Case Name: Ragland v. Broadnax & als.
Court: Supreme Court of Virginia
Jurisdiction: Virginia
Decision Date: 1877-11
Citations: 29 Gratt. 401
Docket Number: 
Parties: *Ragland v. Broadnax & als.
Judges: Absent, Monctjrp,, T\, and Andrrson, J.
Reporter: Virginia Reports
Volume: 70
Pages: 477–485

Head Matter:
*Ragland v. Broadnax & als.
November Term, 1877,
Richmond.
Absent, Monctjrp,, T\, and Andrrson, J.
I. Jurisdiction of Courts. — The circuit court of the city of Richmond has no equity jurisdiction except in certain cases specified in the statute, in which the state is interested or some of the officers and boards representing the state are necessary or proper pailies; and in such cases its jurisdiction is exclusive. Sess. Acts, 1869-’70, pp. 42, 43.
TI. Same — Statute—Parties, -—Upon the facts of this case, held that the Board of Public Works of the state was a necessary party to a suit brought by parties claiming to be stockholders in the Peters-burg Railroad Company, against the Company, the city of Petersburg, Ragland and others, to set aside certain acts of the railroad company done in favor of Ragland as the holder of a large amount of the stock of the company which he purchased from the city of Petersburg. This stock had been pledged by.the city to the state as collateral security for the guaranty by the state of a debt of the city.
III-. The state having returned the stock to the city of Petersburg, and it being held by the city as collateral security for the debt Ragland owed for the stock, and his note having fallen due, the city sued him upon it, and advertised the stock for sale. Ragland then filed his cross-bill in the first suit to enjoin the suit and sale until the questions in the first suit as to the character of the stock which the state had held, whether preferred or common, should ' be settled. All the parties to the original bill were made defendants to the cross-bill. The causes were heard together, and the original bill dismissed —Held :
. 3L. Practice — Cross-Bills. —The second bill asking for relief against the *_ity of Petersburg, which could not be given on the pleadings and proceedings in the original bill, but which was £>ased *upon grounds involved in that case, it was the proper subject of a cross-bill; but the relief sought by it being outside of the original bill, the dismissal of the original bill did not involve the dismissal of the cross-bill.
2. Same — Same.—If the cross-bill is to be treated as an original bill in the nature of a cross-bill, all the parties being before the court, and the case having been matured, it was proper to proceed to decide it upon the merits. And certainly Ragland is not to be heard to question the jurisdiction of the court after having had the determination of the question brought by him into the case.
In July, 1873, A. J. Broadnax, W. E. Broadnax and E. W. Wilkins instituted a suit in the circuit court of the city of Richmond, against the Petersburg Railroad Company, Reuben Ragland, the Board of Public Works, and several other persons; and the City of Petersburg afterwards became a party defendant in the cause. The plaintiffs, in their bill, say they are the owners of four hundred and forty shares of the captial stock of the Petersburg Railroad Company, and they file the bill not only for themselves, but for all other stockholders of the company, and such holders of the mortgage debt of the company as may become parties to the suit and contribute to the cost of its prosecution. They set out the action of the stockholders of the company by which they directed to be issued to Reuben Ragland and other persons named 4,852 shares of preferred stock, and that the board of directors and treasurer of said company pay to the holders of said stocks three per centum per annum thereon out of the gross receipts of the company, in addition to their dividends out of the net profits of said company; and that they should pay to Reuben Ragland two hundred and forty-nine thousand three hundred and fifty dollars, in satisfaction of all arrears claimed by him to be due upon 4,490 shares of the so-called preferred stock held by him, and that in addition thereto that the said Ragland, *as president of the company, be paid the sum of $12,000 per annum in monthly instalments. They deny that the stock was preferred stock entitled, to the payment of three per cent, out of the gross earnings of the company; or that this stock was, in addition to this three per cent, out of the gross earnings, to be paid equally with the other stock of the company dividends out of the net earnings; or that Ragland was entitled to receive these dividends if they were properly payable, which fell due before he purchased the stock. They charge that Ragland having purchased a majority of the stock of the company, he controlled the action of the stockholders when this action was taken. And they refer to the acts of assembly upon which the claim of Ragland was founded, and the action of the common hall of the city of Petersburg, by which the stock was sold to Ragland. These are given in the opinion of the court delivered by Christian, J. And they ask f r the appointment of a receiver for the road.
