PHILIPS, District Judge,
after stating the case as above, delivered the opinion of the court.
The want of jurisdiction over this controversy is pressed with zeal and ability by appellants’ counsel, notwithstanding the opinion of Judge Sanborn on the circuit in overruling the motion to remand. As the defendants, the two railroad companies and the bank, were citizens of the same state as the complainants when the suit was instituted, it was not removable from the state to the federal court on the petition of James Brown, the nonresident citizen, unless the controversy between himself and<the complainants could be wholly and fully determined as between them without the necessary presence of either of the other defendants. Section 2, Act March 3, 1887, c. 373, 24 Stat. 553, as corrected August 13,1888 (chapter 866, § 2, 25 Stat.434, Supp. Rev. St. 611 [U. S. Comp. St. 1901, p. 509]). It is conceded that the question of such separability as applied to this case is to be determined from the face of the bill of complaint.
An analysis of the bill warrants the court in eliminating from the consideration of this question the two street railway companies. The only allegation of the bill squinting at the part played by the railroad companies pertinent to this issue is as follows:
“Plaintiffs further charge that the whole scheme of alleged, reorganization , of the transit company and United Railways Company was fraudulently designed, and that said railroads and their ■ stockholders, as far as they have hitherto concurred therein, were induced to do so through misrepresentation, deception, and fraud on the part of the said Brown Bros. & Co.”
In the first place it is not alleged that the railroad companies in any wise participated in any fraudulent design or acts in furtherance of any wrongful scheme, or that they did anything to promote it. The mere charge in a bill in equity that by a fraudulent scheme a reorganization of two railroad companies was fraudulently designed by the promoters is a mere brutum fulmen. It states no fact presenting issuable matter. The allegation is but a conclusion of law by the pleader, and no relief could be administered thereon. Smith v. Sims, 77 Mo. 269-274; Bliss on Code Pleading, 211; McCrelish v. Churchman, 4 Rawle (Pa.) 26; Moss v. Riddle & Co., 5 Cranch, 351, 3 L. Ed. 123; Very v. Levy, 13 How. 345-361, 14 L. Ed. 173; Marquez v. Frisbie, 101 U. S. 473, 478, 25 L. Ed. 800.
The gravamen of the bill, in its whole texture, is for the enforcement of complainant’s alleged rights growing out of and dependent upon the existence of the consummated reorganization scheme. While a party within the rule expressed in Hardin v. Boyd, 113 U. S. 756-763, 5 Sup. Ct. 771, 28 L. Ed. 1141, where he is not certain as to what specific relief he is entitled, may so frame his bill as to entitle him to an alternative prayer for relief; yet the relief sought, whether the one or the other, [755]*755must follow from the allegations of fact, which of themselves authorize and characterize the particular relief. He may not on a hill disclosing that he recognizes and approbates a given transaction, praying for the enforcement of his asserted rights thereunder, in the same breath reprobate the transaction and ask that it be set aside for fraud, particularly without specifying any act or fraud vitiating it.
The. removability of the suit therefore resolves itself into the single question as to whether this controversy exists wholly between the complainants, citizens of Missouri, and the defendants, Brown Bros. & Co., citizens of the state of New York, and can be fully determined as between them without the presence of the National Bank of Commerce. If it can be, the nonresident was entitled to remove the case into the United States court.
What the complainants seek is the specific enforcement of the alleged contract made, between them and Brown Bros. & Co. The bank was no party to that contract. “The general rule is, that the parties to the contract (the subject of specific performance) are the only proper parties to the suit for its performance, and. except in the case of an assignment of the entire contract, there must he some special circumstances to authorize a departure from the rule.” Willard v. Tayloe, 8 Wall. 557, 571, 19 L. Ed. 501. As said in Trasher v. Small, 3 Mylne & Craig, 69, quoted with approval by the court in Willard v. Tayloe, supra:
“The court assumes jurisdiction in cases of specific: performance of contracts, because a court of taw, giving damages only for the nonperformance of the contract, in many cases, does not afford an adequate remedy. But in equity as well as at law, the contract constitutes the right, and regulates the liability of the parties; and the object of both proceedings is to place the party complaining. as nearly as possible, in the same situation as the defendant had agreed that he should be placed in. It is obvious that, persons, strangers to the contract, and therefore neither entitled to the rights nor subject to the liabilities which arise out of it. aro a« much strangers to a proceeding to enforce the execution of it as they are to a proceeding to recover damages for the breach of it.”
