Williams, J.
The plaintiff claims, that the proceedings in this case, by the corporation of which he was a member, are fraudulent and void; and that a court of chancery will aid him in recovering the property which he has lost. That there was no actual fraud in the defendants, is found by the court. Two principal questions then arise: 1. Is the transfer of this property, by the Saugatuck Manufacturing Company, valid? 2. If it is not, will a court of chancery, at this distance of time, and under the circumstances disclosed, lend the plaintiff its aid? These being answered, it will, in my opinion, become unnecessary to examine some of the questions, submitted by the superior court.
1. Is the transfer valid? A great number of objections have been made to the proceedings of the company in relation to this sale, some of which I deem entirely groundless; and some of which are, certainly, very imposing. But if any one is in his favour, that is sufficient; and as I am of opinion with the [157]*157plaintiff upon one of his objections, it is unnecessary particularly to examine the others.
It is a principle of a court of equity, long since established, that an agent or trustee shall not be both buyer and seller. To allow this would open too wide a door for fraud, and place those, who need protection, too much in the power of those, who are assigned to protect them. Accordingly, sales by administrators or guardians to themselves, directly or indirectly, have been held invalid even at law; and this case, in my opinion, falls within that class of cases.
The Saugatuck Manufacturing Company, for causes the propriety of which we need not consider, at a meeting of their stockholders, of whom Lewis Raymond was one, in December 1817, voted to sell their property ; and, by subsequent votes, directed the mode. The property thus sold was purchased by Raymond, not for himself, but for such members of the company as should, within a short time, pay their proportion of the debts and purchase money. If all the former stockholders had done this, as they might, it would have been a purchase, by one individual of a corporation, of the corporate property, not for himself, nor for the corporation, but for the individual members of it. By the act of incorporation, a majority of the stockholders have the power to act for the whole. They become, therefore, agents or trustees for the whole. When they vote as a corporation to sell, and as individuals to buy, they act precisely as when A., an executor, agrees to sell, and A., the individual, becomes the purchaser. Here a majority of the stockholders of the corporation, by their agent Seymour Taylor, sell this property, and the same persons, by their agent Lewis Raymond, purchase it. They are, then, in fact both sellers and purchasers. And the court must look at the real nature of the transaction, notwithstanding the appearance it is made to assume. Here, Raymond pays no money, and gives no bond, because it is expected the same property is to go back to the same hands, in some new shape. And accordingly we find, that the Saugatuck Manufacturing Association go on and pay the debts of the company.
I know it is said, that this sale is made in such a manner, that all may come in, who choose to do so. This is certainly important when we are enquiring for actual fraud; but it cannot relieve the transaction from the objection that it is of a character which may be made use of for fraudulent purposes; [158]*158and therefore, it cannot be tolerated, though there be no actual fraud. In this respect, it is somewhat analogous to the case of a trustee, who pays a full price for the trust property he purchases. In such cases, it has been often decided, that this would not validate the sale. This sale, therefore, cannot be recognized, by this Court, as operative against those members of the corporation, who object to it.
2. The next question to be considered, is, whether this Court, at this time, and under these circumstances, will relieve the plaintiff?
If the course taken by the defendants was such as claimed by the plaintiff; if their object was to cheat him out of his stock; he certainly would have been entitled to the aid of a court of justice, either at law or in equity.
But what are the facts? The company went into operation, during the war, “in the full tidfe of successful experiment.” The news of peace, while it imparted happiness to the country at large, threatened ruin to those, who had embarked deeply in domestic manufactures. This company had another calamity to encounter. Their machinery proved to be of an inferior quality. They became embarrassed. Their creditors pressed for payment. They had nothing to meet their debts but that machinery and their real estate. To part with either would prevent future operations. No provision existed, by which they could tax the stockholders, although after the company property was gone, individual property might be taken for debts of the corporation. Under circumstances so embarrassing, it is proposed to sell the property; suffer all the stockholders to come in as purchasers; and by this operation, raise money to pay the debts, and thus be enabled to go on with the business. Accordingly, in December, 1817, a vote to sell was passed ; after which sundry other votes, from time to time, were passed, the better to carry that vote into effect.
