Evans's Appeal
| Decision Date | 08 May 1876 |
| Citation | 81 Pa. 278 |
| Parties | Evans's Appeal. Kuhn's Appeal. |
| Court | Pennsylvania Supreme Court |
Before SHARSWOOD, MERCUR, GORDON, PAXSON and WOODWARD, JJ.
Appeal from the court at Nisi Prius, No. 56, to January Term 1870. In Equity.
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G. T. Bispham and E. S. Miller, for appellants.—The time which equity fixes as a bar to proceedings to enforce personal rights is six years, in analogy to the Statute of Limitations: Ashhurst's Appeal, 10 P. F. Smith 290. Here the time after the discovery of the fraud is about four years and a half. The acts which might estop a plaintiff by his delay in a shorter time, do not apply when the defendant is charged as trustee ex maleficio: Bank v. Tyrrell, 27 Beav. 29. To make an equitable estoppel, there must be some wilful, intentional or careless misleading: Commonwealth v. Moltz, 10 Barr 527; Hill v. Epley, 7 Casey 334. Where the right is vested in a large body of persons, acquiescence is not a ground for refusing relief: Hill on Trustees 170; Perry on Trusts 867; Whichcote v. Lawrence, 3 Vesey 746; Parkston v. Brewster, 14 Ala. 320; Matthews's Presumptive Ev. 452; Cumberland Coal Co. v. Sherman, 30 Barb. 574; Lewin on Trusts 473; Davidson v. Tullock, 3 Macq. 783; York Building Co. v. Mackenzie, 8 Bro. P. C. 42; Hardwick v. Mynd, 1 Anstr. 109; Kidney v. Coussmaker, 12 Vesey 158. When one creditor within six years files a bill for all, the statute will not run against any of them, but others may come in after the time had run as to them: O'Kelly v. Bodkin, 2 Ired. Eq. 361; Sterndale v. Hankinson, 1 Sim. 393; Bennett v. Bernard, 12 Ired. Eq. 233; Carroll v. Darcy, 10 Id. 321; Foster v. Mackenzie, 17 Beav. 414; Archbold v. Scully, 9 H. of L. 360; Clench v. The Financial Corp., Law Rep. 4 Ch. App. 123; Stanhope's Case, 1 Id. 161; Spering's Appeal, 21 P. F. Smith 11.
R. C. McMurtrie and G. W. Biddle (with whom was J. W. Paul), for appellees.—If an agent sells his property to his principal, concealing his ownership, the principal cannot require the agent to let him have it at what it cost him; all he can require is the rescission of the contract: Driscoll v. Bromley, 1 Jurist 238; Great Luxemburg Railroad Co. v. Magnay, 25 Beav. 586. The fiduciary relation on the ground of agency arises by inducing others to believe that they had been engaged in common project for purchasing land to organize a company: Densmore v. Densmore, 14 P. F. Smith 50.
A suit cannot be maintained by some of a class, except when all are in the same circumstances: Mocatta v. Ingelby, 5 L. J. N. S. Ch. 145; Mitford 39.
This is substantially a corporation bill. It was filed by Evans and Kuhn, who are stockholders in the Keystone Zinc Company. Some two and a half years thereafter the bill was amended by adding two other stockholders as complainants.
The ground of complaint is, that in the formation of the company both the defendants and the plaintiffs were associated together; that the defendants purchased certain mineral lands, and sold them to the corporation of which they were directors, for a sum many times greater than they actually paid for them; that the price they paid was concealed from the plaintiffs, whereby a resulting trust has arisen, and the defendants are liable to account for the profits which they have made.
The master found the evidence sufficient to establish a constructive trust, but reported that the bill be dismissed by reason of the laches of the plaintiffs in filing it. The court confirmed the report and dismissed the bill.
We will therefore consider the sufficiency of the laches and attending circumstances, to justify the decree of the court.
In March 1864, the agreement for the formation of the company was made, and the defendants entered into a contract for the purchase of the land. The necessary act of incorporation was procured in a few days thereafter. Early in the next month, the defendants obtained a conveyance of the land, and sold it to the corporation, of which they were three directors, and certificates of stock were issued thereon, in pursuance of a resolution of the stockholders. At a meeting of the stockholders, early in 1865, Kuhn swears that he obtained information "of such a damaging character to the overseer and those having the management of it, that I at once determined to take legal measures for the recovery of my money, which I considered had been improperly made use of." With that view he consulted counsel, but in consequence of other persons occupying a similar position, having brought actions on the case, which were then pending, he postponed instituting any proceedings. At another meeting of the stockholders, held in October of the same year, Kuhn and Evans were both present and participated in the proceedings. They voted their stock on the question of the acceptance of an amendment to the charter, authorizing the company to borrow money, issue bonds and secure the same by a mortgage on the estate and franchises of the corporation. It is true they voted against accepting the amendment; but that fact in no wise changes the legal effect of their action for the purposes we are now considering it. The amendment was adopted by a vote of the majority of the stockholders, representing a majority of the stock. At the same time a resolution was also passed authorizing the directors to borrow money on the security of the mortgage.
This bill was not filed until nearly four and a half years after that meeting. If the case rested on the lapse of time alone, that would be insufficient to bar the plaintiffs' rights to file the bill.
As a general rule, a constructive trust in regard to personal rights or personal property may be asserted at any time within six years after a knowledge of the facts creating it. At the expiration of that time it is barred by analogy to the time fixed by the Statute of Limitations: Ashhurst's Appeal, 10 P. F. Smith 290. But laches for a much shorter time than six years, aided by other circumstances, will bar the right: Id.
There is another aspect of this case. The relief prayed for is not that the defendants shall pay anything directly to the plaintiffs, but that they shall pay into the treasury of the corporation, whereby the plaintiffs may be benefited by the increased property of the company. The attempt is to obtain relief through the equitable rights of the...
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