If the complainants were entitled to any particular segregated part of the securities in question, which had passed by assignment from Brown Bros. Co. to the bank, with notice, or which designated sort ion the bank had obtained possession of subject to the superior rights of the complainants, and the suit were for the recovery of that specific thing, the bank would be a necessary, if not an indispensable, party. Or, if the securities, to which the complainants were entitled to an aliquot part, had been in the custody of the hank as bailee for the reorganization committee, and the complainants sought to have their share therein allotted and delivered to them, the bank would be an essential part}-. But none of these conditions are disclosed by the bill. It charges only in this respect that the complainants “were entitled to receive an amount of the stocks, bonds and other securities to belong to the whole number of subscribers to the 557,000,000 which should be proportioned to the amount paid by plaintiffs as compared with said ictal purchase price of said $7,000,000”; and that said allotment was made in writing in response to their letter of proposal.
The connection of ike bank with this matter is substantially as follows, [756]*756as described by the bill: That Brown Bros. & Co. had sent to and deposited with said bank the form of a contract executed by them, with instructions that the bank, as the agent of said Brown Bros. & Co., should demand the signature of the contributing stockholders to said contract before permitting them to pay to the.bank, as the receiving agent, the allotment in the $7,000,000 purchase price; that said Brown Bros. & Co. had appointed the said bank to collect the several allotments, etc., and then deliver the participating receipts; and that the complainants, having refused to accede to the terms and conditions of such submitted contract, the bank had refused to deliver the allotment, and that it made claim to such allotment by having paid to Brown Bros. & Co. the required sum of $374,774.40. This is coupled with the distinct allegation in the bill “that said bank had no authority to act for them in that matter, and further could acquire no rights to the securities belonging to the plaintiffs by any such action.”
No matter what the transaction between Brown Bros. & Co. and the bank, after the making of the contract in question between the complainants and Brown Bros. Co., and no matter what right the bank may, as against Brown Bros. & Co., assert under an allotment to it, in no degree concerned the complainants, as no dealings, without their consent, between Brown Bros. & Co. and the bank could in any wise exonerate Brown Bros. & Co. from-their obligation, if any, to make the allotment due to the complainants.
In Willard v. Tayloe, supra, the bill was for specific performance of a contract for the sale of certain real estate which the defendant had leased to the complainant with the option to the lessee to purchase. Discussing the effect of an alleged- transfer of an interest in the lease to the complainant’s brother, the court said:
“The transfer, by the complainant to his brother, of one-half interest in the lease *■ * * in no respect affects the obligation of the defendant, or impairs the right of the complainant to the enforcement of the contract. The brother is no party to the contract, and any partial interest he may have acquired therein the defendant was not bound to notice. The owners of partial interests in contracts for land, acquired subsequent to their execution, are not necessary parties to bills for their enforcement The original parties on one side are not to be mixed up in controversies between the parties on the other side, in which they have no concern. If the entire contract had been assigned to the brother, so that he had become substituted in the place of the complainant, the case would have been different.”
It would be no defense to this bill for the defendants Brown Bros. & Co. to set up that they had agreed to allot, or had allotted, to the bank $446,160 of shares of the seven millions of securities. And if, as the bill charges, Brown Bros. & Co. had placed in the hands of the bank a participation certificate or receipt “for such pretended allotments,” it in no wise concerns the bank that the complainants under a contract between them and Brown Bros. & Co. are demanding a participation.
