Case Name: Francis Putnam et al., Appellants, vs. Alanson Sweet et al., Appellees
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1849-06
Citations: 1 Chand. 286
Docket Number: 
Parties: Francis Putnam et al., Appellants, vs. Alanson Sweet et al., Appellees.
Judges: Whiton and Jackson, Judges, Concurred.
Reporter: Chandler
Volume: 1
Pages: 286–353

Head Matter:
Francis Putnam et al., Appellants, vs. Alanson Sweet et al., Appellees.
Where two separate and distinct parties arc acting in the accomplishment of'a measure injurious toothers who have rights in in the same matter; though they may be acting separately and without concert to carry their plan into effect, all the parties so acting maybe joined in a bill by the aggrieved party as defendantgj and an objection by demurrer on account of such alleged misjoin-der, wiil not be sustained.
Though-it may be'necessary, in proceedings against a corporation, to oust it of its jurisdiction and franchises, for the proper officer .of the State to be the actor, by information or quo 'yvqrrqnto, yet whore one or more- have obtained, through fraud, the possession of a, corporation created by law, and assume to exercise its functions, and are possessed of its franchises, the Court will entertain a bill, filed by parties aggrieved by such an act, 'as a matter of private right; and where such possession has been acquired by means of the process of a Court, and fraudulently used, and after th'e ac-quirements of the franchise by means thereof, it is abandoned, a bill filed by the aggrieved parties will be entertained to annul all that had^been accomplished by the improper use of the process of the Court, and the parties will be placed in statu quo.
Where tho process of a Court has been perverted and abused, it will vindicate itself by undoing all that was done hy such wrongful avpPjlifiation pf its power- But .where a- corporation is in esse, in fact», it- is necessary tlrat-the corporation should be a party in a suit to oust those who are alleged-to have fraudulently, possessed themselves of its franchises; and it is erroneous to dismiss a bill filed where the corporation should have been made a party. In such a case, leave to amend should bo granted.
It is competent for any number of persons who have an interest in the stock of a corporation,, to file a bill in behalf of themselves and all others standing in like condition, though all are not participants in filing such bill.
This was an appeal from the decision of -the Judge of the thii'd-Circuit, on a general demurrer interposed by a part of the defendants in the bill. The demurrer was sus<-táined by the judge, and -the complainants appealed.
The bill purported on its face to have been fifed’by the complainants, who are named therein as such, and in the behalf and for the benefit of themselves and all others, bona fide subsezibez’s-to the capital stock of the Milwaukee and Jánesville Plank Road Company, chartered-by theTezv zdtorial Legislative Assembly, approved March 0; 1848'.
The commissioners appointed for the distribution of the stock of the company to subscribers, were LevrBlossom, Aaron Putnam, Emery Thayer, Thomas P. Williams. A. Hyatt Smith, and-Timothy Jackman; and by the provisions of the act, after one thousand -shares of -.the stock should have been subscribed, and the money, to wit: one . dollar on each share, should have been actually paid to the commissioners, the subscribers aizd others,.their associates, were declared a body politic and coz-porate, and upon twenty days’ notice, by the commissioners, the stockholders were empowered to elect directors of the company. That until the directors were chosen, the commis-.. sioners had power, by the act, to issue certificates of stock to subscribez’s, and .to act .themselves' as. directors. That, in June, 1848, the commissioners opened the books of Subscription, and kept them open to subscribers for a considerable time, and that but small subscriptions were made until December thereafter.
. That in consequence of the reluctance of persons to make subscriptions, one or more meetings were called, of the citizens of Milwaukee, touching and relating to the importance of taking the stock and building the road] at which meetings the defendants, 'Blossom, Sweet, and others of the defendants attended and participated in the proceedings. That at such meetings fears were expressed by some, that some person or persons might acquire by their subscriptions the controlling interest in the road “ for the sake of private aggrandizement or fraudulent profit,” and that such apprehension retarded those who, but for such apprehension would subscribe. That Blossom and Sweet, but particularly Sweet, repudiated any such apprehension, and denied any such intention on his part. That on account of sueh denial of intention on the part of Blossom and Sweet, some of the complainants were induced to make subscriptions; and the bill states the amount subscribed by the several persons who are complainants, upon that hypothesis, and that they paid one dollar on each share so subscribed. That amongst the subscribers to make up the subscriptions to the amount of one thous- and shares, were the defendants Sweet, Clark, and Webb.’ That much anxiety was entertained that the subscriptions should be made to- the amount of one thousand shares, so that the company should be organized. That it was frequently stated at the public meetings, held on the subject of the road, to the knowledge of a part of the defendants in the bill) that when one thousand Shares of the stock wefe subscribed for, the books of subscription should be closed by the commissioners', and an election of directors had.
That the commissioners, on the 14th day of December 1848, passed a resolution, that as soon as the amount of one thousand shares should be subscribed, and the sum of one dollar on a share paid, the books of subscription should be closed and the company organized; and that the money paid on such subscriptions should be deposited with Alexander Mitchell, Secretary of the Wisconsin Marine and Fire Insurance Company, 'subject to the drafts of the president and directors of the company. That the books Were closed; that at the time of closing them, Williams, one of the defendants-, and a commissioner, produced ariother book of subscription kept by him, which contained subscriptions made by the defendant Sweet for tWo thousand shares — -of the said Webb for two huhdred and fifty shares —of the defendant Davis for two hundred ánd fifty shares —of the defendant Clark for two hundred árid fifty shares; which from information and beliéf, the complainants charge, was kept secret from the residue of the commissioners at the time of the passage of the resolution to close the books of subscription; and biso from most of the other subscribers. The bill charges that if the complainants had known of these latter subscriptions, they would not have made their former subscriptions to the stock. Charges, from information and belief, that the defendants Sweet, Webb, Davis and Clark, did not at the time of making their said subscriptions, Or at any time since, pay one dollar on each share thereof to the said Mitchell, and that n'Ó part of such subscriptions have come to the hands of the commissioners. That the persons last mentioned, to wit: Sweet, Webb, Davis and Clark, or some of them, pretended to deposit the money on such subscriptions with Williams, one of the commissioners, but who was acting therein, in collusion with Sweet and others aforesaid, in regard thereto; and who returned the money so received by him to the said last mentioned subscribers. The bill charges, from information and belief, that such alleged pretended subscriptions and payments were fictitious and fraudulent as against the complainants, and in fraudulent confederacy with the defendants, Blossom and Williams, two of the commissioners. That from information and belief, such subscriptions aforesaid were secretly done, and in confederacy as aforesaid; and to deceive the complainants. That at a meeting of the commissioners, held December 22d, 1848, they resolved to open the books for further subscription, and- that immedi-, ately upon the passage of the resolution, the defendant Blossom, entered in the subscription books, a subscription in his own name, for five thousand shares of the said-stock, but, from the information and belief of the com-, plainants, did not then, or at any time pay to the commissioners or to Mitchell, the sum of one dollar on a share for such stock so subscribed for by him; that such subscription was made in confederacy with Sweet, Davis, Webb, Olark and Williams; that from information and belief, the said Blossom, at the time of making such subscription, was directed by the commissioners to pay one dollar on a share, subscribed by him, to Alexander-Mitchell, which he refused to do; and upon such refusal, the commissioners passed a resolution authorizing Timothy Jackman, one-of the commissioners,,to receive the money, but that Bios-. som refused, alleging that he had paid the money to Williams, one of the commissioners; but Williams refused to pay the same to the other- commissioners, or deposite the same with Mitchell. That, thereupon,the majority of the commissioners passed a resolution refusing to receive the subscription of Blossom. Alleges a confederacy by Blossom, Williams and others to make a pretended payment, but claims it to have been fictitious and unreal; and that the money did not belong to Blossom, and that his subscription was not made bona fide. That after the passage of the resolution to reject the subscription of Blossom, A. Hyatt Smith, one of the commissioners, as the attorney of the defendants Wells, Kneeland, Ludington and Weeks, made subscriptions for them of seven thousand five hundred shares of the stock, one-fourth part for each of said defendants, whieh subscription is alleged to have been made to acquire the control of the company. That no actual payment was made on such subscription, so made fey Smith. That the commissioners gave notice'of an election of directors for the fifth day of February, 1849, and directed certificates of the stock subscribed for; to be made and delivered to the subscribers who had paid one, dollar on a share. That the duty of filling up the certificates devolved principally upon Blossom, as Secretary of the Board. That on the day appointed for the election of directors, Thayer, the. president of the commissioners, signed the certificates made out for him, without any particular examination of them, and Blossom signed them as secretary. That it was not intended; as the bill alleges, to issue certificates to the defendants Sweet, Webb, Davis or Glark; but that Blossom, acting!n confederacy with them, mademut and signed certificates- for thena which were also signed by Thayer, as president. Thai these certificates, after having been made and signed a» aforesaid, were fraudulently abstracted by some one of the parties in whose -name they were issued. Charges, from ■ belief, that Blossom was aiding in such abstraction, and that there was a concerted plan to obtain them fraudulently, and by that means to obtain the control of the company. That on the fifth day of February, 1849, Blossom fraud-dulently filed a bill oí complaint, acting therein as is alleged in the bill in this cause, in concert with several of the defendants, and to prevent an organization of the company, and to obtain the control thereof; which bill was filed against the commissioners, as defendants, seeking to have them restrained from issuing certificates-of stock subscribed for, in prejudice of the subscription made by himself, and to restrain them from further action ip the way of the distribution of the stock to the prejudice of his subscription, claiming therein that he had ■made his subscription in good faith, and had paid in one dollar on each share subscribed for by him, to one of the commissioners-, at a meeting held by them for receiving subscriptions) and that the commissioners 'had attempted by resolution, tb vacate his said subscription and deprive him of his stock, and refused to assign the same to him, and asking therein that the said commissioners might be restrained from presiding at any meeting for the choice of directors, or from any other official act until the order of the Court in the premises, Unless they should first grant to .him the assignment of the stobk. subscribed for by him,, in the order in which subscriptions for said stock were made by him and 'others who had subscribed therefor; and charging in the bill that the act of the copa- missioners in ■withholding his stock from him, was fraudulent and unjust. The bill in this cause' further alleges, that on the fifth day tof February, 1849, when the commissioners were met together to distribute and assign the stock amongst the subscribers, Blossom caused an injunction to be served upon all the commissioners except himself, restraining them as aforesaid, and also a subpoena to answer the matters of his bill. The bill alleges this act of Blossom as fraudulent, and that he fraudulently delayed the service of the process until the time of the meeting as aforesaid, to obtain some advantage, or to prevent an organization of the company, and to obtain the control of the company. That on the twenty-second day of February, Blossom discontinued his said suit, by causing a discontinuance thereof to be entered with the clerk. That the commissioners, from and after the service upon them of the injunction, took no further action touching the distribution of the stock or the organization of the company.
