulcan Mining Company, and has filed his bill for the stock against the Minnesota Mining' Company, an incorporation, alleging they are one and the same company, or that the Minnesota Company is the Vulcan Company under a new name.
The testimony in the case does not sustain their identity. On the contrary, it shows the two companies are not one and the same, but separate organizations, having nothing in common between them. The Vulcan Company is still in existence, and the owner of the' mining location purchased for it of the Baltimore Company.
It follows, as a necessary consequence, that for the stock in question the bill should have been filed against the Vulcan Company, instead of the Minnesota Company; and that it should have been filed by the Baltimore Company, unless complainant is a trustee for the stockholders of that company, under the agreement of the 21st November.
Is complainant a trustee under that agreement ? To solve this question recourse must be had to the agreement itself, which is a contract between the Baltimore Mining Company, by complainant as its president and agent, and Hickok & Co. and their associates. It is not a contract between the latter on one part, and Titus on the other. This is not pretended; nor is there any ground for such a claim, as complainant's agency is stated in the contract 'itself. The leases to be assigned were the property of the Baltimore Company, and the eight hundred shares of unassessable stock were the consideration, in part, of the, assignment, and must be regarded as the property of the company, unless by some act of the company the stock was to be severed from its effects, and to become the individual property of its stockholders. No act of the company making such severance or distribution of the stock, or authorizing' it to be made by complainant, is shown; and the provision in the contract for the delivery of the certificates of the stock to complainant, to be in harmony with the other parts of the contract, and come within the scope of complainant's authority, must be understood as an undertaking, and nothing more, on the part of Hickok & Co., and their associates, to deliver the certificates to complainant as the duly authorized agent of the company to receive them.
The supplementary agreement of Vm. Hickok, of the 23d November, is of no binding force whatever. There are several reasons why it should be discarded: 1st. It is an attempted alteration of the agreement of the 21st November, by Wm. Hickok alone, and not by Hickok & Co. and the other persons associated with him in that agreement; 2d. It is not supported or made binding by any new consideration passing between the parties to the original agreement; and, 3d. Its object would seem to be to give the unassessable stock to the shareholders of the Baltimore Company, instead of the company itself) and to create complainant a trustee to receive and make a pro rata distribution of it. As agent to sell, he had no authority, by contract or otherwise, -to make a partition or distribution of the proceeds of the sale among-the shareholders of the company. His authority "to make sale of the same (the leases), on such terms as he should think fit," conferred no such power. If I am correct in this, then it was not in the power of the complainant and the other parties to the agreement of the 21st November, had they all joined in the supplementary agreement, to have changed it in the manner indicated by the latter agreement. Nor does the supplementary agreement appear to have ever been ratified by the Vulcan Company. By its articles of association, it is provided, in express terms, that the 800 shares of unassessable stock shall be "transferred to the Baltimore Mining Company.''
For the reasons stated I think the decree should be affirmed; and I should feel it to be my duty to refrain from expressing an opinion on the case made by the evidence, if I could see that the rights of any one not before us might be prejudiced by it, although the cause was disposed of in the court below on its merits.
It was insisted, on the argument, that the Minnesota Joint Stock Mining Company was formed by a majority of the shareholders of the Vulcan Company, for the purpose of appropriating to their use, land to the exclusion of the other shareholders of the Vulcan Company, a mining location that the Vulcan Company had contracted to purchase of the Ontonagon Company.
The questions, who should be parties to such a case, and what relief should be given, and against whom, I shall not discuss,' as ¡ I do not think the case itself is made out by the evidence.
By whom was the north half of location ninety-eight purchased? I use the word purchased as including contract to purchase, the sense in which it is used by the witnesses.
Galloway says in his testimony, that "Knapp was authorized by the Vulcan Company to make the purchase;" and that "he did so, as the matter was understood in the 'office of the company."
