Per Curiam
The appellants who were complainants below exhibited their bill in equity in the Circuit Court for Franklin County against the appellees who were defendants below.
The bill which is very lengthy purports to contain the history and details of a very elaborate and complicated but fraudulent scheme on the part of certain persons named as defendants to defraud the complainants as stockholders of the Apalachicola Northern Railroad Company and the Saint Joseph Land & Development Com[161]*161pany which are named as defendants, by assuming to exercise powers not resting upon them either by contract with the complainants or the corporations nor as officers or stockholders of the two corporations; by dishonest financial operations; wasteful expenditure of moneys held by them in a fiduciary capacity and fraudulent operations under a contract with a Construction Company named in the bill as one of the defendants, which the same persons named as defendants controlled and in which they were financially interested.
According to the bill of complaint the scheme was originated and is being carried out by Edwards Whittaker and H. Blaksley Collins who were associated in business in St. Louis, Missouri, as Edwards Whittaker and Company; J. C. Van Riper, President of the Illinois State Trust Company and R. H. Hemphill of St. Louis, Missouri, who had for their object the ultimate ownership of all the stock owned by -the complainants in the Railway and Land Companies which are named as‘defendants; the control of those corporations by acquiring-through fraudulent means the stock therein and the bonds issued by them thus placing themselves in control of the franchises and properties of the two corporations which were alleged to be of the value of several million dollars.
It is alleged that in this fraudulent scheme the above named persons were assisted by certain other individuals among whom was the defendant Xenophan P. Wilfley.
The bill is too lengthy to be quoted in full especially as little benefit would be gained by so doing. We will undertake however to state the substance of its allegations.
The complainants and Hemphill were on the 10th and 11th days of May, 1905, and for a time prior thereto the owners of all the stock of the Apalachicola Northern Rail[162]*162road Company, a Florida corporation, which stock amounted at that time to $500,000:00’ which was the amount of its legally authorized capital stock. Ten percent. of the capital stock had been paid in. They were also the owners of all the stock of the Saint Joseph Land & Development Company, a Florida corporation, the authorized capital stock of which is not given. The railroad corporation was organized to .construct a railroad and operate it from River Junction, Florida, to St. Joseph Bay on the Gulf in this State.
That the complainants and Hemphill had acquired a right of way for the railroad between the two points; lands for turn-outs, switches, yards and depots; had •graded four miles of railroad bed and spent six thousand dollars therefor and had acquired from the State of Florida a land grant of five thousand acres per mile. That they had also acquired an option on over a hundred and ninety thousand acres of land and seven thousand acres of land with seven miles of water front at St. Joseph’s Bay.
The complainants desired to obtain funds with which to complete the road and make sufficient payments upon the lands to secure them. They needed a million and a half dollars and applied to the defendants Whittaker & Company and Van Riper to procure the loan which was to be secured by a mortgage on all of the property of the Railroad Company and of the Land Company. Whittaker & Company and Van Riper agreed to negotiate the loan for complainants and to, that end two contracts were entered into on May 10th, 1905.
One contract was between Duffy, Hemphill, Hauze and Sommers on the, one side and Whittaker & Company and Van Riper on the other. Sommers being described in the contract by mistake as being associated with Whit-[163]*163taker and Van Riper instead of with. Duffy, Hemphill and Hauze.
This contract recited that Duffy and others desired to obtain a million dollars to construct and equip the railroad for operation, the stock of which company they owned and controlled; that Whittaker and Van Riper were ready, willing and able to obtain the sum desired by using the stocks, bonds and other securities of the road “in the manner set forth in another and separate agreement dated the . . . . day of May, 1905” and that as payment for obtaining the million dollars it was “agreed that Whittaker & Company should have one-twelfth (1-12), J. C. Van Riper one-twelfth (1-12) and Sommers two-twelfths (2-12) of said Railroad Company.” The remaining eight-twelfths (8-12) were to be distributed between Hauze, Hemphill, Duffy, Trump and Beverly. All the stock was to be pledged as security for the payment of the indebtedness and the stock should be pooled and voted for a period of five years according to the terms of the “said other agreement dated .. May, 1905.” The second agreement dated May 10, 1905, was between the same parties, Sommers by mistake being described as of the second part instead of one of the parties of the first part. This agreement also recited that all of the parties were interested in the construction, equipment and operation of the railroad and that the parties of the first part had commenced the formation of a corporation to be known as The St. Josephs Land & Development Company to handle the lands and properties which they had acquired; that Whittaker and Van Riper had furnished 1500,000.00 to be used in the purchase of the lands, options upon which had been' secured as stated and that as consideration for what Whittaker and Van Riper had done they were to receive each one-seventh (1-7) of the capital [164]*164stock of the corporation. The remaining five-sevenths (5-7) were to be distributed between Hemphill, Hauze, Sommers and Duffy. It was also agreed, as in the first agreement, that all of the capital stock should be pledged as collateral security for the payment of the “indebtedness mentioned in a certain agreement dated the .. day oi May, 1905 and that it should be held in a pool and voted for a period of five years” according to the terms of the said agreement.
It is further alleged'that Whittaker and Van Riper instead of causing bonds of the Railroad and Land Companies to be issued and secured by a mortgage upon the properties of the said companies'as a means for raising the money desired, they “caused Chas. B. Duffy to enter into a contract with them dated the 11th day of May, 1905.” A copy of this contract'as well' as copies of the two before referred to are attached to the bill as exhibits A, B and C. The bill alleges that this contract of May the 11th constituted part of the scheme to injure and defraud the complainants. That contract was entered into between Chas. B. Duffy of the first part and Whit-taker & Company and J. C. Van Riper, parties of the second part. It recited that Duffy owned all the capital stock of the Railroad Company which amounted, according to the contract, to $2,000,000.00 and that he owned all the capital stock of the Land Company which the contract recited amounted to $1,000,000.00 and that Duffy desired to borrow a million and a half dollars for the purpose of building the railroad and paying for the lands.