That the defendants Sweet, Webb, Hibbard, Davis, Greves and Taylor assumed to be directors of the company, and to exercise the functions of such office, and claim that the said company is organized in accordance with the act creating it, and have made contracts for the construction of the road, &c., and are performing all the functions of directors, as if they were such in fact, and claim to have been elected by the stock-holders, in accordance with the said act. The bill also charges that the acts of the persons aforesaid are fraudulent as against the rights of the complainants and others, subscribers to the stock. That Blossom,' as secretary of the commissioners, has possessed himself of all the papers, subscrip tion books and records, and has delivered them to the defendants, who assume to have been elected directors-.
The bill called for answers to the several matters alleged and charged therein.
The bill prayed that all the proceedings taken by defendants to organize the company after the time of the service of the injunction, in the-suit commenced by Bios*-som, might be declared void; -and that the defendants be decreed to deliver to the board of commissioners all th© books, records and proceedings of the commissioners,which have come to the defendants hands, and that the subscript' tions to said stock of five thousand shares made by tli© defendant Blossom, of two thousand shares made by Sweot, of two thousand shares made by Webb, of two hundred and fifty shares made by Davis, of two hundred and fifty shares made by Clark, and of seven thousand five hundred by Weeks, Wells, Kneeland, and Ludington, may severally be declared void; and that the certificates of stock signed by said Thayer, as president of the commissioners, and of Blossom, as secretary, for such subscriptions aforesaid, may be decreed to be null and void, and delivered up to be cancelled; and that all proceedings had in the organization and affairs of the company by any persons other than the commissioners, be decreed null and void, and that the defendants acting as directors and their secretary, may be decreed to deliver up the books, papers, &c., of which they are possessed, &c.; and that the complainants and their associates may be decreed to be the only stock-holders of the company. And that it be decreed that it is the duty of the commissioners to cause an election of directors to be held by the stock-holders in pursuance of the act of incorporation, and to preside at and superintend such election, &c., and for any contin» gent relief that may be required. The bill also prayed for an injunction against the persons claiming to be, and acting as directors.
To this bill the defendants interposed a general de* murrer.
The causes of demurrer assigned by the defendants-were as follows:
1st. That the bill was multifarious»
2d. A want of jurisdiction in the Circuit Court.
3d. That the corporation should have been made a party.
4th. That the complainants have not a right to file their bill in behalf of themselves and others who do not join with them as parties.
Ryan, for Appellants.
Chandler & Holliday, fot Appellee's.
On the part of the appellants, the following points were made and argued:
The bill of complaint in this cause was exhibited in the Milwaukee Circuit Court, by the complainants, in behalf of themselves and all others, Iona fide subscribers to the capital stock of the Milwaukee and Janesville Plank Road Company, and was removed to the Washington 'Circuit Court, under the provisions for a change of venue in civil causes.
The bill recites (in part) the charter of the company. Territorial Session Laws, 1-848, p. 88.
The bill states a bona fide subscription of one thousand shares of the capital stock and the payment of one dollar on each share, pursuant to the provisions of the charter, by the complainants and their fellows; a secret fraudulent subscription, to one compiissoner only — "Williams—by Sweet, Davis, Webb and Clark, of two thousand seven hundred and fifty shares of stock without any payment as required by the charter; a fraudulent subscription of five thousand shares, by Levi Blossom, without payment; a fraudulent subscription of seven thousand five hundred shares by Wells, Weeks, Kneeland and Ludington, without payment: a fraudulent suing out and abuse of the process of injunction pf the Court in which this bill was filed, by Blossom, enjoining the commissioners from organizing the company by an election pursuant to the charter, in order to defeat and which did defeat an organization of the company under the charter: a fraudulent confederacy in all these and minor acts, by Sweet, Davis, Hibbard, agent of Clark, Webb, Blossom, and Williams, another of the commissioners, for the purpose of obtaining a fraudulent control of the stock and organization of the company, and of thereby defrauding the complainants and their fellows. That upon the service of Blossom’s injunction, the commissioners, in obedience to it, abandoned the further prosecution of their duties under the charter. That in pursuance and in accomplishment of the whole confederacy, and by means of the abandonment of the commissioners, in obedience to the injunction, Sweet, Webb, Davis, Hib bard, Greves, and Taylor, under some fraudulent, fictitious and unfounded pretence, assume to be directors of the company, hqve obtained from Blossom the books, papers &e., of the commissioners, and have assumed to bring buits and collect moneys &., in the name of the corporation; and that Chandler, tender them, afumes to be secret (ary of the company.
The bill charges, that the corporation is not organized under the charter; but, if the Court, upon-the construction of the charter, should be of opinion that it is, then that the commissioners are the officers of it; and charges, that the commissioners are bound to prosecute their duties -under the charter, and that a majority of them would do so, if so advised by the Court; the bill prays, that the said several fraudulent subscriptions be set aside and declared void; that all pretended proceedings in the organization of the company, subsequent to the service of Blossom’s injunction and the consequent abandonment of their duties by the commissioners, be declared void; that the books, papers &c., of the company be delivered up to the commissioners; that the complainants and their fellows be declared the only stock-holders of the company; that it be declared the duty of the commissioners to hold an election under the charter; and for general relief.
To this bill certain of the defendants put in a demurrqr for want of equity, and assign as special causes of demurrer:
1st. That the bill is multifarious.
2d. Want of jurisdiction in the Court to entertain the bill.
3d. That the corporation created by the charter is a necessary party.
4th. That the complainants have not the right to prosecute this bill.
At the time of writing we have not the demurrer before us, and only state the order of those grounds from memory; but it is believed that such is their order,
The Court below sustained the demurrer on the second, $iird and fourth grounds, and dismissed the bill.
-From this decree this appeal is taken to this Court.
We apprehend, that if -there is no equity in this bill, it is because equity has ceased to be administered. But before considering that, it is deemed the most proper to dispose of the technical objections; and these will be considered in the order above aásigned to them, And
FiRST-^-Multifariousness.
. A bill is not to be treated as mulifarious, because it joins several good causes of complaint, 'growing out of the some transaction, where all the defendants are interested in the same claim of right1, and where the relief asked for is of the same general -character. Story's Eq. pi., 233, sec. 284. Even where they claim under distinct titles and have independent -interests. Ib. sec. 285, 286 and 287.
So a bill is not to-be held multifarious, if the complainants assert a general right against the defendants, although there be no privity between the defendants. Mayor of York vs. Pilkington, 1 -Jltk., 284. See also, Mitford's Eq. p'L, 182, marg., p.; Varick vs. Smith, 5 Paige, 137 and 160; Fellows vs. Fellows, 4 Cowen, 682; Brinkerhoff vs. Brown, 4 John. CL Rep., 139 and 152.
Here the complainants set up one general right, that they and their fellows are the only stockholders, against all of the defendants; and therefore the bill is not multifarious, And all of the defendants, except the commissioners, claim on fraudulent subscriptions against the common right of-the complainants; and the commissioners abandon their duties to the complainants in consequence of the same; and therefore the bill is not multifarious.
The whole is charged as one concerted confederacy, except the subscription of Wells, Weeks, Ludington and Kneelandj.and as against the complainants, there isprivi ty between them and the other fraudulent subscribers, because -it was an antagonistic struggle between them, in fraud of the complainants on the part of both.
-If two commit a felony or a trespass against a third, although the two do the act in hostility to each other, each seeking to defeat the other and to obtain for himself the whole advantage, they are privies as to him against whom the felony or trespass is committed.
Here there could be no adequate relief in several bilis* The complainants could not have their right, as the only stockholders, settled, unless all claiming against that right were in Court. The proper decree directing the commissioners in their duties could not be made, unless all these parties were in Court. The parties could not be reinstated in statu quo ante Blossom’s fraudulent injunction, unless they were all in Court.
