Court Opinion

ID: 3551202
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:03:50.64776+00
Date Added: 2024-06-11T09:21:47.063810
License: Public Domain

"If an agent to sell become the purchaser, or if an agent to buy be himself the seller, a court of chancery, upon the timely application of the principal, will presume that the transaction was injurious, and will not permit the agent to contradict this presumption, unless, indeed, he can show that the principal, when furnished with all the knowledge he himself possessed, gave him previous authority to be such buyer or seller, or afterwards assented to such purchase or sale." 1 Par. Cont. 87; Pearson v. Railroad, 62 N.H. 537, 543; Fisher v. Railroad, 50 N.H. 200, 205. Relying upon this principle, the plaintiffs claim that the net profits received by George K. Paul  Co. from sales of the Swamscot Machine Company's goods belonged to the corporation, and are constructively held in trust for it by the firm; and that Paul, as a member of the firm, should now account for them. The bill was not filed until thirty-three years after the firm commenced, and twelve years after it ceased, business. The question is, whether equity will enforce the claim, if well founded, after so great a lapse of time.
In Beckford v. Wade, 17 Ves. 87, Grant, M. R., said: "It is certainly true that no time bars a direct trust, as between cestui que trust and trustee; but if it is meant to be asserted that a court of equity allows a man to make out a case of constructive trust at any distance of time after the facts and circumstances happened out of which it arises, I am not aware that there is any ground for a doctrine so fatal to the security of property as that would be; so far from it, that not only in circumstances where *Page 16 
the length of time would render it extremely difficult to ascertain the true state of the fact, but where the true state of the fact is easily ascertained, and where it is perfectly clear that relief would originally have been given upon the ground of constructive trust, it is refused to the party who, after long acquiescence, comes into a court of equity to seek that relief." To the same effect are, Townshend v. Townshend, 1 Bro. Ch. 550, 554; Wentworth v. Lloyd, 32 Beav. 467; Hovenden v. Annesley, 2 Sch. 
Lef. 607, 633; Edwards v. University, 1 Dev.  Bat. Eq. 325; Ashhurst's Appeal, 60 Pa. St. 290; 1 Per. Tr., s. 228; 2 Sto. Eq. Jur., s. 1520 and notes; Ad. Eq. 62.
"Nothing can call forth" a court of equity "into activity but conscience, good faith, and reasonable diligence. Where these are wanting, the court is passive, and does nothing. Laches and neglect are always discountenanced, and, therefore, from the beginning of this jurisdiction there was always a limitation of suits in this court." Smith v. Clay, Arab. 645; McKnight v. Taylor, 1 How. 161, 168; Sullivan v. Railroad, 94 U.S. 806, 811, 812; Brown v. County, 95 U.S. 157, 160; Hall v. Clagett, 48 Md. 223, 243; Foster's Curator v. Rison, 17 Grat. 321, 347; Harrison v. Gibson, 23 Grat. 212; Hatcher v. Hall, 77 Va. 573, 576; Lawrence v. Rokes, 61 Me. 38, 42; Royal Bank of Liverpool v. Railroad, 125 Mass. 490, 494; Snow v. Company,158 Mass. 325; Pickering v. Pickering, 38 N.H. 400, 406; Hathaway v. Noble,55 N.H. 508; Chamberlain v. Lyndeborough, 64 N.H. 563, 564; Clark v. Clough, 65 N.H. 43, 79.
Examining the circumstances of this case in the light of these principles, nothing is discovered that calls the court into activity. On the other hand, satisfactory reasons appear why it should remain inactive. The prior owners of the stock now owned by Mrs. Wiggin knew of the Boston store and of Paul's membership in the firm carrying on business there; and she learned of these facts three years at least before she instituted this suit. Considering the character and magnitude of the business transacted between the corporation and the firm, and the length of time it continued, it is hardly conceivable that any stockholder exercising reasonable diligence in respect to his corporate interests should fail to learn of the existence of the firm and of its relations to the corporation before those relations ceased. Equity will not lend its aid to enforce a claim set up after such long and unexplained delay, especially when it appears that complete justice cannot be done.
No ground is shown on which the claim concerning the real estate transferred to Paul in 1872 can be maintained. The transfer was made in part payment for services, and it does not appear that it would have been set aside in a suit seasonably brought.
Bill dismissed.
All concurred. *Page 17