Ragland answered the bill. He charged that the plaintiffs were not the owners of any stock in the Petersburg railroad company; that though they had at one time owned the shares they claimed, they had disposed of them, and that the suit was in fact carried on in their names by John M. Robinson, a citizen of Baltimore, who was president of the Sea-board and Roanoke railroad company and several other companies he named, and that the object was to defeat the efforts the defendant was making to attract freight to his road, which would interfere' with the interests of the companies managed by said Robinson. He denies that the meeting of the stockholders was packed, and says one of the plaintiffs was present at the meeting, acting for himself and as proxy for one other of the plaintiffs, and voted for everything that was done. And he insists that the action of the ^stockholders was proper; that the stock was preferred stock, and that the holders thereof were entitled to three per cent, per annum out of the gross earnings of the company, and an equal dividend out of the net earnings; and that these net earnings, unpaid when he purchased the stock, passed with the stock to him.
In September, 1875, Reuben Ragland filed what is called a cross-bill in the cause. He made the City of Petersburg, the Seaboard and Roanoke Railroad Company, the Pe-tersburg Railroad Company, the Board of Public Works of Virginia, the plaintiffs in the first bill, and the other defendants thereto, defendants. The object of this bill is to enjoin the city of Petersburg from proceeding in an action which had been commenced by said city of Petersburg against himself and others upon a note for $249,983, with interest, which had been given by them for 3,500 shares of the stock of the Petersburg railroad company, and to enjoin the sale of said stock by the city of Petersburg for the payment of said debt, the said stock having been left with the city of Petersburg as collateral security for the payment of said debt. After setting out the nature of the stock, 3,335 shares of which he claims to be preferred stock, and its purchase by Rag-land, and the circumstances of that purchase, and the objections made in the original suit to Ragland’s claims, he states the points he asks to have settled:
First. Are the 3,235 shares of stock, common stock, or preferred and guaranteed stock, in the hands of the present owners thereof?
Second. If the said 3,235 shares be preferred and guaranteed stock, what is the measure of the preference and guaranty? Is it, first, a preferred and guaranteed dividend of one and a half per centum for every six months, out of the gross receipts of the road, without participation in the full amount of dividends declared out of net *profits, or is it a preferred and guaranteed dividend out of gross receipts as aforesaid, with participation in the full amount of dividends declared out of net profits in addition thereto?
The City of Petersburg answered the bill contesting the claims of the plaintiff as to the character of the stocks and the dividends to be paid upon it, and insisting that there was nothing in their agreement with Ragland, as he had insisted in his bill, which forbade the city to sue upon the note and to sell the stock.
The two causes came on to be heard on the 19th of April, 1876, when the court being of opinion that the plaintiffs in the first suit had so disposed of their stock that they had no appreciable interest in the subject in controversy, dismissed their bill with costs. In the second case the judge — Well-ford — delivered the following opinion:
The dismissal of the original bill does not, however, relieve the court from the duty of passing upon some of the matters set out therein, for they are necessarily involved in the action which must be had upon the cross-bill. That bill must be regarded in many respects as an original bill, and the court having assumed jurisdiction and awarded an injunction to the complainant therein, cannot content itself with a simple dissolution of the injunction and dismissal of the bill.
It appears from the cross-bill that a considerable portion of the purchase money of the stock of the Petersburg railroad company sold to Ragland by the city of Peters-burg, is unpaid, and that as a security therefor the city of Petersburg holds the note of Ragland and other parties for the sum of $249,982, due upon its face August 1st 1875, with the pledge of 3,500 shares of the stock now in the possession of the city as collateral security; that suit has been instituted by the city on the note, and *thal a sale of the stock has been ordered by the city. The prosecution of the suit and the sale of the stock has been enjoined by the court, not upon any hearing of the parties or any judicial determination of the matters at issue, but upon the ex parte application of the complainant. I am of opinion now, as I was when the preliminary injunction was issued, that it was providently awarded. The bill presents grave questions, and opportunity was afforded the city of Petersburg to be heard as to the propriety of considering application for the preliminary injunction in advance of a determination of those questions upon full presentation thereof, by counsel, for all the parties in interest. That presentation was then promised and expected at a very early date, and the determination thereof by the court has been delayed without its default. It is claimed by the complainant, Ragland, that the city of Peters-burg, by an ordinance of the council, passed March 5th, 1873, in accepting the note of Rag-land and his associates, bound itself not to demand or require payment of the principal of the debt for which said note was given, so long as the stock, or the greater part thereof, should continue to be held by the said Ragland and his then partners, or either of them, or by any other bona fide citizen or citizens of Petersburg. The ordinance is very awkwardly expressed, but this construction imputes to the common council which enacted it such a gratuitous extension of credit to the obligors that it cannot be accepted if the bungling phraseology of the ordinance admits of any other interpretation. 1 think that it does, and that read in the light of surrounding circumstances and the contemporaneous acts of all parties, its meaning and intent is very clear.