The whole subject is one and not susceptible of convenient division; and separate bills for each right and each wrong would be open to the opposite objection to multifariousness, undue divisibility, promoting unreasonable litigation. Story’s Eq. pi., sec. 287.
But the demurrer is not well taken in practice* The bill charges several of the demurring defendants with special combination; and the rule is, that in such case, the defendants demurring for multifariousness must accompany their demurrer by an answer denying the combination charged. Mitford’s Eq. pi., 181. marg. p.; Powell vs. Jlrderne, 1 Vernon, 416, marg. p.
On this point the Court below fully sustained these positions, and we think there is little difficulty in concluding the bill free from this objection, a mere objection of convenience, here urged for, inconvenience.
Second — Want of jurisdiction.
So far as we comprehended the force of the argument of the defendants and the opinion of the Court in sustaining this ground, it signified, that that part of our case which sought a declaration of the Court, that all pro-, eeedings subsequent to the service of Blossom’s injunction were void, is the subject of information by the Attorney General, and that the relief cannot be had on a bill filed by private individuals.
In the first place we say to this, that if the position were true, it goes only to a part of the bill, whereas the demurrer goes to the whole bill,. and therefore if true,, could not sustain the demurrer. Story’s Eq. pi, 349, sec. 443.
As to the conflicting rights between the complainants and the fraudulent subscribers; and the duties of the commissioners to the complainants; and all the relative rights between individuals; the Court will always and of common practice interfere to grant equitable relief, on the application of the persons aggrieved. Gray vs. Chaplin, ÍJ Sim. and Stuart, 267; Hitchens vs. Congreve, 4 Russ., 562; JLdleyvs. Whitstable Co., 17 Vesey, 315; Walker vs. JDeveraux, 4 Paige, 229; Mpads vs. Walker, Hopkins,590; Haight'vs. Hay, 1 Johns. Ch. R,, 48; Robinson vs. Smith 3 Paige, 322.
So far then as setting aside the frauds of the defendants, and restoring their rights to the complainants is concerned, clearly the bill by' private persons is good,and admitting the whole, argument of the defendants, the bill and the relief it seeks are good in part; and the demur, rer being to the whole bill cannot be sustained. . But we deny that there is any relief sought by this bill, which- can only be had by information by the Attorney General. The bill asks for no-judgment of ouster; involves no public right.
This is not a proceeding to measure the extent or ascertain the forfeiture of a corporate franchise. These would be questions of public right within the duty of the public legal officer, the Attorney General. Here the franchise is admitted; all parties claim under and assert it; there is no question of its extent or of its forfeiture. But the only questions are of the relative private rights of private persons, under the act conferring the franchise.The bill is by private persons to enforce private rights, and for relief against private wrongs.
. Again: the mere assumption to be directors by private persons is no public wrong. It is a private wrong on the stockholders, with which the State has nothing to do. The bill shows that they are not and cannot be directors, colore officii.
By the 3d section of the charter, the commissioners are invested with the same powers and duties as directors; by the 5th section they are to superintend and direct all the proceedings of the company; by the 3d section they are to give notice of holding «m election. Who is to superintend or preside over the elections ? Clearly the commissioners. The injunction, therefore, to them not to superintend the election, was an injunction against an election. No one else could hold it; and in law, as the bilí charges in fact, no election was or could be held.
The mere assumption of persons to be directors, without any right, confers no color of office. But this bill does not even ask them to be excluded. It only asks that they may deliver papers, of which they have obtained a fraudulent possession, to the commissioners, to whom they belong; and prays a declaration that all the consequences of a fraudulent abuse of the process of the Court shall be declared void.
The injunction was a part of the confederacy to defraud the complainants; and inasmuch as it prevented an election, it .enabled these persons to set up their fictitious claims to be directors. And as this was done pendente, lite, even if no injunction had been abused- as here alleged, it would have been such a fraud' upon tlie Court as would 1)0 summarily relieved against. Attorney General vs. Dixie, 13 Vesey, 519, explained in Attorney Gen. vs. Clarendon, 17 Vesey, 491.
The whole of this argument is greatly strengthened, if, as we shall hereafter contend, the corporation is not in esse; if there is no corporation, there are of necessity no directors.
The Attorney General is the law officer of the State; he asserts and represents the rights of the sovereignty; where they are asserted, he must assert them; where they are in question, he must be a party. But it does not need his sanction to assert a private right-, or remedy a private wrong. The doctrine that the Attorney General only can proceed in a case of private wrong and private right; that a private person cannot assert- a private right against a private wrong in a matter of private interest, without calling in the aid of the Attorney General, simply because the case arises from corporate relations, is a new monstrous, oppressive and iniquitous doctrine. Milford’s Eg. PI, 147, marg.p., Story’s Eq. PL, 52, 53, Secs. 49, 50; Attorney General vs. Moses. 2 Maddock’s R., 500; Brom-ley vs. Smith, 1 Simons, 8, Here tire bill- does not show a case of the public nature of the right, nor where all persons interested are parties to the abuse. But it seeks on behalf of: private persons, to rescue their private property from private fraud.
Courts of equity have long felt the-use of full power over-these questions; our Legislature have given them concurrent jurisdiction with Courts of law. Session Laws 1841, p. 36. The jurisdiction conferred by this act is tobe exercised according to the practice of-Courts of equity; not of Courts of law.
The act of 1846 (page- 85-) refers only to cases- of ouster or restraint from undue use or extension of corporate franchises; and does not limit the second clause of the act -of ■ 1841-. But even without such an- act, a Court of equity w&uld remove officers of a corporation, even when hold-. ing: colorably. Ogden vs. Kip. 6 John's Ch. M:, 160; Ga~.. bln vs. ¡Miller, 10 Paige, 627.
Again: an information, in the nature of a mandamus, would’ afford- no sufficient relief. And equity will not drive a party to such a- remedy, inefficient in its na-, ture, merely because it- is the case of a corporation.— Jldley vs. Whitstable Co., 19 Vesey, 305.
Had we sought by this bill to oust the corporation, or to restrain the franchise, or raised any other questionpublki juris, we could understand the argument. But here is this case. The stock is a trust fund; the complainants are the cestui que trusts, with an exclusive right to elect direc-toras trustees of the fund; they have been prevented from doing so by a fraud committed on their rights of property.; and certain persons, in collusion with those who committed the fraud, assume to actas trustees of the complainants, as, 4-i^tors of the company, and have taken a part, and seek. to take all of the trust property; we ask the Court to restrain them. Such is the whole case, and such is the common practice of Courts of equity. We will hereafter examine further the general jurisdiction of the Court under this bill; we have so far confined the argument to the objection urged.
Third — For want of a proper party, the corporation, <l The Milwaukee and Janesville Plank Road Company.”
To this objection we give three answers:
1st. The corporation is not yet in esse.
2d. If in esse, it is not a necessary party.
3d. If in esse and a necessary party, it is sufficiently before the Court.
But before passing to these points we desire to consider another:
Want of necessary parties is good ground of demurrer; but on such a demurrer being sustained, the Court will always grant leave to amend, and not dismiss the bill; and even if dismissed because the necessary party cannot be made, it is without prejudice. Story’s Eq. PL, 415, § 541; Jones vs. Jones, 3 .(likin’s, 110. Therefore, this ground of demurrer, if well taken, cannot sustain the decree dismissing the bill, no.r will this Court regard it with favor. Wormly vs. Warmly, 5 Cond. R., 486.
1st. The corporation is not yet in esse.
This depends on the construction of the charter, which is to be given according to sound and convenient rules of interpretation, and not by mere verbal or puerile criticism. This is not the case of a corporation created by the charter, eo instante; but of a corporation to take effect on compliance with certain pre-requisites. The charter vests no rights. Rights-under it are to be acquired only by subscription.
The first section speaks of the company “ hereby incorporated;’’ whereas, no corporation might ever exist under the act, by a failure of subscription; it would bo very puerile to urge that the corporation existed eo in-. stante; yet such is ,the strict verbal construction.
The second section provides, that when one thousand»1 shares are subscribed for,, and one dollar a share paid, in, the subscribers, with “such other persons as shall associate with them.for that purpose, are created a,corporation. We do not think that a sound construction of. this last provision, will warrant the conclusion, that the moment the last share is so subscribed for, and no. second 'of time soon-^ cr or later, the corporation is in esse. We should then have to determine, whether ¡the last stroke of the pen in •the name of the-subscriber .of the thousanth share, or the passing of the dollar from ins- hand to the commissioner’s, or what stage of that momentous passage of a dollar, was the solemn act of the imposing solemnity, which called the corporation into being. Suppose nine hundred, and ninety-nine shares subscribed; suppose another subscriber . adds ten; would ,the corporation be in esse on the payment-of the first dollar; or wait-in. abeyance, until the subscriber fulfilled his contract by the payment ofttlie other nine 1 Or if he paid first and subscribed after, - would the corporation be in esse when he wrote .the figure, or await the existence of. the momentous .cypher? This is very puerile and absurd; yet these are considerations which Courts might be called upon to determine, by a literal construction of. the provision.
Again: not only the subscribers of the one thousand ■shares are thus incorporated, but such other persons . as shall afterwards -baeomp associated with them., Does.-,, the corporate character of these other persons antedate-to the time of the subscription of the last of the one thous- and shares'! . Yet such is the literal construction contended for. The creation of a corporation is *an act of more moment, attended with more certainty and solemnity than this. We must look to other provisions of the act, for a more rational construction of this.