Much was said in argument at the hearing about the participating receipt being negotiable in form, rendering it important to the complainants to have its transfer by the bank enjoined. There is no allegation in the original bill tendering such issue for consideration. The allegation only is that Brown Bros. & Co. have put in the possession [757]*757of said bank a fraudulent participation receipt for such pretended allotment. Even if such participation receipt had been issued or was held by the bank, it would not alter the result. Such term — “negotiable in form” — as applied to such a receipt, would not imply that it would be. negotiable in the sense of the law merchant so as to pass to an innocent holder for value. It would only imply that such receipt would be transferable by the holder to a third party, who would acquire the' rights of the original holder, no more and no less.
It would be more academic than useful, in the disposition of this question, to discuss the distinction between necessary, indispensable, essential, and proper parties to a suit under the judiciary act, as affecting its removability on the ground of a separable controversy. The entire controversy between the complainants and Brown Bros. & Co. is whether or not the complainants are equitably entitled to the delivery and transfer of an allotted interest in said securities. If, under the contract claimed by the complainants, they are entitled to this allotment, without signing on their part the contract finally propounded by Brown Bros. & Co. and deposited with the bank, they are entitled to the relief prayed for. If they are not so entitled, their whole controversy must fall to the ground. A decree against Brown Bros. & Co. that they make the claimed allotment in favor of the complainants, which they had the power to do from aught that appears on the face of the bill, would give the complainants all the relief to which they are entitled under the contract. And, as already stated, whatever may be the mutual rights and obligations as between Brown Bros. & Co. and the bank, by reason of the alleged dealings between them, is as to these complainants res inter alios acta.
The case is wholly unlike that of Wilson v. Oswego Township, 151. U. S. 56, 14 Sup. Ct. 259, 38 L. Ed. 70, and kindred cases. Where bonds are deposited in escrow with a bailee, to be delivered by him in kind upon the performance of some condition, precedent, to a third party, such bailee is a necessary party to a suit to recover the specific thing. In the case at bar the thing to which the complainants’ alleged contract entitled them was an allotment of an aliquot share in certain securities noi bold by the defendant bank, but by an outside trust company, not a party to this suit.
There is another class of cases, like that of Torrence v. Shedd, 144 U. S. 527. 12 Sup. Ct. 726, 36 L. Ed. 528, which was a partition suit. In its progress a controversy arose among the parties touching the title to an undivided share of the property, fn such case, where the object of the suit .is to administer the entire estate according to the rights of all the parties interested therein, in which it is essential to marshal and settle conflicting interests, and sell or allot freed from such complexity, the suit is an indivisible unit, and all such claimants and persons in interest are necessary parties to accomplish the very end desired.
The case at bar is more nearly allied, in the principle involved, to that of Barney v. Latham, 103 U. S. 205, 26 L. Ed. 514. The bill presented a case against certain individuals and a corporation. It alleged that the complainants were in equity the owners of 1-37 of certain lands [758]*758earned by them in the construction of a certain railroad, some of which lands the individual defendants had sold and received 'the proceeds to a very considerable extent, 1-37 of which (the bill alleged) in equity belonged to the complainants. It was further alleged that the individual defendants had placed the title to the remainder of the lands in the defendant corporation. The question presented was whether or not it presented a separable controversy. That arose under the judiciary act of 1875. After asserting that a defendant may be a proper hut not an indispensable party to the relief asked, within the purview of the removal statute, the court said thére were two controversies; one was a controversy between the complainants and the land company, the corporation, “to the full determination of which the other defendants are not, in any legal sense, indispensable parties, although, as stockholders in the company, they may have an interest in its ultimate disposition. Against the latter, as a corporation, a decree is asked requiring it to convey to the plaintiffs the undivided 2-9 of 1-37 of certain lands, and to account for the proceeds of the lands by it sold subsequently to the conveyance from the railroad company. But the suit as distinctly presents another and entirely separate controversy, as to the right of the plaintiffs to a decree against the individual defendants for such sum as shall be found, upon an accounting, to be due from them upon sales prior to the conveyance from the railroad company. With that controversy the land company, as a corporation, has no necessary connection. It can be fully determined as between the parties actually interested in it without the.presence of that company as a party in the cause. Had the present suit sought no other relief than such a decree, it could not be pretended that the corporation would have been a necessary or indispensable party to that issue. Such a controversy does not cease to be one wholly between plaintiffs and those defendants, because the former, for their own convenience, choose to embody in their complaint a distinct controversy between themselves and the land company. When the petition for removal was presented, there was in the suit, as framed by plaintiffs, a controversy wholly between citizens of different states * * * and the individual defendants, citizens of New York, etc. And since the presence of the land company is not essential to its full determination, the defendants, citizens of New York, Wisconsin, and Massachusetts, were entitled, by the express words of the statute, to have the suit removed to the federal court.”