It will be observed that the obligation of Ragland, &c.., bound them to pay on the 1st day of August, 1875, if not paid sooner. When the obligation was executed *the _ stock was held by the stale of Virginia as security for a debt due by the city of Petersburg, and could not then be delivered; but in contemplation of its release by the state and surrender to the city prior to the maturity of the obligation, the obligors bound themselves, upon the tender of the stock and demand of payment by the city, to anticipate the maturity of the obligation and make payment in full after four months’ notice. The provision of the ordinance for a waiver of right to demand payment was very, clearly intended to be limited to this contemplated anticipation of the agreed pay day, and to relieve the obligors from any apprehension that they would be required to pay before August 1st, 1875, so long as they or any citizens of Petersburg as assignees continued to hold the stock.
But even conceding- the construction claimed by Ragland, his purchase since the passage of the ordinance of the entire interest of his then partners and his own removal from the city of Petersburg has absolved the city from the obligation of its waiver; for it cannot be pretended that the stock is now under the control of “any party or parties bona fide holding the same as a citizen or citizens of the city of Peters-burg,” and in such contingency the city reserved in the ordinance the right to enforce payment of the debt.
It appears that Ragland purchased from the city of Petersburg 4,755 shares of stock of the Petersburg railroad company; that 1,255 shares were transferred and delivered to him, and that the remaining 3,500 shares are now in the possession of the city of Petersburg, hypothecated as security for the unpaid purchase money. Of these 3,500 shares, 3,235 were derived by the city of Petersburg from the state of Virginia, and have been heretofore known and recognized as preferred stock.
While this stock was held by the state and by the city, the only preference claimed was the right to annual dividends of three per cent., whether any dividend was or was not declared upon the other stock, and to no more unless a dividend of more than three per cent, was declared upon the other stock, and in such event only to an equal dividend with the other stock. When the stock was purchased by Ragland he was advised by learned counsel that this stock was much more valuable, that it was entitled not merely to the dividend of three per cent, in any contingency, but to share equally in any and all dividends declared upon the other stock.
This construction of the law not merely made this stock much more valuable, that in futuro the holders should receive these dividends, but imposed upon the company heavy liability for arrearages due to the stock for unpaid dividends of thirty previous years. _ Furthermore it appears that under authority of an act of assembly, passed in 1861, the company increased its capital stock to the extent of fifty per cent., and it was also claimed by Ragland under the like advice that the fifty per cent, additional stock accruing to the holders of this preferred stock, partook of its character, and was entitled to the full extent with the original stock to the benefit of these peculiar privileges.
The stockholders of the company in general meeting, in 1872, recognized the'se claims to their full extent, and ordered the board of directors to pay to Reuben Ragland the arrearages claimed, and to issue to all the holders of the original preferred stock, or any dividend stock thereof, certificates for all their original and new stock, expressing on the face of the certificates that the stock was “preferred;” and the board have, it appears, made payment to Ragland and issued some of these certificates.
*The original bill in this case complained of all this action of the company and the board of directors, and denied the validity of the claim asserted on behalf, not merely of this new stock, but also of the original stock, and as to the original stock not only denied the new claims asserted by Ragland, but insisted that it was entitled to no preference whatever over the other stock of the company. The views put forth in that bill were sanctioned and endorsed by counsel of ability and commanding professional influence. If sound, they impaired immensely the value of 3,235 shares of the stock held by the city of Petersburg as security for Ragland’s note, and whether sound or not, pending the determination of that question in the courts, no sale could be made of the stock without the hazard of great detriment to all the parties in interest. The sale has been arrested by the order of this court. The city of Petersburg is entitled to have the sale made, and to realize, so far as it will be available, the full amount of her debt. But the sale can not be made without a determination by this court of the character and status of the stock, whether preferred or not preferred; and if preferred, a determination of the extent of its privileges.
What, then, is the status of this stock?
It appears that in 1843 the state of Virginia held $160,000 of common stock in this Petersburg railroad company, and was a creditor of the company for $150,000 of principal money loaned, and $13,500 of interest in arrear. In view of this fact, an act was passed by the general assembly (Sess. Acts 184-3, p. 71-2) increasing the capital stock of the company to the extent of its debt to the state, and authorizing the board of public works to subscribe the amount of the debt to the stock of the company upon certain conditions.