Now the third section provides, that as soon as one thousand shares are thus subscribed, the commissioners shall call an election. Why then, and not await further subscriptions! Because there then vests a right to organize the corporation, to be composed of those subscribers and such as shall afterwards subscribe. The election of directors is the organization of the corporation. This is the solemnity, plain, certain and defined in its nature, which is to call the corporation into being. - The provision, fairly and rationally construed, has this meaning: the-subscribers, before one thousand shares are subscribed, have a contingent right of forming a corporation; after one thousand shares are subscribed that right becomes*vested. The subscribers have the right, in virtue of the subscription of the one thousand shares, to form, a corporation, to■gether with such other persons as shall become associated with them, by an organization by means of an election of officers. Before the election, there are no Officers of the company. The commissioners have, ds far ds applicable the powers of directors, but not the office; the commissioners -«ie the officers of the State, the dire'ctots th® officers of the company. The commissioners femáis commissioners to 'the end.
It was contended below, that as soon as the one thou-.saud shares were subscribed, the commissioners became directors, and were required to elect a president and secretary. Neither of the propositions is correct. The act confers the powers of directors on the commissioners, as well before as after the subscription, but not the office of directors; and as the commissioners are required (Sec. 5.) to give certificates of subscriptions, signed by their president and secretary, it seems very plain, that they are required to choose a president and secretary^ before receiving any subscripions whatever; each subscriber being entitled to such certificate, when he subscribes.
The whole argument gains great force from tbé fact, that the commissioners,being prevented from organizing the corporation by an election, abandoned wholly all concern with the company. The complainants and their fellows are the only persons entitled to become corporators, and to organize the corporation; they have not done so. They have an interrupted but subsisting right to organize a corporation; but they have no officers, no corporate organization, no corporate union, no corporate power of action'. In Meads vs. Walker, Hopkins, 587, the charter is quoted, and seems very similar to this; there the chancellor either considered the corporation not in esse, or not á necessary party* We think he did not consider it in esse.
Upon the whole it seems to us obvious, that a rational and the most rational construction of the provision of the charter is, that the subscription of one thousand shares vests in the subscribers an absolute right-, contingent before, to organize themselves as a corporation by an election of officers; and that the election vests the franchises.
2d. The corporation, if in essé, is not a necessary .party. '
The corporation, as Such, has rio interest to be affected •to this bill.
■ A's will be seen hereafter, the fraudulent subscriptions, sought to be set aside,, confer no right on the corporation;, they are absolutely void; they cannot.be enforced by the-corporation. And even.if this were otherwise, the corporation could not elect, to enforce them, as against the rights of the complainants., Brpmleyv s. Smith, 1 Simons, 8..
In the cases relied on by the defendants below, the question was of the application or misapplication of the corporate funds; and in such cases, the.- corporation was held- to be a necessary party interested, in the question. It is. also noticeable that they are all cages of established and organized corporations. Here is. the-case, admitting, the corporation to be in esse, of an inchoate corporation not yet organized. And it is a case where the presence of the corporation seems wholly unnecessary. The ob-. jection seems wholly and purely technical and pot entitled, to much weight. Gray vs. Chaplain 2 Sim. Stu., .267; Hitchens vs. Congreve, 4 Russell, 562;, Gable vs. Miller,. 10 Paige, 627; Haight vs. Day, 1 Johns. Ch. R.,. 18;., Meads vs. Walker, Hopkins, 587; Walker vs. Deveraux, 4 Paige, 229; Philips vs. Wickham, 1 Paige, 590. The foregoing are all cases of corporations, having more or less similarity to this case, in none of which was the corporation a party.
3d. If in. esse and a necessary party,.the corporation, is sufficiently before the Court.
As has been already shown, the corporation is a mere-formal party. It is merely writing the formal name in the bill. It is not; substantially bringing any new party-into Court. The corporators, the complainants, are in. Court: the claimants to be. corporators by the• subscript-lions we. seek to impeach, ap.e in Court: the commission?- ars, whom we claim to be the officers, if the Corporation is in esse, are in Court: the assumed directors are in Court; what else is there to bring into Court 1 Nothing but a name. What is gained by bringing this name into. Court I The defendants’ counsel below answered this question well, by a ludicrous description of the rival answers and defences of the commissioners and the assumed directors, both claiming to be the officers. Because, if the corporation is in esse, the commissioners .should act as the directors. How much weight should be attached to such an objection may be seen in the opinion of that master of equity, the late Judge Story, in Wormly vs. Wormly already quoted.
On the whole we do not think the objection well taken:; but, if well taken, it cannot sustain the decree dismissing the bill.
Fouiith-. — That the complainants have no right to prosecute this bill.
This point involves the question of the right of the complainants to exhibit the bill on behalf of themselves and-all others bona fide subscribers to the capital stock.
The bill alleges the stockholders to be very numerous and unknown -to the complainants, and shows a case of common'right in the complainants and all others, whom they claim to represent. It is unnecessary, that all of the stockholders should be parties. In equity a few of a large number, having a common right, may maintain a bill in aid of the common interest, on behalf of themselves and their fellows. Story's Eq. pi., 112 to 129, Sec. 107 to 128; Fonblanque,%Q7, marg. p.; Mitford’sEq.pl, 108-9, jnarg. £>.'■; Gray vs. Chaplin, 2 Sim. &f Sta., 267; Hitchens vs. Congreve, 4 Russ,, 582; West vs. Randall, per Story, X, 2 Mason, 193; Wood vs. Dummer, 3 Mason, 508. Even when a majority of those interested are opposed to the suit. Bromley vs. Smith, 1 Simons, 8.
The argument in the Court below on this point we understand to bo this: That there was a right of election on the part of the corporation to reject or to enforce the fraudulent subscriptions, and that therefore there was no common right in the stockholders. To this we give two answers:
1st. There can be no right of election in fraud. Any one of a number affected- by a fraud has a right to resist it; and no number-of others equally affected by it, can elect to sustain it and make a profit of it. These, subscriptions are a fraud on the complainants, and even if every other stockholder, or the corporation, sought to enforce them, the complainants have the right to impeach them. Bromley vs. Smith, I Simons-, 8.
2d. The subscriptions are absolutely voidandcannot be enforced. The charter-requires the payment of one dollar per share on subso-ription. The bill chai-ges all of those impeached subscriptions to have been made without such payment. And they are therefore wholly fraudulent and void. Jenkins vs. Turnpike Co., 1 Caine’s Cases Sd; Turnpike Co., vs. Henderson, 8 Sergeant & Rawle, 219-; Leighty vs. Turnpike Co., 14 Serg. & Rawle, 434;- Crocker-vs. Crane, 21 Wend., 211.
If these subscriptions cannot be enforced against those making them, a. fortiori, they cannot be- enforced by any right of election against the co.mpkinants- whose rights they are in fraud of. In. any view these complainants have a right to maintain this bill. For many reasons already urged, the corporation — even if in esse — could' not be complainant to enforce the rights of these complainants.
The bill shows .that the commissioners have wholly refused further interference, unless directed by the Court; and as to the assumed directors, they are mere intruders without color of right, and are part of the machinery of the confederacy against the rights of the complainants.
If there be a corporation the bill discloses enough to show that our complainants could not use its name as complainant.
But this bill is framed in this respect precisely like the bills in many similar cases already cited.
Having thus disposed of the. special grounds of demurrer assigned, we shall next proceed to consider the equity' of-the bid.
To sustain the general scope of- this bil^ we. rely on, three great grounds of equitable jurisdiction;,
1st. Partnership.
2d. Trust.
3d. Fraud.'
I. On the ground of partnership, equity assumes a juris-' diction in all matters involving the partnership relations, ^vhich is practically exclusive. 1 Story’s Eq.,~ 612, 631'
The relations of corporators in an actual corporation, established for private profit, are very much the same as the relations of partners in an unincorporated company; and this has been stated on very high authority. Per Sewall'J., 3 Mass., 377; Seclgwiclc, J., do., 382; Parker, C-. J., 12 Mass., 264; Walworth, C., 3 Paige, 232.
But this bill does not present the case of an organized corporation; it presents the relations of the subscribers to the stock before the organization of the company. And before that organization they stand in the same mutual relations us stockholders in a joint stock company. A joint stock company is organized on the same general plan as a corporation, and they differ only in this, that the former ■exists only by mutual agreement. A corporation is a joint stock cofnpany by charter of law. A joint stock company is a corporation without charter. Ile're is no organized corporation till election; and all the jurisdiction of the Court in relation to joint stock companies applies to .them.
Now, as it has been seen that corporations are considered quasi partnerships, so joint stock companies are dealt with as mero partnerships. Story’s Partnership, 254.
Here is a case of contributors do a common fund, for equal profit and at equal risk; so far they stand as partners in a joint stock company. Neither are they corpor-ators, for there is no organized corporation. The corporation may never be organized; and for all purposes of equitable jurisdiction, they stand together in the relation of a partnership. But the cases make the analogy stronger than this. . In England these joint stock companies, without being strictly incorporated, are licensed and their powers and duties defined, by act of Parliament, as quasi corporations. And the Courts of equity there deal •with them as partnerships and sustain such hills as this. Gray -us. Chaplin, 2 Sim. & Slu. 267. Hitchens vs. Congreve, 4 Russ., 562. And even in the case of a regular ■corporation. Adley vs Whitstable Co., 17 Vesey, 815.
