Court Opinion

ID: 6420825
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:59:39.025797+00
Date Added: 2024-06-11T15:51:46.333650
License: Public Domain

0. Allen, J.
The defendants in this case do not rest their argument upon the ground, (which is covered by the decision in the preceding case,) that the treasurer had power to assign the note and mortgage merely by virtue of his office; but they contend that the records, containing the vote of the trustees, show full authority to make the assignment in question; that, as to third persons dealing innocently with the treasurer, the corporation is bound by its records as they stand; and that such third persons, who have invested their money on the faith of the records, ought not to suffer.
*184' In our opinion, the imperfection of this argument consists in this: that it is not alleged, and does not appear, that the defendants invested their money on the faith of the records. We have no doubt that the books and records of a corporation are prima facie evidence against it, as admissions ; and, under some circumstances, may be conclusive evidence. But, at the most, a corporation can only be bound conclusively by its records, either when they are the records, duly made by the recording officer, of its proceedings, or when some person, who has had proper access to them, or knowledge of them, has become aware of their contents, and has acted upon the faith that they were the records of its proceedings. And a corporation is not bound, as to third persons, by interpolations fraudulently inserted in its records, where such third persons have not acted on, or seen, or known of the existence of, the matters so interpolated and appearing to be recorded. It is not estopped or bound by such fraudulent addition, unless it is shown to have been negligent in omitting to make due correction of the records, and that some innocent third person has been misled thereby. In the dissenting opinion of Mr. Justice Dewey, in Amherst Bank v. Root, 2 Met. 522, 544, while maintaining that, ordinarily, a corporation cannot control its own records by introducing oral testimony contradicting the facts as there stated, for the purpose of charging third persons, he nevertheless concedes and declares that the doctrine is not applicable to fraudulent alterations or interpolations. See also Hart v. Frontino & Bolivia South American Gold Mining Co. L. R. 5 Exch. 111, 114; In re Bahia & San Francisco Railway, L. R. 3 Q. B. 584; 1 Lindley on Part. (4th ed.) 141, 160.
The further objection is strongly relied on, that the plaintiffs have a plain, adequate and complete remedy at law, and therefore are not entitled to equitable relief. The only legal remedies suggested as sufficient are a writ of entry, and an action of replevin for the note and mortgage. The bill contains no averment that these are concealed, so that they cannot be come at to be replevied, and no prayer that they shall be delivered up to the plaintiffs. It is certainly true, that both the bill and the amended bill are somewhat meagre in their averments; but, by the bills and answer, the main issue is distinctly presented, *185whether the assignment to the defendant Hoyt was valid or not. As it now appears, the note and mortgage were trust funds, which it was the fight and duty of the plaintiffs to get into their own possession, without delay. Hoyt claimed to own them, and had given notice of a sale of the land, which was to take place on the very day when the original bill was brought. The effect of such sale would have been to introduce a new claimant to the land. If the sale produced less than the amount due on the note, Hoyt would hold the note for the balance, and perhaps transfer it to still another person.
In order to prevent equitable jurisdiction, the remedy at law must be plain and adequate, or, in other words, as practical and efficient to the ends of justice and its prompt administration as the remedy in equity. Boyce v. Grundy, 3 Pet. 210. Watson v. Sutherland, 5 Wall. 74. It is obvious, in the present case, that a writ of entry would not furnish adequate relief. The value of the land might be less than the amount of the note. The value of the note itself, as an investment, might be greater than the face of it. Even if, under the doctrine of lis pendens, a grantee from Hoyt would have no greater rights than Hoyt, the plaintiffs should not for this reason be deprived of the more effectual protection of an injunction. Hood v. Aston, 1 Russ. 412, 416. 2 Story Eq. Jur. § 908. The specific possession of the mortgage, even if obtainable by a writ of replevin, would not be an adequate protection, since purchasers might rely on the record. The remedy by replevin is at best of limited utility in such a case, either as to the mortgage or note, and is attended with the burden of giving a bond to the defendant in double the appraised value of the property replevied. In most instances, it probably would not be found available, by reason of the difficulty of obtaining the articles without a breach of the peace. Replevin as a possible remedy has existed not only by statute, but at common law. Maxham v. Day, 16 Gray, 213. George v. Chambers, 11 M. & W. 149. 3 Kent Com. 483, note f.
But, so far as we have observed, in all the cases heretofore decided, the objection that an action of replevin would have * furnished an adequate remedy at law has been taken only in one case, namely, Sears v. Carrier, 4 Allen, 339; and it was not *186there sustained. An examination of the defendant’s original brief in that case shows that no authority was cited in support of the objection; and none has been cited in this case. Compelling the delivery up of deeds and notes has been a common method of equitable relief. 1 Story Eq. Jur. § 700. Hood v. Aston, ubi supra. Fuller v. Percival, 126 Mass. 381. Fish v. French, 15 Gray, 520. Pierce v. Lamson, 5 Allen, 60. So also of other chattels having a somewhat special value. 1 Story Eq. Jur. §§ 708, 709. And especially, “ where a fiduciary relation subsists between the parties, whether it be the case of an agent or a trusiee, or a broker, or whether the subject matter be stock, or cargoes, or chattels of whatever description, the court will interfere to prevent a sale, either by the party entrusted with the goods, or by a person claiming under him, through an alleged abuse of power.” Wood v. Rowcliffe, 3 Hare, 304; S. C. on appeal, 2 Phil. 382, 383. Under the general prayer for relief, all suitable relief may be granted. Decree for the plaintiffs.