As to Knapp's authority to make the purchase for the Vulcan Company, Galloway is clearly mistaken, as appears from the resolution of the company under which Knapp acted, and the testimony of Hickok, Knapp, Barry, Pears-all, and C. E. Smith, all of whom were at the meeting of the stockholders at which the resolution was passed, Galloway bimself acting as secretary to the meeting, and signing the record. By the resolution, Knapp was "instructed to make inquiries in Detroit and elsewhere, on his return, as to the possibility of purchasing the whole or a portion of the Ontonagon Company's location, and to communicate to the company, as soon as possible, such information as he may be able to obtain on the subject." No authority was given him to make any contract whatever.
The resolution was passed under the following, circumstances: Knapp, as agent of the Vulcan Company, had spent the preceding summer, with the workmen of the company in his charge, in making explorations for copper on the location purchased of the Baltimore Company, and had come to the conclusion that it was worthless for mining, and so stated to the stockholders at their meeting on the 20th September, at which the resolution was adopted. At the same time he called their attention to the Ontonagon 'Company's location, which was for sale, and recommended its purchase. Ilickok and Galloway, as well as himself, were in favor of making the purchase. But the other stockholders were opposed to it — some, because the Baltimore Company would participate in the new adventure without contributing any thing toward the purchase; and others, because they were unwilling, from the experience they had already had, to embark in a new adventure, attended with so much hazard, and, requiring a still further outlay of money. To this last class belonged Barry, on whose motion the resolution was passed. His reason for offering it and asking its adoption by the meeting we will give in his own words. He says: "Mr. Ilickok evinced considerable feeling because his views were not favored by the meeting, and, in order to conciliate him, I suggested that time should be allowed to think and talk the matter over ; that I had no objection that Mr. Knapp, on his return to Detroit, might be directed to make in quiries, and ascertain whether the purchase of No. 98, or a jjart of it, could be made, and report to the company, by - which time we should probably be better prepared to act definitely on the subject. I, therefore, by way of compromise, offered a resolution to that effect, which, after some opposition and much discussion, was finally adopted unanimously by the meeting."
Knapp, on his return to Lake Superior from the city of New York, where the meetings of the company were held, stopped at Detroit, and made a contract with Mr. Bates for the pinchase of one-half of the Ontonagon location. On the 5th October, he sent the contract, with a letter from Bates to himself, to Mr. Hickok, who resided in the city of New York, and on the 12th October, Hickok wrote Bates a letter, stating that "Mr. Knapp was duly authorized to make any purchase for the Vulcan Mining Company that he deemed best for then- interest; and in the purchase of one - half of the Ontonagon location, the trustees approved of his course."
On the next day, or 13th October, there was a special meeting of the company, at which Galloway was present, and again acted as secretary. The record of the meeting, after stating that " the minutes of the last meeting were read and approved," contains the following entry only of business transacted at it:
" Communications were presented [and read from Mr. Knapp, agent of the Company, from [Geo. C. Bates, Esq., of Detroit, and Jonas II. Titus. All of which, on motion, were directed to be entered on file."
Mr. Pearsall, in speaking of this meeting in his testimony, says : "On the 13th October, a meeting of the stockholders was held, and this agreement submitted to them" (the agreement between Bates and Knapp), " and a copy of a letter written by Wm. Hickok to George C. Bates" (the letter of the 12th October already mentioned). "I again expressed my decided opposition to this purchase, most of the stockholders agreeing with me: Daniel A. Galloway was one of them."
O. E. Smith, another witness, says: "On the 13th October I was present at another meeting, when, for the first time, I heard that Mr. Knapp had made a contract with the Ontonagon Company to purchase half of its location, thereby exceeding the power given him by the resolution passed at the meeting of the 20th September. I opposed the contract at the time, and all and evei'y measure that tended towards the company's making a purchase of any new location. I also heard a letter read, written by Hickok to George C. Bates. I censured him for so doing, on the ground that he had no right to write such a letter without confeiring with the trustees. As a trustee and stockholder, I disapproved of the letter. All the other members present took the same ground, except Mr. Roberts, who was president of the meeting. I believe he did not express an opinion on the matter."
If Galloway, when he says Knapp made the purchase "as the matter was understood in the office of the company," intends to be understood as asserting that the company approved of what Knapp had done, he is mistaken, as clearly appears from the testimony recited, as well as that of other witnesses to which I might refer.