We see no sound distinction between these cases and the case before the Court. They are equally cases of subscribers to the stock of companies organized under act of the Legislature; and t'he bñly 'difference is in this, that, here -there is a capacity to become a- corporation, which-capacity, however, has never been and may never be exercised. We think, therefore, that if there were no other ground of jurisdiction in this Court over this case,-it would take it on-'-the .general ground of jurisdiction -to regulate and control partnership relations.
II. Equity takes, exclusive jurisdiction of the administration of trusts, ..express or implied; this is one of the most comprehensive grounds of equitable jurisdiction; ¡whenever one intrusted with the administration of the property of another, has abused or is about to abuse such trust, equity will grant relief to the cestui que trust. 2 ■ Stay’s Eq., 228, 29, 30.
We assume that the funds subscribed to the stock of this company are a trust fund; of which the complainants and their fellows are cestui que trusts and the commission-, ers, in the first instance, the trustees. The funds were the complainants’funds, when paid; remained beneficially-theirs, after paid, although they became vested in the commissioners, and the commissioners held them for the use of the complainants. The .commissioners had the legal title,; the complainants .the equitable and beneficial ownership. This is the exact definition of a trust. 2. ,Story's Eq-., 230. Nor is it any new doctrine, that cor.porate funds are a '.trust in equity, which the Court will -control and preserve. 2 Story’s Eq., 498-9; Jltl’y Gen. c/s. Utica Insurance Co., 2 John.’s Ch. R-, 388 to 389; ■ Wood vs. Bummer, '3 Mason, 311. Robinson vs. Smith, -3 Paige, 222; Mumma vs. Potomac Co., 8 Peters, per Story, J., 286; Charitable Corporation vs. Sutton, 2 Me., 400, 6,
..In Attorney General vs, the Utica Insurance CoChan'- cellar Kent doubted, if that Court possessed tho extensive jurisdiction over corporations, which the English Court exercised; but he strongly affirms the jurisdiction on the ground of trust.
Thus we think it established by the force of reason and authority, that these funds are a trust fund, the. due administration of which this Court will protect. And the whole argument is greatly strengthened by the, fact, that the corporation is not organized.
Now, here is a charge, that men having no title to the character of trustees, have fraudulently ousted the trustees, the commissioners, and are about to obtain unlawful possession of the trust fund, o.f which the complainants and their fellows are the cestui que trusts. And no Court of equity ever refused to interpose its authority in such ease, except on some scruple about jurisdiction, of which there can be no doubt here.
III. Fraud is the great ground of equity jurisdiction; and Courts, of equity may be said to possess a general, and perhaps, a concurrent jurisdiction with Courts of law in cases of fraud cognizable in the latter; and exclusive jurisdiction o.f fraud beyond the reach of the Courts of law, 1 Story’s Eq., 194-5. Definition of equitable fraudar— 1 Story’s Eq,, 196 to 199,
Even judicial proceedings are not in equity exempt from impeachment for fraud. 1 Story’s Equity, 256; Kennedy vs. Daily, Sell. & Leaf., 355; Borden vs. Mich, 15 Johns. R., 121.
It would seem from a mei'e reading of this bill, unnecessary to argue this question of fraud; for the acts of fraud are many, actual, palpable and gross.
The several acts of fraud charged, and for relief against which this bill is filed, are all palpably fraudulent in themselves. They are attended by so many circumstances indicating the fraudulent intent, that it would be idle to attempt a demonstration of their character. But it is proposed to show, that they have been adjudicated to b© so.
"We charge the defeat of the organization of the corn poration, to distinct frauds on the part of the defendant Sweet and his confederates. And here the Court will bear in mind that these confederates are not merely charged with formal combination in the charging part of the bill, but with actual fraudulent combination and com cert in the stating part.
The main frauds charged are,
1st. Sweet & Co’s, subscription of two thousand sever; hundred and fifty shares coupled with the fraudulent al> straction of the certificates.
2d. Blossom’s subscription of five thousand shares.
3d, Blossom’s injunction.
4th. Wells & Co.’s subscription of seven thousand five hundred shares.
These subscriptions are all fraudulent for the non payment of one dollar on each share, as has been already seen.
The first of them, (Sweet & Co.’s,) we also contend, is fraudulent, becuuse made in secret with a fraudulent intent; and also because made to one commissioner only— the charter requiring it to be made to a majority of them.
In the Blossom subscription, the collusion between Williams, and Blossom, will not aid it.
1st. The bill charges, that no payment was bond fide, made to the commissioners, or even to Williams.
2d. If made to Williams, and by him not made to the Board of Commissioners, Blossom would be holden by his default, they-acting in collusion,
3d. If .paid to Williams at -all, it was so paid not only before the subscription was made, hut before the books were re-opened,-and was, therefore, paid-to-him as agent of Blossom, not as commissioner; for as 'commissioner he had no authority to receive it, until the books were open and tho'-subscriptions made. If so paid it was in Williams’ hands before the subscription as Blossom’s agent, and so remained after the subscription^ for no man-can pay, money-to himself. Ul-S. vs. Boyd, 5 Howard, 49.
And this applies with great force, where there was a plain juggle between the two to retain the-money from •the control of the commissioners.
Another objection, which applies to all, is this, that the ■'•commissioners had no power to receive subscriptions, - after the twenty thousand dollars were subscribed. There can bo no doubt that all those subscriptions were a gross fraud upon the charter and upon the complainants.
Blossom’s injunction was a fraud. Judicial proceedings .may be impeached for fraud, 1 Story's Eq., 258; 1 Mad-dock, Ch. Pr., 300.
Positive fraudulent intention is averred in this • bill, in the suing out of this injunction. There is no foundation in the stating part of Blossom’s bill for the injunction to restrain the commissioners from holding the election, nor is that part of the injunction in aid of any relief prayed by his bill. It is apparent that it was sought and used in fraud. The granting of it was an act of arbitrary and fraudulent paver, without a color or palliation by the law or practice of Courts of equity. All, of these acts are fraudulent in fact and in law. And they are just such frauds as Courts of equity delight ■ to grant relief against, as may he seen in the cases quoted and numerous others which might here he multiplied,. if deemed necessary.
This hill is a solemn appeal to the equities of.-the Court. And it is to he determined, whether the technicalities, which every ingenious lawyer can invoke to the aid of hold, successful and shameless fraud, shall triumph over ■justice, truth and right; or whether this. Court, sitting as, a Court of equity, will break through such specious obstructions, and render justice according to the very right,, of the case..
Corporations, such as. this was designed by the .Lfegis--lature to be, are a part of the modern machinery of public improvement by means of private capital. If such frauds as these can be.practiced with impunity, and the sufferers are referred to impracticable remedies, capital will fly from such enterprisesr and charters for. public improvement will be left without other capital -than that, contributed by these defendants to the enterprise — fraud,, falsehood, and chicane. „
On the part of the appellees the following points were made and argued:
This Court has no original or concurrent jurisdiction, with Courts of law, in.the case made by this bill.
This Court cannot exercise jurisdiction over .corporations when formed and in esse, except in cases, where the corporation abuses the trust, or perverts its powers,. or misapplies its funds and resources, in derogation of the Sights of the corporators, and applies the funds to objects: hostile to the common interests. In subh cases this Court has jurisdiction, without being indebted to legislative provision, and may exercise it. But in those cases, even the corporation must be made a party, and the existence of the corporation must be alleged in the bill. 2 Paige’s Rep., 438; 1st Marshall’s Kentucky Rep., 594; 2 Johnson’s Cli. Rep.-, 245; 5 Johnson’s Ch. Rep., 381.
It is claimed here, however, that the Statute laws of this State authorize this Court to take jurisdiction in all cases where a Court of common law could exercise it over corporations. This is denied.
The Statutes of 1841, page 36, provide that this Court “shall have power to declare the charter of any corporation to be forfeited for any just cause;” and possess the same powers upon the subject of corporations-, that is pos-sessedby common-law jurisdiction.
The whole effect of this Statute is to invest this Court with the like powers which were possessed by Courts of common-law before its passage touching corporations. But it in no sense extends those powers. It is a mere enjoyment, in common with Courts of law, which had previously possessed that jurisdiction in exclusion of thi3 Court, but does not exclude the functions of Courts of law¡
But how is this jurisdiction to be exercised? Of course through the medium of the same parties, and by a like proceeding which existed and still exists in the Courts of law — adopting, in this Court, a bill in the nature of an in* formation, instead of the mandamus in the Court of law.
A change or extension of jurisdiction, did not change either the parties or the order of procedure, as it before existed at common law; nor does the act profess to do so by its provisions.
It is also claimed that the Statute of 1846, page 85, has made a new provision whereby this Court is invested with a new jurisdiction. This assumption is without foundation, except that it is a' re-affirmance of the Statute of 1841. It specially provides that the Attorney General shall be the actor in all proceedings taken by virtue of that act; and is so far an exposition of what the Statute of 1841 was. The Statute of 1841 was silent as to who: the prosecuting officer or agent should be; but this Statute renders that certain and definite.
If the corporation was in esse at the time of the filing the bill, then this suit cannot be carried on or maintained for the objects it has in view, in the name and under the direction of the complainants in the bill. See authorities before cited, and also 19 Johnsons Rep., 456 and 474.