The case here is much stronger in favor of the right of removal, in that the relief asked by the complainants against Brown Bros. & Co. rests entirely upon the contract between them, the enforcement of which would give to the complainants all they can ask. The motion to remand was properly denied by the Circuit Court.
It remains to consider the case on its merits. Wljile it is to be conceded that, no matter how others may be affected, by a- decree, it should not the less entitle the suitor to the relief the law of the land affords him as an individual; yet, where the particular relief sought involves injustice and disaster to others having a direct interest in the subject-matter on which the decree is to operate, common right demands that •such suitor should come not only with clean hands, but his right should [759]*759leave no reasonable doubt in the judicial mind of its absolute justice. For the remedy by specific performance is not an unqualified right. It lies within the domain of judicial discretion, not arbitrarily exercised. Within this limitation the court may refuse its assistance whenever there is any uncertainty or doubt about the specific terms of the proposed contract, or any well-founded conviction that its specific enforcement, under all the facts and circumstances of the case, would be harsh anri unreasonable, or more hurtful to the rights of others in interest than its denial to the suitor. Dalzell v. Dueber Mfg. Co., 149 U. S. 325, 13 Sup. Ct. 886, 37 L. Ed. 749; Nickerson v. Nickerson, 127 U. S. 677, 678, 8 Sup. Ct. 1355, 32 L. Ed. 314.
The obstruction, if not the disruption, of the plan of reorganization, or an allotment in kind of an aliquot portion of the securities intended to be managed as a unit by the Syndicate for promoting the interests of all the subscribing stockholders, might thwart the entire scheme, and certainly would operate as an inequality between the claimants and the other shareholders. The evidence shows that out- of 210- shareholders the complainants are the only active dissenters, and only four other shareholders, of small holdings, failed to execute the agreement.
The complainant’s cause of action rests upon contract. The alleged contract had its root in the circular letter of September 27, 1904, issued by Brown Bros. & Co. On objection made by a representative of complainants to so much of said letter as left it optional with Brown Bros. & Co. whether the shareholders should be allotted a subscription to the purchase price of the securities proportioned to their holdings, the Syndicate Managers, on October 11, 1904, addressed another circular letter to the shareholders of the transit company, which, in substance, stated that upon the terms and conditions of the letter of September 27, .1904, they made a supplemental proposition to be accepted on or before the 17th day of October, 1904-, and if not accepted on or before said date it would neither be continued nor renewed. This letter stated that:
“We liavo determined to allow each shareholder of the St. Louis Transit Company, in the proportion which the number of his shares of stock in said company bears to 1he total amount ox shares outstanding, to participate in the syndicate purchase to be controlled by the syndicate managers. To each shareholder who shall subscribe in the way hereinafter provided for his proportion of said syndicate purchase on or before the time designated we will allot such proportion. Of course, any application heretofore made by any such stockholders will be treated as merged in any application which he will make under this proposal. If he makes no application hereunder, his prior application will stand.”
On the receipt of this letter the representative of the complainants called upon said bank and made inquiry as to whether it would be necessary for them to make a second application for such allotment, and were advised that the application made under the letter of proposal of September 27th was sufficient. On October 20, 1904, Brown Bros. & Co. wrote to the -complainants saying that:
“Referring to our letter of September 27th. 1904, and to our supplementary notice of October 11th, 1904, addressed to the shareholders, etc., and also to your formal application through the National Bank of Commerce as our [760]*760agents, for $1,000,000 underwriting in this syndicate, we have allotted yon, in accordance with the terms of our offer of October 11th, 1904, a participation of $440,100, being 40.56 per cent of the par value of your holdings of St Louis Transit Company stock.”
