PHELPS V. ELUOTT.
(Oircuit Oourt, 8. D.
York. November 15,1886.)
SUIT TO RECOVEB
EQUITABLE OWNER OF BONDS -
A suit by an equitable owner of bonds to recover the bonds, or their value, is properly brought in equity. ,
In a suit in equity by the equitable owner ofbonds to recover them, or,their proceeds, from the surviving members of a copartnership, ,all the members of which acquired the bonds with knowledge of his rights, itis not necessary to join the personal representatives of a deceased partn.er as parties defendant, . althoJlgh they would be proper parties, at the option of the defendants. 8.' A.CTION OR SUIT -JOINDER OF PARTIES - REPRESENTATIVE1S OF DECEASED A receiver, who had bean appointed in a suit between the equitableo'Wner .of the bonds and a third person to hold them pending, the determination the suit', surrendered them to the other party before the termination of the suit, , who sold them to the defendants. HeZd, that in a suit to recover their value the ..:eceiver, or, incase, of his· death, his personal not be made a party. , 4. BAmmUPTcy-LIMITATIONS-AcTION BY ASSIGNEE-BONDS f:lOLD BY BANK· RUPT-REV, ST. U. S. SEeTtoN 5057, In a s.uit in eqJlity bY' an assignee in bankruptcy to recover certain bonds, vested in him- by partIes to whom they had been sold by the bankrupt, an averment in the bill that the assignee "had no knowledge, or means of knowl·' edge, of· the, sale of said bonds until about the month of April, 1884," is insufficient to prevent the bar of the statute of limitations, requiring such suits to be brought within two years from the time the cause of action accrued. 5057, Rev. St. U. S.
, RECEIVER-SUIT IN EQUITY AGAmST SURVIVING MEMBERS.
SAME-Pt.EADmG-JoINDER OF PARTIES-PERSONAL REPRESENTATIVES OF CEASED P ARTNEll.
Deuel d Wilson, for plaintiff. Stanley, Clarke, et Smith, for defendants.
WALLAOE, J. Upon the allegations of the bill, for the purposes of this demurrer, it must be taken as true that the plaintiff, as the as,signee in bankruptcy of one McDonald, was the equitable owner of the award made to 'M;cDonald, and assigned by the latter to White, and that this was so adjudged by the supreme court of the United States in a suit brought by the plaintiff against McDonald and White in the supreme court of the District of Columbia upon an appeal from a decree in that suit to the supreme court of the United States. As the supreme court of the United States must have determined that, by the proper construction of the statutes regulating its appellate jurisdiction, it had power to make such a decree as is alleged in the bill, the question as to the power of the court, or the scope or effect .of the decree, is not open to discussion in this court. The bill also alleges tbat one Riggs, during the pendency of that :suit, was appointed a receiver by the supremA court of the District of -Columbia,: and bad in his possession, as such receiver, certain bonds representing part of the avails of the award which he undertook to hold pending the determination of the suit "subject to plaintiff's claim
and right;" that, nevertheless, the bonds were obtained from him by McDonald before the termination of .the suit, and were sold and delivered by McDonald, in fraud of the plaintiff's rights, to the copartnership of Riggs & Co.; and that Riggs & Co; had full knowledge of plaintiff's rights at the time. ,It Js also alleged that ],1.iggs,the receiver, was a member of the firm of Riggs & Co., and that he died in September, 1881. The defendants are the surviving members of ,' , Riggs & C o . . The case thus made by the bill is one in which the equitable owner of bonds seeks to recover them,or their proceeds,from the surviving members of all the members of which acquired them with knowledge of his rights. As he seeks to enforce an equitable title, his suit is properly brought inequity. His title is established by the decree of ,the It is not necessary, in such It ' suit, to join, the personal representatives of a deceased partner as parties defendant, although would be proper parties at the option of the complainant. Neither is it necessary to join the personal representatives of Riggs, upon the theory that if he were alive he would be a necessary pa,rty to the sq.it. If he were alive, it is not obvious how he' cOllld have any int,erest in the controver'sy, or why his presence as, a party would be necessary for the protection of the defendants. 