Knapp left Detroit for Lake Superior soon after making the contract with Bates, to take possession of the Ontonagon location. He proceeded as far as the Sault, and then, for reasons which it is not necessary here to state, returned to the city of New York to see Hickok. In speaking of his interview with Hickok at this time, he says: "Mr. Hickok informed me that there was a general difficulty existing in the company; that the difficulty had increased since I was there, and they had refused to ratify the contract which I had made with Mr. Bates. I did not know what to do then. I talked with Mr. Hickok considerably on the subject, and told him, as I had before, that I had a good deal of confidence in the location, and wanted to secure an interest in it, and wanted he should. I did the best I could to induce Mr. Hickok individually to go into the purchase. I bad learned from him that the Yulcan Company had flared up. He thought favorably of doing it, but did not give an answer directly; said he would look at it, and see what could be done. I understood from him that he had talked with some of his business firm, and he finally said that he would go into it."
Knapp thereupon returned to Detroit, and consummated the agreement with Bates by taking a conveyance_from the Ontonagon Company to Hickok. He was authorized to do so by Hickok, who furnished him with means to pay the purchase money.
At an annual meeting of the stockholders of the Yulcan Company, on the 6th of December, thereafter, the following preamble and resolutions were adopted:
" Whereas, The trustees of this company have reported to this meeting the fact of Mr. Knapp's having left their location and ceased his mining operations thereon; therefore,
"Resolved., 1st. That the meeting do not consider it expedient to resume their mining operations at present.
"2d. That Mr. Knapp be requested to furnish the company forthwith with his accounts t fully made up to the date of his leaving said location, together with a statement of all balances due to workmen, &c., up to the same period, and an exact inventory of the property and effects of all kinds belonging to' said company."
The evidence referred to, with other evidence bearing on the same points, it seems to me, establishes beyond dispute the following facts: 1st, That Knapp was not authorized by the Yulcan Company to make the purchase. 2d, That with a knowledge of the existence of the contract, the company refused to ratify it. And, 3d, That after the company had refused to ratify the contract, and not before, the purchase was made by Hickok, with more or less expectation, probably, on his part, that it would subsequently be taken off of his hands by the company.
Notwithstanding the resolution of the 20th of September, authorizing Knapp to make inquiries only, Hickok instructed him to make a barg-ain with Bates for the purchase of the location. And Knapp took possession of it, after its conveyance to Hickok, with the men under him in the ernjdoy of the Vulcan Company, and commenced and for several months continued to work it — giving them and others to understand it had been purchased by the Vulcan Company. It also appears, from the evidence before us, that complainant had reason to believe, from Hickok's letters and the statements of Knapp, that the purchase was made for the Vulcan Company. In answer to such and other like acts of Hickok and Knajjpj or either of them, it is only necessary to say that they were wholly unauthorized ; that they were not the acts of the Vulcan Company, or of its authorized agent, but the individual acts of Hickok or Knap]3. Whatever effect, although,unauthorized, might be given to them in a controversy growing out of them between the Vulcan Company and a third person, none whatever could be given to them in a suit by the Vulcan Company against the Minnesota Joint Stock Company. It must be borne in mind it is that view of the case I am now discussing, and that, for that purpose only, I take it for granted the same relief could be had against the Minnesota corporation as against the Minnesota Joint Stock Company. The Baltimore Company has not, and does not claim, any other right in the Ontonagon location, than what it is entitled to by reason of the eight hundred shares of stock it owns in the Vulcan Company. Its claim is based on the rights of a stockholder of the Vulcan Company; and if the Vulcan Company has no rights, its stockholders have none. The Vulcan] Company might have ratified the contract made with Bates, but this it refused to do at the time, and there is no evidence before us that it was ever ratified. Having absolutely refused to ratify it at the time, it could not subsequently ratify it to the prejudice of intervening rights. Much less would it be allowed to show such ratification by proof of the subsequent unauthorized acts of its agents.