And made a call upon them for 84 per cent, of the subscription, namely, $374,774.40, in favor of the National Bank of Commerce, on or before Friday, October 38, 1904.
Pending these transactions Brown Bros. & Co., in pursuance of the authority, which we hold inhered in the tripartite agreement for reorganization, and for effectually carrying out the useful object to be accomplished by the Syndicate -Managers, drew up an agreement for the purchase of the bonds and stocks of the United Railways Company. This agreement declared that the “subscribers form a syndicate for the purpose of promoting and carrying out said tripartite agreement.” Among its provisions was that 15,000 shares of common stock of the United Railways Company, acquired and to be acquired under said agreement and plan, should be paid as compensation to the Syndicate Managers for their services in securing and underwriting the plan and tripartite agreement aforesaid, etc., and also one-fifth of any residue of any such stocks and net proceeds remaining after the payment in full of all sums payable under clauses 1, 3, and 3 of said article, and fixing a period' of one year, or two conditionally, for operating the syndicate. This agreement was required to be signed by the subscribers as a condition to receiving the participation receipt from the bank as the agent of Brown Bros. & Co. This the complainants refused to comply with, and on the 38th day of October, by letter, submitted to the bank their own proposition of subscription, which, in substance, was a tender of a check for $374,774.40, “being payment in full of 84-per cent, of the amount of my allotment and subscription to the following securities”— securities enumerated. And then proceeded as follows:
“Tbis is to further notify you that I shall demand, delivery and surrender to me of the proportion of the foregoing securities to which I am entitled as the holder and owner of 11,000 shares of St. Louis Transit Company stock, to wit, $446,100, as soon as the indebtedness of the transit company for which check herewith tendered is to be applied in payment shall have been discharged and such securities shall have been released.” .
The question to be decided therefore resolves itself into the single proposition: Were the complainants entitled on payment of the $374,-774.40, and a willingness'to pay the remaining 16 per cent., to an allotment in kind, subject only to the payment of the debts for which the securities were pledged, despite the conditions for compensation which the syndicate management and the provisions for the control and management by them for a given period? All charges made in the bill affecting the integrity of Brown Bros. & Co. in organizing the syndicate were withdrawn at the hearing. The evidence shows that one of their representatives participated in the reorganization scheme at a meeting of the two railway companies. And, by a persuasive weight, the evidence shows that one of the managers of the complainant’s firm had knowledge, as early as September 35, 1904, of the understanding with the Syndicate Managers for their compensation and retention of control for one year or two years.
[761]*761In addition to this, the tripartite agreement, which it is clearly in-ferable must have been known to the complainants to be contemplated in some form, as indispensable to the consummation of a plan of reorganization to be worked out by the syndicate, was in fact formulated contemporaneously with the circular letter of September 27, 1904. While the proposal contained in the letter of September 27, 1901, was supplemented by that contained in the circular letter of October 13, 1904-, its information and conditions are to be read and applied in connection with the later letter. The fourth paragraph of the former stated that:
“The syndicate, of which the undersigned are managers, has been organized to inufhnse certain bonds and stocks mentioned in this tripartite agreement, belonging to the St. Tonis Transit Company, and upon a plan and terms heretofore agreed between the syndicate and managers.”
Furthermore, this letter stated:
“That it is the desire of the Syndicate Managers to afford to the shareholders of the transit company an opportunity to participate in such purchase of said bonds and stocks under said syndicate plan. * * * This offer is, however. entirely without consideration and purely voluntarj on the part of the Syndicate Managers.”
And in the application which followed, on September 29, 3904, by complainants to said bank as agent for Brown Bros. & Co., they, as owner and holder of 11,000 shares of the capital stock of the transit company, stated that “having deposited said shares with you, under the proposal of said Syndicate Managers under date of September 27, 1904, does hereby request participation in said syndicate to the amount of $1,000,000,” etc.; and concluded as follows:
“And i do hereby authorize you for me and in my name to subscribe to any plan or syndicate agreement that may be written and approved by said Syndicate Managers to the full extent of the amount of syndicate subscription hereby applied for.”