*The conditions so far as action was required were complied with, and the subscription made. Those conditions required a mortgage to be executed creating the first lien on the entire property of the company and all its net income, conditional to pay the amount of the then debt of the state in full, whenever the company should fail to pay dividends of three per cent, per annum on all the stock of the state in the company. The act further required the officers of the company to set apart out of its gross receipts the amount of this three per cent, dividend, and to pay the same into the treasury, reserved to the state the right in the event of default for thirty days to obtain judgment therefor against the company on thirty days’ notice, and furthermore made the president, directors, and treasurer of the company liable for such default to a penalty of $1,000 each, recoverable by the board of public works on ten days’ notice.
Was the stock in the hands of the state of Virginia preferred stock? It was more; it was guaranteed stock. It was $323,500 of stock, entitled in any and every contin gency of the future fortunes of the company to a dividend of three per cent, per annum, the punctuality of the payment ©f which was insured, as far as legislative sagacity could insure anything, as long as the company could maintain its corporate life; and in the event of overwhelming disaster to the company, to the extent of $163,500, more than fifty per cent, of its par value, the principal of the stock was secured by a first lien upon all it corporate property.
The stock was valuable property to the State, and made annual returns into her treasury so long as she held it. But in 1869 the state transferred this stock to the city of Petersburg. The transfer was made with the avowed object of facilitating the construction of the Southside railroad, but it was not made without consideration
*on the part of the city of Petersburg. The act of assembly (Sess. Acts, 1848-9, p. 3 07) indicates no contemplation of any benefaction designed to or any consideration moving from the Petersburg railroad company.
It was the act of a proprietor transferring for value his interest in the stock of a railroad corporation. 1 know of no principle of law or of construction of statutes which would justify me in attributing to the state any purpose to withhold as assignor any valuable incident to this property which was susceptible of transfer either in law or equity to the assignee. The act contemplated an absolute transfer, and carried with it necessarily, I think, all that made the property valuable in the hands of the assignor. It may be very well conceded that at the time the right was acquired by the state, it was not in the contemplation of either party that the state would ever transfer it. The same thing may be said by every improvement company to which the state in her former days subscribed her three-fifths of stock. It may be conceded further that there is difficulty and some apparent discord in enforcing for an as-signee the securities reserved by the state.I think the difficulties suggested in argument are more apparent than real. But conceding that they are quite as formidable as suggested, I cannot see that the misfortune of the assignee in losing the benefit of one security which the state only could make available should he made the basis of an argument to deprive him of the benefit of other securities which are just as available to him as they could have been to the state.
It is then a grave matter of inquiry to all the stockholders of this company to what extent are the privileges of this stock to be conceded.
The privilege attached to the stock was the creature of positive law, reserved to the state, and we may well presume *that the board of public works was fully cognizant of the views of the general assembly in its enactment. Their contemporaneous construction of the law and their unchallenged action under it, for the several years in which they as the representatives of the state were charged with the duty of enforcing it, would have militated very much against any assertion of a contrary construction by the city of Peters-burg when she first became a party in interest. But the city of Petersburg concurred, and for thirty years no question was suggested. I incline very much to think that this action of the holders of this stock, even if we could reduce it to the low grade of mere acquiescence, would estop any claimants under them from preferring a broader claim. But I do not rest my opinion upon this; with the utmost respect for the learning and ability of the counsel under whose advice the action of the Petersburg company was had in recognizing the novel and startling claims of Mr. Ragland, I am of opinion that the language of the statute (Acts 3 842-3, p. 72), clearly condemn them. I see no necessity for any refinement of verbal criticism in seeking the intent of the law-maker; distinctly and clearly dividends to the amount of 3 per centum per annum, payable half-yearly — i. e., 3.54 per cent, semi-annually — are reserved; then we have the proviso “nothing herein contained shall deprive the state of the full amount of any half-yearly dividend exceeding 1)4 per cent., which may be declared by the company on the whole amount of its capital stock.” The insertion here of the words “exceeding 3 54 per cent.,” the exact amount reserved to the state in any contingency, seems to me utterly unintelligible, except upon the idea that the state proposed as soon as the interstate upon her then debt which was commuted into stock should be realized, out of the dividend reserved as chargeable on the gross earnings of the company, to *place herself upon an equal footing with all other stockholders in the company.