Our attention was particularly called on the argument to the following] language in the preamble to the articles of the Minnesota Association, viz: "The undersigned, parties to this instrument, having purchased through "Wm. Hickok," &c,; and to the deed from Hickok to the company, which, after reciting the conveyance to him by the Ontonagon Company, states: "And whereas, the undersigned made and held such purchase for. himself and the other persons who have formed an association called the Minnesota Mining Company of New York; and whereas, articles of association have been signed," &c.
While the parties to these instruments and those claiming under them would, in a proper case, be estopped from denying the truth of these statements — although from the evidence before us uthey do not appear to be true in fact — I am at a loss to perceive their bearing in the present controversy. They contain no recognition of a purchase by, or in trust for, the Vulcan Company; and there is not anything in the articles of association of that company, or in the nature of its business, to prevent, expressly or by implication of law, its members forming other associations for mining, or holding stock in as many different mining companies as they might think proper. And this being the case, Hickok or any other member of the Vulcan Company had a right to purchase the Ontonagon location in his own right. To suppose, therefore, that what took place at the meetings of the Vulcan Company on the 20th of September and 13th of October was^ intended, and was shaped with a view, [to pave the way for such in dividual purchase, or for the subsequent formation of a new company, or for the purpose of thereafter changing the name of the existing company, would imply simulation without any motive, not in one or two persons, but in a majority of those present at these meetings. It seems almost absurd to accuse Hickok and Knapp of acting a false part at the meeting of the 20th of September; and here, if anywhere, the supposed inquity must have commenced. For they, and they alone, were in possession of all that was then known in regard to the Ontonagon location; and they communicated all they knew about it to the meeting, and urged its purchase by the Yulcan Company. And they were then, and still are, stockholders in the Baltimore Company. How far a knowledge of this last fact may have influenced the action of those who were opposed to the purchase, we do not know. All we know in regard to it is, that the purchase was opposed by some for the reason that the Baltimore Company would have an interest in it without paying any part of the purchase money. At the second meeting — the one held on the 13th of October —Knapp was not present, but Hickok was, and his conduct on that occasion was consistent with the part he took in the first meeting. He was still in favor of the purchase; and notwithstanding the reprimand he then received for writing to Bates as he did, he appears afterwards to have cherished a hope the company would yet make the purchase. On the 6th of December thereafter the Company resolved to discontinue mining, and it Was not until the 6th of June following that the Minnesota Joint Stock Company was formed.
There is another important fact that should not be overlooked. When the purchase was made of the Ontonagon Company the location was not what it • is now. It has derived its importance and value from what has transpired since. Its value at that time was speculative, and the low price at which it was purchased, $1,600, shows the estimate placed on it for mining by the Ontonagon Company. It had been partially explored by that company, but the exploration had not been carried so far as to determine its ultimate-value for mining. It has since proved to be one of the best mining locations in the Lake Superior country. It is this that gives the present suit the magnitude and importance so justly attributed to it by the parties. When the acts of men are impugned as not truthful, the magnitude of the benefit or advantage to be derived from them is a circumstance always to be taken into consideration, with other evidence, in determining the truth or falsity of the acts themselves. But it must be the magnitude of the benefit at the time the acts were done. Like a ticket in a lottery, the value of the ticket before the lottery is drawn, and not after the ticket has drawn a prize. Apply this principle to the meetings of the Vulcan Company of the 20th of September, the 13th of October, and the 6th of December, and how very small was the motive for making the acts of those meetings speak a falsehood. If there is anything false, it is not in the records of the meetings, but in the acts themselves.
The Vulcan Company was formed for mining on the location purchased of the Baltimore Company, and our attention was called to the following words in the articles of the company: "Or on other lands in said district that may be leased, located or bought by this association for mining purposes." These words, as I understand them, do not make it obligatory on the company, on the Baltimore location proving worthless for mining, to purchase or lease other locations. Besides, there is nothing in the agreement between the Baltimore Company and Hiekok and others, of the 21st November, requiring the company to be formed in pursuance of it to assume such an obligation.
The decree of the court below, I think, should be affirmed.