Soon after the vote to sell,—not before, as would be supposed from the bill,—viz. on the 21st of January 1818, a vote was passed altering the mode of warning meetings. The former mode was by personal notice, or ten days notice by mail; the latter, by notice in a newspaper in Bridgeport, and in the city of New-York. From the facts shewn, it is apparent, that most of the then stockholders resided in the city of New-York, or in the vicinity of the manufactory. That being the case, I see no reasonable objection to the notice proposed. And the plaintiff, [159]*159who alone complains of it, living, as he did, a thousand miles distant, would have been no more benefited by ten days notice by mail, than by two weeks publication in a newspaper printed among his friends in his native county. Besides, this being after the vote to sell, he must have been put upon his guard, if he wished to watch the conduct of this corporation. I think no inference can be derived from this of a fraudulent intent. But when I find, that on the 28th of January of that year, his friend Mr. Swift, by request of the directors of that corporation, gave him a particular account of its situation, of its embarrassments, and of its votes to sell, and this fifty days before the actual sale, I can see no reason to believe, that the mode of warning meetings was changed with any such views as are imputed to this corporation or its members. The mode adopted was certainly more convenient, more conformable to the practice of similar institutions, and such as men of business would expect. Neither mode, however, could be of much use to a man so remote as the plaintiff, unless he had an agent in the vicinity.
On the 18th of March, the sale was made. Then the outstanding debts were fairly stated; notice was given that a bond would be required; a considerable number of persons were collected; and the sale was made to the highest bidder. A bond was not taken, nor the money paid; but those for whose use this purchase was made have paid the debts, and no injury has arisen from the want of the bond.
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Williams, J.
The plaintiff claims, that the proceedings in this case, by the corporation of which he was a member, are fraudulent and void; and that a court of chancery will aid him in recovering the property which he has lost. That there was no actual fraud in the defendants, is found by the court. Two principal questions then arise: 1. Is the transfer of this property, by the Saugatuck Manufacturing Company, valid? 2. If it is not, will a court of chancery, at this distance of time, and under the circumstances disclosed, lend the plaintiff its aid? These being answered, it will, in my opinion, become unnecessary to examine some of the questions, submitted by the superior court.
1. Is the transfer valid? A great number of objections have been made to the proceedings of the company in relation to this sale, some of which I deem entirely groundless; and some of which are, certainly, very imposing. But if any one is in his favour, that is sufficient; and as I am of opinion with the [157]*157plaintiff upon one of his objections, it is unnecessary particularly to examine the others.
It is a principle of a court of equity, long since established, that an agent or trustee shall not be both buyer and seller. To allow this would open too wide a door for fraud, and place those, who need protection, too much in the power of those, who are assigned to protect them. Accordingly, sales by administrators or guardians to themselves, directly or indirectly, have been held invalid even at law; and this case, in my opinion, falls within that class of cases.
The Saugatuck Manufacturing Company, for causes the propriety of which we need not consider, at a meeting of their stockholders, of whom Lewis Raymond was one, in December 1817, voted to sell their property ; and, by subsequent votes, directed the mode. The property thus sold was purchased by Raymond, not for himself, but for such members of the company as should, within a short time, pay their proportion of the debts and purchase money. If all the former stockholders had done this, as they might, it would have been a purchase, by one individual of a corporation, of the corporate property, not for himself, nor for the corporation, but for the individual members of it. By the act of incorporation, a majority of the stockholders have the power to act for the whole. They become, therefore, agents or trustees for the whole. When they vote as a corporation to sell, and as individuals to buy, they act precisely as when A., an executor, agrees to sell, and A., the individual, becomes the purchaser. Here a majority of the stockholders of the corporation, by their agent Seymour Taylor, sell this property, and the same persons, by their agent Lewis Raymond, purchase it. They are, then, in fact both sellers and purchasers. And the court must look at the real nature of the transaction, notwithstanding the appearance it is made to assume. Here, Raymond pays no money, and gives no bond, because it is expected the same property is to go back to the same hands, in some new shape. And accordingly we find, that the Saugatuck Manufacturing Association go on and pay the debts of the company.
I know it is said, that this sale is made in such a manner, that all may come in, who choose to do so. This is certainly important when we are enquiring for actual fraud; but it cannot relieve the transaction from the objection that it is of a character which may be made use of for fraudulent purposes; [158]*158and therefore, it cannot be tolerated, though there be no actual fraud. In this respect, it is somewhat analogous to the case of a trustee, who pays a full price for the trust property he purchases. In such cases, it has been often decided, that this would not validate the sale. This sale, therefore, cannot be recognized, by this Court, as operative against those members of the corporation, who object to it.