T am of opinion that this stock in the hands of the present holders or their assignees, as it was in the hands of the state, is entitled to a dividend of 1)4 per cent, semi-annually per share, to be paid out of any earnings of the company, and that in the event of any dividends being declared upon the common stock exceeding 154 per cent, semi-annually, it is entitled, in addition, to the 354 per cent. _ chargeable upon the gross earnings, to receive out of the net earnings a sufficient sum to make its aggregate dividend equal to that of the other stock, and that in the event of the default of the company, the board of public works may be required to forclose the mortgage and to realize by sale of the corporate properly the sum of $3 63,000, to be divided rat-ablv among the 3,235 shares of stock.
The iniunction, so far as it restrains the city of Petersburg from prosecuting her suit upon the note of Reuben Ragland and others, must be dissolved.
I do not'think it would be proper to dissolve the injunction restraining the sale of the stock; but the city of Petersburg is entitled to have it sold, and a sale will be ordered by the court and commissioners appointed for that purpose, and the cause retained upon the docket with a view to the entry' of any orders which may be necessary after the sale, to secure the purchaser or purchasers proper transfers and certificates of stock, with full recognition by the company of the peculiar priviliges incident thereto.
The decree dissolved the injunction so far as it prohibited the city of Petersburg from 'prosecuting their suit-at law upon the note; but continued it as to the sale of the stock held as collateral security, and appointed commissioners to sell the same in the mode and upon terms *stated in the decree. And thereupon Ragland applied to this court for an appeal; which was allowed.
The case was argued by John L,yon and William Green, for Ragland; by Judge Crump and Drewry A. Hinton, for the City of Petersburg; and by W. W. Gordon, for the Petersburg Railroad Company.
Jurisdiction of Courts. — In Blanton v. Fertilizing Co., 77 Va. 335, it was held, citing the principal case, that the commissioner of agriculture not being one of the enumerated officers who, being necessary parties defendant, give the circuit court of Richmond, chancery jurisdiction according to the statute, that court has no jurisdiction in such a case. See also, Taylor v. Williams, 78 Va. 422; 4 Min. Inst. (3d Ed.) 637.
Corporations — Preferred Stockholders, —In Gordon v. Railroad Co., 78 Va. 501, the principal case is cited for the proposition that guaranteed stock issued by a corporation under certain statutes is guaranteed or preferred capital in the stricte.st sense; that the dividends are payable out of the gross earn ings and that in a division of the assets, these guaranteed stockholders must be paid if need be, to the exclusion of the common stock; but that as to any excess of the dividends guaranteed them they stand upon the same footing as common stockholders.
Cross-Bills. — In Fishburne v. Ferguson, 85 Va. 326, the principal case is cited for the proposition that a cross-bill is proper whenever the defendants have equities arising out of the subject-matter of the ■original suit, which entitle them to affirmative relief which they cannot obtain in that suit. See 4 Min. Inst. (3d Ed.) 1381.

Opinion:
Christian, J.
The first question we have to determine in this case is a question of jurisdiction.
Did the circuit court of the city of Richmond have the jurisdiction to hear and determine the matters set forth in the original bill?
The circuit court of the city of Richmond is different from the other circuit courts of the state — a court of limited jurisdiction.
It has no chancery jurisdiction, (there being created by statute a separate chancery court for the city of Richmond), except "in suits in which it may be necessary or proper to make any of the following public officers a party defendant as representing the commonwealth, to-wit: the governor, -attorney-general, treasurer,' register of the land office, or either auditor; or in which it may be necessary or proper to make any of the following public corporations parties defendant,, to-wit: the board of the literary fund, board of education, board of public works, or any other public corporation composed of officers of government, of the funds and property of which the commonwealth is sole owner, or in which it shall be attemped to enjoin or otherwise suspend or affect any judgment or decree in behalf of the commonwealth, or any execution issued on such judgment or decree." Sess. Acts 1869-79, pp. 42, 43.
- By this provision of the statute it is plain,, that while the circuit court of the city of Richmond has no chancery *jurisdiction outside of the specific powers indicated therein, yet, within these .limits thus defined by the statute law, it has the same and equal powers with those of the other circuit courts of this state in respect •to the jurisdiction of chancery causes; and it is equally plain that with respect to the' before-mentioned classes of cases and persons the said circuit court of the city of Richmond has exclusive jurisdiction, even in a chancery cause, which is withheld from all the other courts of the commonwealth. In other words, by fair interpretation of the statute law, whenever one of the persons or classes named in the statute shall be a necessary or proper party, the circuit court of the city of Richmond has, whether it be in a common law or chancery cause, not only original but exclusive jurisdiction.