A corporation was in esse from the moment one thousand shares were subscribed in the commissioners’ books, and one dollar on a share paid; and the act of incorporation clearly makes that "the contingency upon which its formation shall depend. See second section of the act of incorporation.
By another section the commissioners are bound to issue certificates of stock to all subscribers under their administration, qualified as therein stated.
By another section they are made directors, pro tempore, so soon as one thousand shares are subscribed, and are required to perform all the duties of directors until an •election shall be held.
There arose the contingency then, so soon as the one thousand shares were subscribed and the money paid, whereby the-corporation was formed — and simultaneously with the happening of such contingency, the commission* ers were* of necessity invested 'with tile' franchises of the corporation, and with a new* distinct and executive power and .relation, as directors.
They, might have resigned such office; .huf they did not;, nor: did, they accept it; because that would, have been, an act of, supererogation. They became,-such, by the provisions.ofithe act* when the contingency specified therein, happened;. But they did meet and transact business.after the contingency happened; and did .give and. publish the notice for an election of directors, yvhich latter act could, not; have been done until the contingency had happened? which made them directors.
There was, .then, not only a corporation, with . officers who were • possessed of its franchises, but, also officers Who were -engaged in acts which were official, and which none others-,were empowered to perform, They were-, then, deface and de jure directors, and the corporation in active being.
These commissioners are still:oiBcers,-as commissioners, and for nothing else, unless th.ere.has been elected another set of directors .on the notice given for that purpose by them. They have not been. ousted of their, offi.ee by force, or by any other means,..nor.co.uld they hgYe been, except by an, ejection, or by the judgment,of, a Court having jurisdiction for that purpose.
Neither of these acts are. alleged to have .occurred, except the bill sta.les-.that the acting directors .claim to have been elected as-sugh: but no force.has been, employed. The commissioners; h,ave voluntarily-abandoned all claim to the place.
They were possessed'of the-book's* papers and other franchises* which are alleged .in the bill to be now im the- the possession of the defendants, who are acting as di¿-.. rectors, and who must be presumed to have, acquired the possession of such franchises in a peaceful w;ay, aqd with,,, their consent; and the contrary is not alleged.,. There is>. no alternative but to conclude that an active and legal* corporation exists. No matter whether the commissioners or those who are exercising the functions and,are possessed of the franchises, are rightfully in place,, for the purpose of the point made here. That fact being established, the corporation must be made a party complainant or defendant. No stockholder or number of stockholders c.ould take proceedings in this or any other form to oust the directors unless they are, or. assume to be such. Nor c.an that be done by any body except upon the informa--, ti.on of the law officer of’the State.,,
Nor can any stockholder entertain a bill in this,Court?] with or without the aid of the Attorney General against1-, a corporation, except for the abuse of the, trust confided to- its care, or for a fraudulent dissipation of its franchises.
The moment the .corporation was., formed, the State became interested in itsfacts-.and the guardian of its common franchises, and it will guar.d and protect its rights, and direct, control, andregujatp its operations in the same way that it,,would any other State interest, .for the common good of .all. The State created it, and it will unmake it if need be, to subserve a public good; and by and through its own officers claims, and will claim to exercise &. supervisory power of control. It was upon this basis that .the principle came into practice, that the State officer shquld conduct proceedings as against corporations.
But the bill alleges enough, and the facts therein stated show that a part of the defendants are the directors of,, the company, and are exercising the functions of such office, and are possessed of the franchises of the corporation — at least to an extent to require proceedings to be instituted against them, to oust them of the possession of ‘the franchises; and to 'terminate the exercise of official functions, by them, if they shall be found to have possessed themselves without authority and in violation of law.
One in possession of the franchises of a corporation and discharging the duties of, and claiming to be an officer of such corporation, is deemed to be rightfully in possession until the contrary is declared by the adjudication of the Courts, under a proceeding by quo warranto, by the law officer of the State. This Court, then, has no jurisdiction.
The bill is multifarious-, both as to the matters stated in it, and also in its prayer.
1st. It contains various allegations of fraud on the part of Blossom, Sweet, Davis, Williams, and others, to obtain by those acts the power and control of the corporation, and alleging combination as between them.
2d. It alleges that Wells, Ludington, Weeks and Kneeland also combined and confederated together .in making subscriptions to acquire the power and control of the corporation; but that each of the alleged conspirators (that is each of the combining parties) were acting for themselves disjunctly and without privity, either of action or design. Nay, that the action in that behalf, by Wells and others, was a counter plot, antagonistical to that of Blossonrand others, and having in view to defeat the designs of Blossom and others, while at the same time they intended, if successful, to have appropriated to themselves Sthe control of the company’s affairs.
-The.charges in the bill against each set of these parties, impute fraud; but not any unity or concert of action, as between themselves. Now, if one alleged combining party should have had one object and purpose in view, and that was the prompting motive of their acts; and the other of such alleged combining party should have' had another object and motive in view* in their alleged fraudulent acts, we fancy it would not be pretended by any. sound lawyer that a joint action could be maintained against both fraudulent actors, without showing combination, concert and unity of action-. Nor would the case be ■ relieved at all,|b.y showing that both conspiring partie's had the same purpose in view, but not to be enjoyed in common, and not to be brought about by any joint action.
Two men design to commit murder on a particular individual; but there is no concert. The one effects the object before the other is at hand, or does any overt act. Can the two be convicted of the crime of murder without proof of concert! In this the bill is multifarious, for the cause that two matters and two issues are to be tried, which, though the same, as between the complainants, are not the same in effect, as between all the dea fendants, and draws in question matters in which both \vere not actors or privies, as between themselves.
It is multifarious also in another form. The allegations in the bill, as respects the means employed by one of the alleged conspirators, are diverse from those employed by the others, and neither having any connection with the ‘other.
3d. The bill prays that the persons (part of def’ts) who are acting as directors, may be decreed to suspend their acts as such directors, and to yield up and deliver to- the -defunct “ commissioners,’* who 'are a part of this defendants, the books, papers, and corporate franchises which they have in possession.
This part of the bill and prayer asks , for, and claims a decree and the action of the Court, distinct from ihai which is ashed for, as against the oilier defendants.
Bat what is most singular and anomalous is that the bill prays that the defendant commissioners, who are charged with acts of wrong in regard to the assumed rights o'f the complainants, should have a decree in their favor, conferring upon themj power and place,” and re-. storation to an office which ,has become extinct,.
If it became material to any of the pretended rights of • the complainants that the commissioners should be restored to their office, it should have been upon their solicita-. tion, and as. complainants in the bill.. If it did not so become material, they should not have been made parties., at all.
How. can the Court enforce the action of the commis-. sioúefs, should,this resurrection of a defunct office be decreed to them, or what power has this Court "over them to compel them to .action.
4th. This.bill is multifarious, both as to parties and objects, inasmuch.as.it asks for others than the complainants á decree in their favor.- It is an absurdity on its face. Besides, it asks.for a decree which, in this particular, cannot be grante,d:as against the other defendants.
The decree ousting-ope part of the defendants from off fice is one thing; and.the ousting into office another part of the defendants, is,another thing. But to do this would be to make distinct and separate decrees as relates to parties holding diverge and opposite interests. If any-, ’thing can be callej.multifarious, I think this Jo be such..
The rule’that a bill is not multifarious where the same decree can be made against numerous parties, though "some of them’have distinct interests from the others, is 'violated here, because the decrees asked for, are diverse, •disjunct, and not affecting'the rights and interests of the defendants equally, but in-'antagonism to each of them.
'5th. But the bill is multifarious in another particular.. It prays as against Blossom and others, who are not ac.t-ing as directors, a forfeiture and surrendry of their sub'scriptions and stock. This affects 'those individuals in Rheir pecüniary and persdhal interests. . .
It prays of those, or paírt of those, who act as directors, ■ a like decree, and in addition to that, an annulment of 'their office as directors, and hence, affecting them unequally and diversely. This cannot be done without 'transcending the rules of pleading, and is multifarious most palpably and grossly. 5 Paige, 65; 1st Simon's and Stewart's Rep., 108; 4 Randall's Rep., 74; 5 Connecticut 'Rep., 86; LiiteU’s Select Cases, 320; Story's Equity Pleadings, from section 271 to 282; 1st Turner and Russell’s •Rep., 297.
There is no real equity in the bill set up in behalf of the •complainants touching or relating to their ¡pecuniary inter «rests. ’They do not complain that they have been deprived of all the -stock for which they subscribed; nor ■that they were restrained from subscribing all they chose. They do not pretend that the directors are squandering the franchises of the corporation, or misapplying any of its resources. On the contrary, the bill alleges that they are making contracts for the building of the road, and that they intend to build it; and that, for that purpose, they are endeavoring to get and apply to that object, the funds belonging to the corporation. This hill does not assume, or pretend, that, as yet, the dirtectors have possessed themselves of a single dollar of the monies paid in to the commissioners by the complainants; nor do they in any way impeach the integrity of the defendant directors, in any act they have done, or are about to do, as directors of the corporation. Nor do they in any way complain of wrong except that the power of control is vested in others, and not in themselves. Personal love of' power and denunciation 'of its possession by others, is the very heart and soul of their complain-|ngs.
Declamations of intention of ‘‘personal aggrandizement and fraudulent gain” on the part of the defendants, and such like euphoneous declamation, said and sung throughout the bill, from its address to its finale, make up the mighty emptiness with which it abounds; and give a spice of'brilliant and poetic beauty, which is rarely found in legal papers where wrongs and injuries are detailed or rights bereft. We can well suppose that mortified pride and humbled ambition, enter largely into the creation of this legal engine, the bill. But the best scrutiny which we have been enabled to make of its solid legal contents, has not enabled us to discover that wrong has been inflicted or tight withheld.
