Shaw v. Norfolk County Railroad

71 Mass. 162
CourtMassachusetts Supreme Judicial Court
DecidedOctober 15, 1855
StatusPublished
Cited by2 cases

This text of 71 Mass. 162 (Shaw v. Norfolk County Railroad) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shaw v. Norfolk County Railroad, 71 Mass. 162 (Mass. 1855).

Opinion

Bigelow, J.

The rule of equity pleading, that all persons interested in the subject matter of the suit, and whose rights may be affected by a final decree, must be made parties to the bill, is subject to several exceptions, which are as well established as the rule itself.

Whenever the parties interested are very numerous, so that it would be difficult or impracticable to bring them all before the court, and the different interests involved in the suit may be fairly and fully represented and tried without joining them, a strict adherence to the general rule is not required. This is true in all cases in which certain parties to a suit are entitled to be deemed the full representatives of the legal and equitable rights of many persons, so as to bind their interests under the decree, although they are not and cannot be made parties. Thus in the case of the Bubble, in 1720, although several persons were interested, yet, as they had lodged a general power and authority in some few only, the court of chancery, in order to avoid inconvenience from making such numerous parties, restrained them to those particular persons who were entrusted with this general power; and this case was cited with approbation by Lord Hardwicke in 2 Atk. 145; and the doctrine was affirmed by Sir Thomas Plumer, on a full review of the authorities, in Meux v. Maltby, 2 Swanst. 282. So too it has been held, that, where persons are made trustees for the payment of debts and legacies, a suit may be sustained in which the trustees only are either plaintiffs or defendants, without joining the creditors or legatees for whom they are trustees, and whose rights and interests are directly involved in the case. Femi v. Craig, 3 Y. & Col. Exch. 216. Upon this principle, it has been decided by this court, that, in a bill concerning the title to the assets of an insolvent debtor, it is sufficient, without joining the creditors, to make the assignees parties, who alone have the right to claim the property, the legal title being in them ; and who are authorized and empowered, and whose duty it is, to represent the interests of and to act for all the creditors interested in the trust. Stevenson v. Austin, 3 Met. 474, 480. In like manner it has been determined that a trustee, holding a mortgage in trust for [171]*171several creditors, may maintain a bill in equity to foreclose, without joining his cestuis que trust as parties. Swift v. Stebbins, 4 Stew. & Port. 447. See also Alexander v. Cana, 1 De Gex & Sm. 415; Story Eq. Pl. §§ 142, 215, 216.

The case at bar clearly comes within the principles on which these decisions rest. The bondholders, for whose benefit the mortgage set out in the bill was made, are very numerous ; and the bonds being assignable, it would be very difficult, if not wholly impracticable, to ascertain with accuracy, at any given time, who were the owners of them, so as to make them all parties to a suit in equity. Nor is it necessary that any of them should be joined to represent their own rights and interests and those of the other cestuis que trust under the indenture. The main purpose of the instrument was to vest the property in trustees, with full power and authority to act as the representatives of the cestuis que trust in all things relating to their common rights and interests. The sole object of the bill is to secure and protect these rights and interests. The trustees have no adverse claims against their cestuis que trust. On the contrary, they only seek, as the representatives of the bondholders, to enforce the trusts created for their benefit, and in which they all have a common interest. It is sufficient therefore that the court have before them those who are the full representatives of the parties beneficially interested in the property, so that those interested will be bound by the decree.

We do not see that those persons who held bonds of the railroad corporation before the date of the mortgage stand upon any different footing, as to being made parties to the bill, from those who received their bonds afterwards. So far as they claim any benefit or interest under the indenture, they are fully represented, like the others, by the trustees. If they have not adopted the mortgage, and do not claim any interest in it, then it is clear that they need not be made made parties. Allen v. Knight, 5 Hare, 272.

Demurrer overruled.

The corporation afterwards filed an answer, admitting their execution of the mortgage to the plaintiffs, and of the assign[172]*172ment to Upton, Tappan and Hooper, the issuing of the bonds, the nonpayment of interest, and the receipt of the requests from the bondholders, as alleged in the bill.

The answer also admitted that, on the 9th of April 1850, the legislature passed an act containing the following clause: “ The proceedings of said company, whereby they conveyed, on the 15th of October last, their railroad and property, in mortgage, to Robert G. Shaw, J. Amory Davis and Charles T. Russell, trustees of the bondholders in said mortgage mentioned, to secure the holders of said bonds the payment of the same, are hereby ratified and confirmed ; ” but denied that this act, or any other act of the legislature, confirmed or ratified any contract under which the plaintiffs have any right to take possession of said road, for the purpose of foreclosing the corporation’s equity of redemption.

The answer then alleged that since the last continuance, to wit, about the middle of May 1853, Robert G, Shaw, one of the plaintiffs, had deceased, but the surviving trustees had neglected to comply with the provision of the mortgage for an immediate appointment from among the bondholders, to supply the vacancy ; that the corporation had good reason to believe, and did believe that such appointment might materially affect the continuation and issue of this suit, since they had been informed and believed that all the bondholders desire to discontinue this suit; wherefore the corporation moved for a continuance until the vacancy should be filled, and the new trustee summoned in.

The answer then alleged that a large majority, if not all, of the bondholders desired that the prayer of the bill should not be granted; and, immediately upon learning that the bill had been filed, sent to the plaintiffs a paper signed by a large majority of the bondholders, protesting against the plaintiffs’ action in bringing of this suit, and requesting them to discontinue it.

The corporation further alleged that in December 1852 and January 1853 they published notices to the bondholders of their readiness to pay all dues upon the bonds upon presentation of the coupons thereon at their treasurer’s office in Boston; and had done every thing in their power to notify all bondholders of [173]*173such readiness ; and a large amount of said coupons had been presented accordingly, and nearly all the interest overdue had been paid by the corporation, and accepted by the bondholders, and among others by the plaintiff Shaw, as holder of a large amount of said bonds; and that the corporation had been at all times ready since such publication of notice, and had done every thing in their power, to pay all the overdue interest.

Choate & Bates, for the corporation,

cited In re Harrison's Trusts, 15 Eng. Law & Eq. R. 345; 1 Cruise Dig. tit. 12, c. 4, § 37; Green v. Miller, 6 Johns. 41; Caldw. Arb. (Smith’s ed.) 203

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Bluebook (online)
71 Mass. 162, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shaw-v-norfolk-county-railroad-mass-1855.