In order, therefore, to determine whether the circuit court of the city of Richmond had jurisdiction to entertain the original bill of the plaintiffs in this cause, it is only necessary to inquire whether the board of public works was a necessary or proper party to that suit.
It appears' from an examination of this record and the acts of assembly, that in the year 1843 the state held $160,000 of common stock in the Petersburg railroad company, and was a creditor of the company for $150,000 of principal money loaned, and $13,500 interest in arrear.
On the 25th March, 1843, an act was passed by the general assembly increasing the capital stock of the company to the extent of its debt to the state, and authorizing the board of public works to subscribe the amount of this debt to the stock of the company upon certain conditions. These conditions required a mortgage to be executed creating the first lien on the entire property of the company, and all its net income, conditioned to pay the amount of the then debt of the state in full whenever the *company should fail to pay. dividends of three per cent, per annum on all the stock of the state in the company. The act further required the officers of the company to set apart out of its gross receipts the amount of this three per cent, dividend, and to pay the same into the treasury of the state to the credit of the board of public works. On default of such payment there is reserved, by the terms of the act, the right to the state to obtain judgment, on thirty days' notice, for the same; and furthermore] the president, directors and treasurer of the company are made liable for such default in the penalty of $1,000 each, recoverable by the board of public works on ten days' notice. See- Sess. Acts 1842-43,. pp. 71, 72.
On the 26th of January, 1850, an act was passed authorizing the state to guarantee the payment of certain bonds -of the city of Petersburg to the amount of $323,500 (see Sess. Acts, 1849-50, p. 57); and as indemnity against any loss which might result to the state in consequence of such guaranty, the said city of Petersburg pledged and mortgaged to the board, of public works 3,235 shares of the capital stock of the Petersburg railroad company (No. 743, and dated 7th May, 1849).
It appears from the record that of the shares of stock in the Petersburg railroad company owned by the city of Petersburg and sold by said city to the appellant, Reuben Ragland, 3,235 shares had been pledged or mortgaged to the board.of public works to indemnify the state for any loss it might sustain in consequence of its guaranty of the bonds of the city of Peters-burg. The state was, therefore, doubly interested in any suit affecting the disposition of the stock or franchises of the company, First. Because by the act of 25th March, 1843, it retained a lien upon the entire property of the company and its net earnings, conditioned to pay its then debt whenever there was a failure to pay a dividend of three per cent, per annum on *all the stock the state held, which was to be paid semi-annually out of the gross receipts; and second, because the larger part of the slock sold to Ragland by the city of Petersburg was pledged to indemnify the state against any loss it might sustain in consequence of the guaranty by the state of the bonds of said city. In both cases the board of public works, standing towards the state and the railroad company and the city of Petersburg in the position of mortgagee, was a necessary and proper party.
As to the character of this stock, as well as to its disposition and sale, the state had a certain and valuable interest, and the board of public works, as the representative of the state, charged with certain duties and responsibilities prescribed by the statutes referred to, was a necessary and proper party.
'l'he court is therefore of opinion that the original bill in, this suit was properly filed in the circuit court of the city of Richmond, and that there was no error in the refusal of said circuit court to dismiss the same for want of jurisdiction.
This disposes of the question of jurisdiction.
The circuit court, however, after asserting, as we think, properly, its jurisdiction to entertain the plaintiff's bill, dismissed the bill upon certain grounds not necessary to be considered by this court, because from that order there is no appeal, and of that action of the circuit court there is no complaint here.
But it is insisted by the learned counsel for the appellants here, that the dismissal by the circuit court of the original bill necessarily carried with it a dismissal also of the cross-bill (so-called) filed by the appellant, Reuben Ragland; and it is insisted that it was error in said circuit court in not dismissing both bills, instead of making a decree upon the issues made by the cross-bill. The bill filed by Ragland (called in the proceedings a *cross-bill), was filed for a twofold purpose; first, to restrain and enjoin the city of Petersburg from instituting suit upon a certain promissory note for the sum of $249,982, executed by him, with others, as his sureties, for 3,500 shares of stock in the Petersburg railroad company, sold to him by said city, upon the alleged ground that by express covenant of said city with him, said city had agreed not to demand or require payment of the principal of said debt so long as said stock, or the greater part thereof, should continue to be held by him; and second, to enjoin and restrain the said city of Petersburg from selling said stock which had been hypothecated as collateral security for the payment of said note, until it should be determined what was the character and nature of the 3,235 shares of stock sold and now held by said city as collateral (above referred to), whether the same was common stock or guaranteed and preferred stock.