Here was an open corporation, whereto all, from the highest to the lowest, could subscribe for its stock at pleasure, and free of all restraint. The whole power and control of which might have been secured to the complainants, if'their liberality had borne any just proportion to their cupidity. But they feared and doubted and hesitated, lest they might sink a penny instead'of gaining it, ani.il the lucky moment passed, and the power- became vested in other hands. Then envy arid- hatred, if not mah Ice, incited them to endeavor to put an end to the.project-. ed improvement, by a suppression of it, through the me-, dium of this bill.
It is denied by the defendants that there can exist legal fraud in the case made by this bill, if it were to be regarded as true.
There is no allegation that any one of the complainants made a subscription upon any representation made by any one of the defendants, who had any official pledges which he could give, or they believe, if made; or if any assurances had been given was it a nudum pactum, and could never be treated, in a judicial sense, as fraudulent, though not performed. Because certain individuals have made large subscriptions and have thereby obtained the power of control, it was their right to acquire it. It was in the power of the complainants to have done the like. What prudent man would embark his funds largely in a joint stock company, unless he knew in what hands its control would be vested. What better right is there of control, in a case like this, where an individual or individuals have a large interest at stake 1 We know of none. And unless that control is used to the injury of minor interests, there is no wrong. This bill is not verified so as to give it credence in this Court, nor in accordance with the usages and requirements of the Court.
No one important statement or allegation in the bill, is alleged upon the personal knowledge of the only com--plainant, who personally signed and swore to the bill. Those allegations are almost uniformly made upon his lt information” only, and in other instances, upon his “be lief,” and in'other instances upon his “ irfformation anfi belief.” But in no instance does he give the name of his informant; nor is there annexed to the' bill any' affidavit of any other person froto whom he derived his itíforto'ation;. nor is there any excuse for not having obtained it. 'Mere information and belief of a party complainant, "is insufficient to procure an injunction where it 'is prayed for in such a bill; because that '.is not the’best evidence, or anij. evidence of the truth of the facts alleged, to authorize the action of'this Court. In case ?ihe complainant does not know the facts, of his own knowledge, he should procure’and annex to the ’bill, the affidavit of his informant, of the truth of the matters alleged. 4 Paige's Reports, 242; 7 do., 160; S>do., 315.
I do no't assume that on the pending motion this objec'tion can be taken to the extent it could be in resistance of the allowance of an injunction, or on a motion to dissolve an injunction, where one had been improvidently -allowed, in such a case. But we do assume that if the Court would not grant or allow an injunction, on a bill so sworn to, the reason would be, because it imported no legal, substantial verity, whereon the Court would grant the summary process of injunction. The same ..rule will apply on this motion, to weaken, though it may not destroy the efficiency of the bill, in its stating matter. The Court cannot, if it reads the bill, but see that the party-swearing to it, could escape a conviction for perjury, regarding almost every allegation made, though the matter of fact should be untrue. He “ believes,” or “is inform-, ed and believes.” Though the facts set forth may be false in fact, yet who can charge the oath-maker with perjury, as to his belief or his information, and belief of 'iheir truth I If the complainant had not made the hill, filed by the defendant Blossom, and the proceedings there■on had, evidence in the case of this bill, we could nos ‘have used this reasoning in this motion. But that bill was made use of in the case before Judge Larrabee, and is ■charged in this bill as having been fraudulently’filed, and that the integrity of this Court was prostituted in. the allowance of the injunction therein prayed for.
The reading of the bill filed by Blossom is, therefore,, evidence here; and by its own showing, it will 'be seen whether the bill was filed and the injunction fraudulently obtained to further and aid the “ personal aggrandizement and fraudulent gain ” of the defendauts herein.
If that bill, on its face, presents a case of equity, and that upon it this Court would have decreed in accordance with its prayer, then the allegation in the bill of the com--' plainants herein,' is false or mistaken in the particular of its allegations concerning Blossom’s bill. The bill here-* in makes Blossom’s bill evidence.
It must result, that if the Court can see a plain case of equity in Blossom’s bill, it must disregard all allegations contained in the bill herein; because no material fact is alleged in this bill of the acts of Blossom, except what appear in the bill itself. If the corpplainant’s bill is impeached by the evidence which itself furnishes, in its own vindication, such evidence operates to impeach its statements in other particulars. “ Falsus in uno,falsus in omnibus,” applies in this case.

Opinion:
By the Court.
?Stow C. J.
The bill in this case was. filed by the complainants (about twenty in number) for themselves, and all others alleged to be bona fide stockholders of the Milwaukee and Janesville Plank Road Com pany, claiming to hold one thousand' shares of the stocky against the defendants, charging certain of them with a combined fraudulent subscription of seven thousand and seven hundred shares, and others of them with a combined fraudulent antagonistic subscription of seven thousand five hundred shares ; a fraudulent suing out and abuse of an injunction from the Milwaukee Circuit Court., (in which the bill was originally filed,) by-Blossom, in confederacy with the defendants Sweet, Da,vis, Hibbard, Webb and-Williams, by which the commissioners appointed by- the act of incorporation, were restrained-, from-, dis~. tributing the stock and organizing the company; and; that through the instrumeta-lity of that fraudulent process and proceeding, the defendants, Sweet, Webb, Greves, D.avis, Taylor, Hibbard and Chandler, have possessed themselves of the books and papers of the commissioners, (who, until after the election of directors, were, by the act, to be officers of the corporation,) and assume to act as the directors and officers of the company. The bill-states that the commissioners, obeying the mandate of Blossom's fraudulent injunction, have ceased the exercise of their office; and that the complainants and their fellows are the only bona fide stockholders of the company; and prays that the alleged fraudulent subscriptions be set aside and declared void; that the pretended organization of the company, by means of the fraudulent use of Blossom's injunction, be declared void; that the defendants assuming to act in the name of the corporation, be restrained from prosecuting certain suits for the collection of the subscriptions, &c.; and that the commissioners be declared, for the time being, the officers of the company, and be reinstated in the possession of its books and effects;. and for general relief. The defendants, Sweet, Davis, Webb, Hibbard, Blossom, Williams, Clark, Green and Taylor, demurred, and assigned as causes of demurrer—
1. That the bill is multifarious.
2. Want of jurisdiction in the Circuit Court.
3. That the corporation should have been made a party.
4. That the complainants have not a right to prosecute for themselves and fellows:
The Circuit Court overruled the demurrer as to multifariousness, and sustained it as to the other causes, and dismissed the bill. To reverse this decree of -the Circuit, the complainants have appealed to this Court.
I shall consider the questions arising in the case, in the order in which they are presented by the demurrer. But, before doing so, I will dispose of an objection which has been made ore tenus, which is, that there is no equity in the bill.
It has been contended, on the part of the defendants', that the bill discloses a corrupt agreement between the complainants and the commissioners, to get control of the company by means of a trifling subscription, and to use it for the purpose of private speculation, to the injury of the public. I can by no means say, that the bill shows the complainants to have acted from public'spirit, or in a manner particularly commendable. But on the other hand, I do not think it shows any such fraudulent agreement or purpose, as to exclude them from a Court of equity. Private speculation was, doubtless, with most of them, the leading motive; and the directibn of the company was probably regarded as an important element of success. But there was not any thing necessarily, or «by-%ir -itti plication, illegal in this; and to close the doors. ' of-equity against the complainants for this reason, wo did he in effect to "shut out from the Court of Chancery, most'istockholdets .of incorporated companies.
The first causfe-mf demurrer is mullifariousness. The -'bill-sets-up a general right on the part of the complainarits and their fellows-against all the defendants; and charge's 'that -alhthe defendants, except the commissioners, claim fen fraudulent subscriptions, or by means of Blossom's fraud* dulent'injunction; and that the commissioners have aban* doned their duty-to the bona fide subscribers, in obedience to that injunction. Though the transactions of the several defendants are -various, and some of them not necessarily connected,'they are all charged'(with the exception df'-the subscriptions of Weeks, Wells, Ludington -and Knedland) to be the work of one concerted confederacy, and the result of oae common scheme to defraud the complainants. The subscription of Weeks and his asso* ciates, is alleged'to be fraudulent, and to have-been made in antagonism to the fraudulent subscriptions of Blossom and his confederates, and as it «respects the complainants, for the same purpose as theirs — the defrauding ihe bonafi.de stockholders. The objection now under consideration, has been mainly urged on the grounds that the subscription of Wells and his associates, so far from having been made in concert with those of Blossom and his associates, is shown by the bill to have been made in hostility to it, and that, therefore, no common liability on the part of the two adverse sets of fraudulent subscribers exists. That there was no community between these different and adverse defendants, as it regards themselves, is very clear; but it by no means follows that there is not such a privity in relation,,to- the complaipants, that the wrong which they have perpetrated for the same purposp, at the same , time, and by the same means,, in connection with, though, in hostility to, one another, may not be rpdpessed by the same proceeding. If two are engaged in thq same felony, though they may be hostile to each other, .eaph seeking for himself the sole advantage, they are.privies as it regards the crime, and may be prosecuted jointly. Looking at the whole of these transactions, as stated in the bill, and admitted by the demurrer, I am of opinion that there was such a connected, though not confederated fraud, on , the part of thq, complainants, as subscribers, that they are properly joined as defendants. It is further,-contended, that the defendants Grevesjand-, Taylor,.not being parties, to the original confederacy and. having no connection , therewith, ought not to be made defendants, .and cannot be required to answer. The bill shows these parties to , have come in by means of the .operation of the fraudulent • injunction, and if so they are answerable with the origi-. nal confederates thereto; and. besides, tire bill specially - charges them with combining with Blossom,, apd his as-. spciates; and as these have no.t denied,, by apswer, this-, c.harge, they cannot avail .themselves of this-ground of, demurrer.