2. The next question to be considered, is, whether this Court, at this time, and under these circumstances, will relieve the plaintiff?
If the course taken by the defendants was such as claimed by the plaintiff; if their object was to cheat him out of his stock; he certainly would have been entitled to the aid of a court of justice, either at law or in equity.
But what are the facts? The company went into operation, during the war, “in the full tidfe of successful experiment.” The news of peace, while it imparted happiness to the country at large, threatened ruin to those, who had embarked deeply in domestic manufactures. This company had another calamity to encounter. Their machinery proved to be of an inferior quality. They became embarrassed. Their creditors pressed for payment. They had nothing to meet their debts but that machinery and their real estate. To part with either would prevent future operations. No provision existed, by which they could tax the stockholders, although after the company property was gone, individual property might be taken for debts of the corporation. Under circumstances so embarrassing, it is proposed to sell the property; suffer all the stockholders to come in as purchasers; and by this operation, raise money to pay the debts, and thus be enabled to go on with the business. Accordingly, in December, 1817, a vote to sell was passed ; after which sundry other votes, from time to time, were passed, the better to carry that vote into effect.
Soon after the vote to sell,—not before, as would be supposed from the bill,—viz. on the 21st of January 1818, a vote was passed altering the mode of warning meetings. The former mode was by personal notice, or ten days notice by mail; the latter, by notice in a newspaper in Bridgeport, and in the city of New-York. From the facts shewn, it is apparent, that most of the then stockholders resided in the city of New-York, or in the vicinity of the manufactory. That being the case, I see no reasonable objection to the notice proposed. And the plaintiff, [159]*159who alone complains of it, living, as he did, a thousand miles distant, would have been no more benefited by ten days notice by mail, than by two weeks publication in a newspaper printed among his friends in his native county. Besides, this being after the vote to sell, he must have been put upon his guard, if he wished to watch the conduct of this corporation. I think no inference can be derived from this of a fraudulent intent. But when I find, that on the 28th of January of that year, his friend Mr. Swift, by request of the directors of that corporation, gave him a particular account of its situation, of its embarrassments, and of its votes to sell, and this fifty days before the actual sale, I can see no reason to believe, that the mode of warning meetings was changed with any such views as are imputed to this corporation or its members. The mode adopted was certainly more convenient, more conformable to the practice of similar institutions, and such as men of business would expect. Neither mode, however, could be of much use to a man so remote as the plaintiff, unless he had an agent in the vicinity.
On the 18th of March, the sale was made. Then the outstanding debts were fairly stated; notice was given that a bond would be required; a considerable number of persons were collected; and the sale was made to the highest bidder. A bond was not taken, nor the money paid; but those for whose use this purchase was made have paid the debts, and no injury has arisen from the want of the bond. This may be no sufficient answer to the objection, that the bond was a condition precedent; but these facts satisfy me, that no fraud was intended nor practised; and that the plaintiff can no more complain of constructive than of actual fraud. The defendants honestly intended to extricate themselves from a situation in which they could do nothing but by unanimous consent, which they could not expect to obtain, or by some fortunate accident less to be anticipated, or by adopting the course which they did. So far from attempting to gain advantage of the plaintiff, they have shewn an anxiety that he should be placed upon the same ground with themselves. Mr. Swift, at their request, informed him, that he should be admitted upon the same terms they were.
It is said, that Mr. Swift informed him, that an instalment of twenty per cent, was required; that this was an arbitrary requisition, and more than others paid; and more than was re[160]*160quired from them. This twenty per cent, was, as I understand, a contemplated additional subscription, which it was supposed might be necessary, but which, of course, would not be required of him, if it was not of others. There is, certainly, nothing to shew, that it was deceptively mentioned, to prevent him from taking his stock.
When the defendants came forward to take the company property, which, at that time, whatever was its nominal value, could be sold for little or nothing, and caused information to be given to the plaintiff, what ought he to have done? Was it right in him to stand by; to watch the result of this experiment; and avoid the loss, if it proved unfortunate, upon the ground that there was a sale, and claim the profits, if profits were made, upon the ground that there was no sale?