The formal prayer of the bill (after convening all the parties interested) was to enjoin and restrain the city of Petersburg both from instituting suit on said note and from selling said stock; and the court was asked to enter its decree "determining and establishing the true character and status of the aforesaid 3,235 shares of stock, and what are the rights and privileges, preferences and advantages appertaining and belonging thereto, and what are the rights and duties of the holders and owners of said 3,235 shares of stock, and of the Peters-burg railroad company and its officers and agents in respect 1o the same."
An injunction was awarded in aceordT anee with the prayer of this bill filed by Ragland, and after protracted proceedings and most voluminous depositions, the circuit court determined and adjudicated the very points submitted to it by said bill and proceedings under it.
*11 is now insisted by Ragland, who filed this bill asking for an adjudication of these questions, and who, of all the parties, is the only appellant, that the circuit court erred in not dismissing his bill at. the same time the original bill was dismissed. . In other words, after invoking and receiving the extraordinary jurisdiction in his behalf of said circuit court by way of injunction, and asking the adjudication of the court upon the questions he submitted to it in his bill, he now insists the court had no jurisdiction to pass upon the questions submitted alone by him, and that the dismissal of the original bill carried with it the dismissal of his cross-bill also.
The court is of opinion, that the dismissal of the original bill in this case did not carry with it. necessarily a dismissal also of the cross-bill. Indeed it would have been error to have dismissed the latter bill without adjudicating the questions therein submitted to the court.
Whether the bill filed by Ragland be regarded simply as a cross-bill, or as a cross-bill in the nature of an original bill, the circuit court had jurisdiction to pass upon and adjudicate the questions submitted to it in that bill, and to retain it for that purpose after the dismissal of the original bill; and such dismissal did not oust said court of its jurisdiction. A cross-bill is generally brought for one of two purposes, either to obtain a necessary discovery of facts in aid of the defense to the original bill, or to obtain full relief to all parties touching the matters of the original bill. A cross-bill is also necessary to enable a defendant to have a decree against a co-defendant. Story's Eq. Pl. § 389, 392. In 2 Barb. Ch. Pract., p. 129, it is said: "The connection of the matter of a cross-bill, be it per se legal or equitable, with the subject matter of the original bill, gives the court jurisdiction of the cross-bill, *of which it cannot be ousted by a dismission of the original bill."
A cross-bill is proper whenever the defendants, or any or either of them, have equities arising out of the subject matter of the original suit which entitle them to affirmative relief which they cannot obtain in that suit. See Jones v. Smith, 14 lili. R. 229; Clay v. Wickliffe, 1 Dana R. 589. A cross-bill is always necessary when the defendant is entitled to some positive relief beyond what the scope of the complainant's suit will afford him. 2 Barb. Ch. Pr. 129; Brown v. Story, 2 Paige R. 594. The affirmative relief sought by Ragland, one of the defendants, in the original bill and the sole plaintiff in cross-bill, was to enjoin the sale of the stock which he had hypothecated as collateral security with the city of Peters-burg, at least, until the character of that stock as "preferred" or "common" stock could be determined-by adjudication of the court. This was so connected' with the matter of the original bill as to be a proper subject of a cross-bill, but at the same time a matter of which the jurisdiction of the court could not be ousted by a dismission of the original bill.
It is insisted, however, by one of the learned counsel for the appellees, that the city of Petersburg, whom the plaintiff in the cross-bill seeks to enjoin, was not a party to the original bill, and that indeed the so-called cross-bill must be treated as an original bill, and has none of the features of a cross-bill, because it makes new parties and introduces new and independent matter. It is true that in the original bill the city of Petersburg is not formally made a party defendant and called upon to answer; but the city of Petersburg does come in and' answer the bill. Whether it filed a formal petition, as it might have done, and asked to be made a party to a suit in which its interest were so vitally affected,- the record does not disclose; *but the record does show that an answer to the original bill was filed by th"e city of Peters-burg, and that the case was brought on to be heard, among other papers in the cause, upon the answer of the city of Petersburg, and throughout the case was treated as a party to the suit. But conceding that Rag-land's bill must be held to be an original bill, and not. a cross-bill; still, in the view we take of the case, the circuit court of the city of Richmond had jurisdiction of the cause.