2. Want of jurisdiction..
' In support of this objection, the defendants contend ¡that • the bill shows a corporation .in.existence, and that, certain of the defendants are its officers de jffiqto;--and.that being so, they cannot be removed at thq spit,of-'private individuals,.but must be proceeded against by the government. In the view, I take of this branch of the case, it is entirely immaterial,whether the corporation is now in actual exis tence or not. The bill states, that for the purpose of defrauding the complainants, and preventing the commissioners from distributing the stock and organizing the company by an election of directors, Blossom, in confederacy with his associates, Sweet, Davis, Hibbard, Webb and Williams, filed a bill, which was false in all its material allegations, against the commissioners, and thereon obtained an injunction, restraining them from distributing the stock and holding the election of directors; that the service of the injunction was delayed until the confederates had, by a trick, possessed themselves of their certificates, when, in pursuance of a pre-concerted signal, it was served; that the commissioners thereupon abandoned their trust; and that, thereupon, the defendants, Blossom and his associates, possessed themselves of the books, &c., and claim to act as the directors and officers of the company; that the confederates, having effected their purpose, Blossom discontinued his suit; and that the filing of Blossom's bill, the procuring the injunction, the fraudulent use made of it, and the discontinuance of the suit, were all parts of the conspiracy to defraud the complainants, and deprive them of their rights; and that the injunction was the instrument by which this was effected. In this state of things, the complainants, as the parties in interest in Blossom's suit, claim that they have a right to the aid of that same Court, by the abuse of whose process they are suffering, to relieve them. A claim, in my judgment, so obviously just — so well founded both in legal equity and natural justice — that it needs only to be asserted to be conceded.
The parties complain, not that the defendants have invaded the 'sovereignty by usurping a'franchise, but that they, the complainants, have suffered a private injury, which has been perpetrated by the abuse of the process oí a Court of equity; and they ask the same Court to correct 'the wrong it has unintentionally committed, by restoring "them to the condition in which it found them. And can it be that such a prayer as this, is not to be heard, because, forsooth, the Attorney General docs not choose to prose? cute for the incidental evasion of the rights of the public l I think not By the discontinuance of Blossom's suit, all things were theoretically restored to the state in which they were at the time of the filing of his bill; and it was the duty of the Circuit Court to have so restored them in fact, either by an order in that suit, or a decree in this. Had the commissioners disregarded fhe injunction, and held an election, at which directors adverse to Blossom and his associates had been elected, and who thereby possessed themselves of the franchise; and had Blossom prosecuted his bill to a final decree in his favor, would not the Circuit Court, in vindication of its violated process, have summarily displaced the contumacious intruders! and would it have listened to a claim on their part, that being in possession of a corporate franchise, they could be ousted only by a quo warranto 1 I take it that our Circuits, made by the Constitution superior Courts of record, and vested, by that instrument with greater powers than were probably ever before, in a free government, delegated to any one tribunal, the united powers of the English King's Bench, Common Pleas, Exchequer and Chancery — will never prove themselves so impotent and complacent. And if the Court would have thus summa rily dealt with one .set of intruders, who had defied its mandate, has it not tfye same power,, and ought it not to exercise it over the adverse set, who have got possession by means of a fraud upon the Court itself, and by the abuse of its process 1 To disqlaim this power, or to withhold its exercise, I regard as a flagrant denial of Justice.
It is very certain that had Blossom's bill been prosecuted, the.court would not have hesitated in that suit to rectify the . injury it had been made the instrument of inflicting; these-. cpmplainants would have had the right of filing an original : bill, such as this, in the nature of across bill: Jones v. Jones, 3 Atk., 110; Hoff. Chan. Prac., 319 or 349: and the Court. would not have had an objection to its jurisdiction to,coprqc£ its .own involuntary wrong. It is equally certain, to..my - mind, that the mere discontinuance by Blossom, of,his suit, cpuld not operate to deprive the Court of such jurisdiction. Parties cannot be tolerated in playing this fas£and,loose game with the authority and jurisdiction of Courts., The jurisdiction which Blossom and his confederates conferred upon the Circuit by the filing of.the bill, and the abuse of the injunction, cannot, when they have .profited by it, 'be withdrawn at their pleasure. Iti.must of necessity, abide in the Court until it has -placed the injured parties in as good a situation as it found them.
Again: by the fraudulently sueiqg out, and abuse of the-injunction, the dignity, of the Court itself was attacked; and.¡ the inherent power of (self-preservation gave it jurisdiction, to vindicate itself, and its suitors, by its own process. This is not a,question, exclusively,ofdndiyidual rights; it involves,, io some extent the character and good faith) of the Court. And it is necessary for the maintainance of that public confidence in the impartial and equal administration of justice, so vitally essential to the usefulness of all judicial tribunals, especially in a Republic, that s«¿ph abuses of the power and process of the Court, as are her^ disclosed, should find a remedy as speedy and as simple as the abuse. I am, therefore, of opinion, that the Circuit Court had jurisdiction in this case; and that the decision of the Judge sustaining the demurrer for want of it, was erroneous, and should be reversed.
It will be observed, that in coming to the conclusion at which I have arrived, I have 1 had no reference to the Statute of 1841; nor do I undertake to decide the general question, whether persons acting as directors of a private corporation, like this Plank Road Company, can be dis-. placed at the suit of the corporators, without the interven-, tion of the government. I have formed my opinion on the-, peculiar-and extraordinary facts disclosed in this c.asg., L have not searched for authorities, because I have not deemed them necessary; nor is it probable that any, could, be found in point; for it is believed that the nefarious, transactions presented on this record, ar^ a§,much without precedent, as it is to be hoped they will be, without imitation.
The third cause of demurrer is;, that, the Milwaukee and Janesville Plank Road Company should have been made a party.
I think the objection a good one.. It is somewhat difficult to say at what precise time, or in what particular stage of its proceedings, this, association had, or would have, a legal existence a,a-, a- corporation; probably not until its formal organization by the legal, election of directors. The bill, however, shows that it is acting as a corporation and exists defacto', and that certain of jhe defendants claim to be its officers. This is enough to entitle it to be made a party in this suit. It has been contended with some plausibility, by the counsel of the complainants, that the corporation, being a mere formal party, is sufficiently before the Court in the persons of the commissioners, and of the defendants who claim to be directors! He says i- the corporators, the complainants, are in Court; the claimants to be corporators by the subscription's we seek to impeach, are in Court; the commissioners, whom we claim to be the officers, if the corporation is in esse, are in Court; the assumed directors are in Court; what else is there to bring into Court 1 Nothing but a name!" Precisely so. But that name is everything to the corporation; by it alone, it exists and is known; it cannot be described by any synonyme or circumlocution; its name is itself; and eo nonime, it must appear. The decision of the Circuit Judge, on this point, I think, was correct. But as the complainants should have been allowed to amend, fey making the corporation a party, the dismissal of the bill, for this cause, was erroneous.
The last cause of demurker is, " that the complainants. have no right to sue in behalf of themselves and the other stockholders." The bill alleges that the stockholders, for whose benefit it is filed, are very nurherous, and are unknown to the complainants; and shows a case of common right in the complainants, and all Others' whom they represent. A more appropriate case '"for some of a largo-number having a common right, to 'maintain a suit in behalf of themselves and fellows,, in -aid c/f that common right," cannot well occur. I think the hill is properly-filed by the complainants, for themselves and the other stockholders.
On the whole case my opinion, therefore, is, that the decree of the Circuit Court dismissing the bill, should be reversed; and that the record be remitted to the Circuit with directions to allow the complainants to amend, by making the Milwaukee and Janesville Plank Road Company a party defendant. I am further of opinion that the process for bringing in the Company should be served on the commissioners, as the legitimate officers, and that they should represent the Company in the suit.
I add, in conclusion, that I approve of the denial of the injunction by the Circuit Judge. In a case involving such important interests, both public and private, and where delay and interruption must be attended with such serious consequences, an injunction ought not to be allowed until the defendants have an opportunity of being heard. Kipp vs. Ogden, 6 Johns. Chan. Rep. 160.
Whiton and Jackson, Judges, Concurred.
The Circuit Courts shall have original jurisdiction in all matters, civil and criminal, within this Stale, not excepted in the Constitution,1 and not hereinafter prohibited by law, and appellate jurisdiction from all inferior Courts and feibunals, and a supervisory -control over the same. They shall also have tbe power to issue writs of Jijeas .corpus, mandamus, injunction, quo warranto, certiorari,' and all other writs necessary to carry into effect their orders, judg- ' ments and decrees, and give them a general control over inferior Court» andL-j j'urisdicUons.y^Coiiííiíwriojí. q/' Wisconsin. Art,YJJ} Sec. 8.