It is too much to say, that this may be done at any period, however remote. Here, the plaintiff was informed of the proposed sale, in January 1818, and on the 30th of March, of the actual sale, and that he would be allowed to come in. On the 14th of May, he returns his thanks for the offer; says he wishes to redeem the stock, if it is worth redeeming; and requests Mr. Wakeman to act for him. On the 14th of June, Mr. Wakeman writes to him, and, after giving a particular account of the business, expresses his doubts (in which he says another friend concurs) whether it is best for him to redeem, or come into the concern. From that time until the year 1825, no further step was taken, and then nothing but to appoint some other person to enquire. From June 1818, until some time in the year 1826, after the information he had received, the plaintiff never intimated to the defendants, that he was desirous to take any part of the stock, or to have any thing to do with the concern. On the contrary, he seems to have acquiesced in the advice he had received from his friends, and to have determined to risk no more.
When I consider the nature of his profession; the state of his health; his distance from the defendants,—I should be disposed to allow him a much more liberal time, than to a man whose education, and habits, and situation, all led to promptitude and despatch in mercantile affairs. And yet with all that allowance, it seems to me, that seven or eight years is quite too long for him to be permitted, at the sole hazard of those who offered to admit him in the first instance upon equal terms, to wait the result of an experiment, which his friends considered [161]*161doubtful, if not hazardous. After the opinion given him, by Mr. Wakeman, he must have made up his mind to relinquish every idea of taking an interest in this concern, when we do not find. that for seven years after, he made even an enquiry respecting it. Under such circumstances, a court of chancery cannot regard this claim with much complacency.
Six years acquiescence would have barred an action on the case for an illegal transfer of the stock, or for any mismanagement of the company concerns. Six years, also, would have barred an action of account. And six years was a sufficient time for the plaintiff to determine whether he would come into this association; and yet eight years elapsed before he requested it; and more than, ten before he demanded it by suit. Kane v. Bloodgood, 7 Johns. Chan. Rep. 122.
It is said, that he did not know the facts, by which the claim he now makes could be supported. But these facts were not secrets, locked up in the breasts of the directors of this company. From their very nature, the prominent facts were public; and all of them were capable of being ascertained ten years ago, as well as at the present time. Nor am I satisfied, that he was ignorant of these facts; so far from it, that it is proved, by his own admissions, that he was early apprised of the principal facts regarding this sale, particularly of that fact upon which the sale has been declared invalid by the court. Mr. Swift early informed him of the vote of the stockholders to sell; he then informed him of the sale, and that most of the stockholders, indeed all that were able, had united in the purchase, and of the willingness of the directors to suffer him to come in with the purchasers. He cannot now say, that he had not the information.
He might then have done, with the consent of the purchasers, what he now asks this Court to permit him to do against their consent. But if he then had done it, he must have run the same hazards that they did, and incurred the same losses. This he virtually declined. Now, after waiting for ten years, he asks a court of equity to assist him in reaping the profits of an adventure, in the risks of which he was unwilling to share. This ought not to be allowed, “Equity,” (says Judge Paterson) “will not suffer a party to lie by till the event of the experiment shall enable him to make his selection with certainty of profit one way, and without loss any way. This mode of procedure is unfair; contrary to nat[162]*162ural justice; and in exclusion of mutuality.” Hollingsworth v. Fry, 4 Dall. 347, 8. That was a case where the party had contracted to pay for certain lands, the value of the defendant’s improvements, as estimated by certain arbitrators, within six months, and made no tender till the lapse of five years. So where there has been great delay on the part of a vendor, and application is made to a court of chancery by him ; his conduct is considered as evidence that he has abandoned the contract. Lloyd & al. v. Collett, 4 Bro. Ch. Rep. 469.
How far this delay will affect the legal right of the plaintiff, it is not necessary for me to enquire; nor is it necessary to decide, whether he originally required aid in a court of chancery. Sufficient is it to say, that situated as the plaintiff in this case is, after so long a delay, I think if he has a remedy, he ought to seek it in a court of law, and not in a court of equity. I do not think, however, that costs should be taxed against him; and I would, therefore, advise, that the bill be dismissed without costs.
Hosmer, Ch. J. and Peters and Daggett, Js. were of the same opinion.
Bissell, J. gave no opinion, having been of counsel in the cause.
Bill to be dismissed without costs.