The argument is that if the bill be treated as an original bill at the time it was filed, the state of Virginia had parted with her interest in the stock in question, having released it in favor of the city of Peters-burg, and that therefore the board of public works was not a proper or necessary party; and that there was nothing left t® which the jurisdiction could attach.
It is true that the state had in October, 1873, released its mortgage ©n the stock which was pledged by the City of Peters-burg on the 27th of May, 1850, to indemnify the state against any loss it might sustain in consequence of its guarantee of the bonds of said city; but it is also true that the state held a mortgage "on the whole property, real and personal, of which the Pe-tersburg railroad company were the owners," authorized and required to be taken by the board of public works under the act of March 25th, 1843. At the time of the filing of Ragland's bill, whether there was a subsisting mortgage in favor of the state or not, the state being the mortgagee in a ^ mortgage executed as directed by the board of public works, and whether it had been released or not, it was still a question in which the state was interested, and the board of public works was therefore a "necessary and proper party."
The court is therefore of opinion that the circuit court of the city of Richmond had jurisdiction to determine *and adjudicate the questions raised in the cross-bill filed by Reuben Ragland, and that the dismission of the original bill by the court did not oust the jurisdiction of the court as to the matters presented by the cross-bill.
It is a noteworthy fact, and one to us incomprehensible, that of all the parties to the original and cross-bills, the only one who now questions the jurisdiction of the circuit court is the party who came into that court invoking its jurisdiction for relief, and asking its protection by way of injunction, and a determination of the character of the stock before it should be sold to prevent a sacrifice, now when the injunction has been awarded, and the very question submitted by his bill has been adjudicated, objects that the court was without jurisdiction, and that it was error in the court below not to have dismissed his own bill.
We think the circuit court was right in retaining the cross-bill and adjudicating the questions raised by it. All the parties interested were before the court. ' It had jurisdiction of the subject matter and the parties. It ought not, after protracted and costly litigation, to have dismissed the cross-bill and turned the parties over to another tribunal to litigate the same questions. In furtherance of a favorite maxim of courts of equity, it ought to have put an end to the litigation between the parties, having all the parties before it and doing justice to all. See Rhea v. Jordan, 28 Gratt. 678; Mettart v. Hagan, 18 Gratt. 231; Clarke v. Long, 4 Rand. 452.
The court is further of opinion that there is no error in the decree of the circuit court in dissolving so much of the injunction order as enjoins and restricts thd city of Petersburg from further prosecution of the action of debt brought by said city of Pe-tersburg as plaintiff, and now pending in the hustings court of the city of Petersburg against Reuben Ragland, Lancaster, Brown & Co., *T. T. Broocks, S. A. Plummer and W-illiam R. Mallory, defendants, and also from instituting or prosecuting any other action or suit whatever upon the promissory note for two hundred and forty-nine thousand nine hundred and eighty-two dollars, executed by Reuben Ragland and others, as his sureties, to the city of Petersburg, in part payment for the thirty-five hundred shares of the stock of the Petersburg railroad company held by said city as collateral security for said note. And this court concurs with the circuit court of the city of Richmond in the opinion that the thirty-two hundred and thirty-five shares of the capital stock of the Petersburg railroad company, in the bill and proceedings mentioned and embraced in certificate number seven hundred and forty-three, issued by said company, and now held by said city as collateral security for the note of said Ragland and others, and which was derived originally from the state of Virginia, is entitled to a dividend of one and one-half per cent, per share semi-annually, to be paid out of any earnings of the said company, and that in the event of any semi-annual dividends being declared upon the common stock of said company exceeding said one and one-half per cent., the said stock is entitled, in addition to said one and one-half per cent, chargeable upon the gross earnings of said company, to receive out of the net earnings of said company a sum sufficient to make its aggregate dividend equal to that received by other stockholders, and" that in case of default of the company to pay said one and one-half per cent, semi-annually, the board of public works may be required to foreclose the mortgage made to secure said payment and to realize by a sale of the corporate property in said mortgage mentioned the sum of one hundred and sixty-three thousand five hundred dollars, to be divided ratably among the holders of the said *thirty-two hundred and thirty-five shares of the said stock.
This court, adopting the views of the said circuit court expressed in the clear and able opinion filed with the record in this cause, is of opinion that there is no error in the decree of the said circuit court, and that the same be affirmed.
Staples and Burks, J's, concurred in the opinion of Christian, J.
Decree affirmed.