'S6 far asappears"he did not claim any interest in the bonds, but was a mere stakeholder; and the decree in the suit, in which he was appointed to which both McDonald and White as well as the plaintIff were parties" is conclusive as to the rights and interests in the bonds of all concerned, and will protect the defendants against any claim by either of them or their privies. These views dispose of most of the points urged upon the demurrer. It is insisted, however, that the plaintiff's cause of action is barred by.the..statute of' limitations. 'It does not appear that the defendants, or:any of them, were within this state when the cause of action accrued; i and it is therefore notnec8ssary to cO,nsider whether the statestatme oflhnitations would apply to the case. But, unless the transaction between McDonald and the defendants, out of which the plaintiff's cauBeof ncti()n against the defendants arises, was a secret or clandestine one, which was design;ed by the parties to it to be con· cea.led .from his knowledge, the suit is barred bysElction 5057, Rev. S$",U. S. Baileyv. Glover, 21 Wall. 342; Rosenthal v. Walker, 111 U. 8. 185 ;8. O. 4: Sup. Ct. Rep. 382. Being a suit in equity; between an assignee in bankruptcy and persons claiming an adverse irfu3rest touching property vested in such assignee, the suit is not maintainable in any court, unless brought within two years from the titnewheuthe cause'of action accrued. The cause of action accrued iriJune, 1875, that being the time when the defend'ants obtained the bonds with knowledge of the pl4J.intiff's rights. There are no allega- ' tions in the bill inconsistent with the hypothesis that the defendants and McDonald intended to and did deal with the bonds openly, pub-
V. FJRSTNAT. BANK.
Hcly, and in defiance of any right or claim of the plaintiff. There is nothing to show that the transaction was one which would necessarily, itself. The only averment in the bill intended to excusa delay in ,bringing suit by the plaintiff is t4at he "had n() knowladge, or means of knowing, ()f the sale of said bonds to Riggs & Co. until about the m()Dth of April, 1884.» This averment is wholly insufficient to prevent the bar ()f the statute fr()m commencing . to run. The demurrer is sustained. Leave is granted to the plaintiff to move for permission to amend the bill.
BANK OF TREMONT
and others.J ·
(Oircuit OQurt, B,D. Penn8yl'/'Jania., November 18. 1886.)
An application for the appointment of a recetver. which has been allowed sleep for six years, will be although some testimony has been taken the. Illean .'
In. EquIty. . ." , :G'fJorg(l M. Roads, for complainants. G.' E. Farquhar, for respondents.
J. The material alll;lgations oHhe bill are a(follows:
in 1879 the said board of directors directed Wm.A. nuber, president, and Aug. W. Huber, Vice-president, as aforem'entioned,to'act in settling up the business Of the said: ,bank, and' to sell the propertY'. real' and personal. of the said bank, as president and Vice-president, and also as tees of said bank. .' '. . . . "(e) said Wm. A. Huber. president, and Aug, iV.Hriber. vjce-ptesident. as aforesaid, as. trustees for the First National Bank of Tre'mont, sold, on OCtober 13,1880. at public sale, certain interests and titles to 33 tracts or pieeesof land, together WUb' furniture, policies of insurance, and other personal property' belonging to the said bank, without having int\) bonds, or given security of any kiml. fOf the faithful discharge of. their .tf\lstS. and for the protection of the minority stockholders. . "(9)' That at said sale no information was given to irlquiring bidders as to the titles of or incumbrances said properties; one of the said properties (as per No. 15 appended:sale-bill) being adv.el1tised and sold without any description,,-ell:Qepting that said .')roperty was a house and lot. 14x150 ft., on Clay St., Treluont. .;, . ..' . .' "(10). 'fll,at !'fo.· lof said properties was sold!lt sheriff's sale at Potts,ville, Pa., on February 13, 1880, and purchased by" Wm. A. Huber, trustee, for $5,400."" , , .; I,:;,: : "(11) That the said property [No. IJ was sold at the aforementioneQitrt!stees,l sale, held on October 13, 1880, to one Geo. D. Rise. a step-son of the said Wm. A. Huber·.lor $500.
by C. Berkeley Taylor, Esq., ofthe Philadelphia bar.