It does not admit of debate that whatever “the terms” were, situated as were the complainants with the knowledge they had, bound them, if they accepted the proposal, no matter if such terms were not recapitulated in the letter. So the letter of October 11th, supplementing the proposition, advised the complainants that they were “to participate in the syndicate purchase to be controlled by the Syndicate Managers; and by the preceding, part of the letter “upon the terms and conditions of our letter to you of September 27, 1901, and of the application which accompanied the same.”
Could a. shareholder, with the antecedent knowledge of these complainants, and with such references in the letters to plans and terms of the syndicate agreement, accept such proposal without inquiry or investigation into what that plan and its terms were, and demand to be let in freed from its conditions and provisions? There was no concealment or misrepresentation or device practiced by the syndicate management to induce the agreement, plan, or terms. So far from anything appearing indicative of unconscionable oppression or hardship ill them to warrant: their annulment by a court of equity, the only direct evidence touching such matter is that they were neither unusual nor un[762]*762reasonable. The very purpose of a syndicate organization in such conjuncture is to formulate and work out a plan for the enhancement of the properties of the reorganization by' a committee of management, which promises to avert impending bankruptcy or ruin, and to bring stability and profit out of financial disaster. The proofs in this case demonstrate both the wisdom and propriety of this reorganization scheme and syndicate management, in that the stocks which were depressed far below par immediately advanced to a premium in the markets, and at the time of taking the testimony herein they had risen 1G above par.
Where a party, as did the complainants in this case, in response to a proposal of sale, submits an acceptance upon variant terms, it is a counter proposition of purchase, which if not accepted by the vendor amounts to no contract. Carr v. Duval, 14 Pet. 79, 83, 10 L. Ed. 361; Hennessey v. Woolworth, 128 U. S. 442, 9 Sup. Ct. 109, 32 L. Ed. 500; De Sollar v. Hanscome, 158 U. S. 216, 15 Sup. Ct. 816, 39 L. Ed. 956; Minneapolis & St. Louis Railway Company v. Columbus Rolling Company, 119 U. S. 149, 7 Sup. Ct. 168, 30 L. Ed. 376; Kleinhans v. Jones, 68 Fed. 749, 15 C. C. A. 644.
There is no basis therefore to support the contention of the learned counsel for complainants that there is an express trust in this case enforceable in favor of the complainants. It is not an express trust for the palpable reason that the shares represented by the complainants were exchanged by them for voting certificates in compliance with the terms specified in paragraph “d” of article 3 of the agreement, which the complainants still hold, and in article 4 it is expressly declared that “the covenants between the respective parties hereto shall not be construed as enuring to the benefit or advantage of any person or corporation whose name is not subscribed to this agreement as a party thereto.”
The complainants were left perfectly free thereafter to accept or reject the terms proposed respecting the exchange of their shares in the transit company stock for such voting certificates. Therefore the complainants’ -rights, if any, capable of enforcement in law or equity, must depend according to their bill of complaint upon terms subsequent to the tripartite agreement. Not until the complainants paid for the allotment to be represented by a participating receipt, and not until the) executed the agreement sent the bank by Brown Bros. & Co., could the latter be held as trustees for the complainants.
If the settlor, even if there be no valuable consideration, makes an explicit declaration of a trust, duly executed, with the intention of being obligatory upon him, equity will enforce such trust. But if it be a mere agreement, without consideration, to execute an agreement declaratory of a trust, courts will not enforce it. Perry on Trusts (5th Ed.) § 96-97. And this rule should apply with especial force to a mere promise to execute an agreement, out of which a trust relation might arise between the settlor and he promisee, when the promise is conditioned upon the promisee executing on his part a collateral obligation, which he refuses to do. No implied trust- can be evoked out of this transaction, for the simple reason that the complainants as vendees did not accept the proposition on the conditions submitted by the vendors.
[763]*763It results that the decree of the Circuit Court dismissing the bill of complaint must be affirmed. It is so ordered.