Free access — add to your briefcase to read the full text and ask questions with AI
Per Curiam
The appellants who were complainants below exhibited their bill in equity in the Circuit Court for Franklin County against the appellees who were defendants below.
The bill which is very lengthy purports to contain the history and details of a very elaborate and complicated but fraudulent scheme on the part of certain persons named as defendants to defraud the complainants as stockholders of the Apalachicola Northern Railroad Company and the Saint Joseph Land & Development Com[161]*161pany which are named as defendants, by assuming to exercise powers not resting upon them either by contract with the complainants or the corporations nor as officers or stockholders of the two corporations; by dishonest financial operations; wasteful expenditure of moneys held by them in a fiduciary capacity and fraudulent operations under a contract with a Construction Company named in the bill as one of the defendants, which the same persons named as defendants controlled and in which they were financially interested.
According to the bill of complaint the scheme was originated and is being carried out by Edwards Whittaker and H. Blaksley Collins who were associated in business in St. Louis, Missouri, as Edwards Whittaker and Company; J. C. Van Riper, President of the Illinois State Trust Company and R. H. Hemphill of St. Louis, Missouri, who had for their object the ultimate ownership of all the stock owned by -the complainants in the Railway and Land Companies which are named as‘defendants; the control of those corporations by acquiring-through fraudulent means the stock therein and the bonds issued by them thus placing themselves in control of the franchises and properties of the two corporations which were alleged to be of the value of several million dollars.
It is alleged that in this fraudulent scheme the above named persons were assisted by certain other individuals among whom was the defendant Xenophan P. Wilfley.
The bill is too lengthy to be quoted in full especially as little benefit would be gained by so doing. We will undertake however to state the substance of its allegations.
The complainants and Hemphill were on the 10th and 11th days of May, 1905, and for a time prior thereto the owners of all the stock of the Apalachicola Northern Rail[162]*162road Company, a Florida corporation, which stock amounted at that time to $500,000:00’ which was the amount of its legally authorized capital stock. Ten percent. of the capital stock had been paid in. They were also the owners of all the stock of the Saint Joseph Land & Development Company, a Florida corporation, the authorized capital stock of which is not given. The railroad corporation was organized to .construct a railroad and operate it from River Junction, Florida, to St. Joseph Bay on the Gulf in this State.
That the complainants and Hemphill had acquired a right of way for the railroad between the two points; lands for turn-outs, switches, yards and depots; had •graded four miles of railroad bed and spent six thousand dollars therefor and had acquired from the State of Florida a land grant of five thousand acres per mile. That they had also acquired an option on over a hundred and ninety thousand acres of land and seven thousand acres of land with seven miles of water front at St. Joseph’s Bay.
The complainants desired to obtain funds with which to complete the road and make sufficient payments upon the lands to secure them. They needed a million and a half dollars and applied to the defendants Whittaker & Company and Van Riper to procure the loan which was to be secured by a mortgage on all of the property of the Railroad Company and of the Land Company. Whittaker & Company and Van Riper agreed to negotiate the loan for complainants and to, that end two contracts were entered into on May 10th, 1905.
One contract was between Duffy, Hemphill, Hauze and Sommers on the, one side and Whittaker & Company and Van Riper on the other. Sommers being described in the contract by mistake as being associated with Whit-[163]*163taker and Van Riper instead of with. Duffy, Hemphill and Hauze.
This contract recited that Duffy and others desired to obtain a million dollars to construct and equip the railroad for operation, the stock of which company they owned and controlled; that Whittaker and Van Riper were ready, willing and able to obtain the sum desired by using the stocks, bonds and other securities of the road “in the manner set forth in another and separate agreement dated the . . . . day of May, 1905” and that as payment for obtaining the million dollars it was “agreed that Whittaker & Company should have one-twelfth (1-12), J. C. Van Riper one-twelfth (1-12) and Sommers two-twelfths (2-12) of said Railroad Company.” The remaining eight-twelfths (8-12) were to be distributed between Hauze, Hemphill, Duffy, Trump and Beverly. All the stock was to be pledged as security for the payment of the indebtedness and the stock should be pooled and voted for a period of five years according to the terms of the “said other agreement dated .. May, 1905.” The second agreement dated May 10, 1905, was between the same parties, Sommers by mistake being described as of the second part instead of one of the parties of the first part. This agreement also recited that all of the parties were interested in the construction, equipment and operation of the railroad and that the parties of the first part had commenced the formation of a corporation to be known as The St. Josephs Land & Development Company to handle the lands and properties which they had acquired; that Whittaker and Van Riper had furnished 1500,000.00 to be used in the purchase of the lands, options upon which had been' secured as stated and that as consideration for what Whittaker and Van Riper had done they were to receive each one-seventh (1-7) of the capital [164]*164stock of the corporation. The remaining five-sevenths (5-7) were to be distributed between Hemphill, Hauze, Sommers and Duffy. It was also agreed, as in the first agreement, that all of the capital stock should be pledged as collateral security for the payment of the “indebtedness mentioned in a certain agreement dated the .. day oi May, 1905 and that it should be held in a pool and voted for a period of five years” according to the terms of the said agreement.
It is further alleged'that Whittaker and Van Riper instead of causing bonds of the Railroad and Land Companies to be issued and secured by a mortgage upon the properties of the said companies'as a means for raising the money desired, they “caused Chas. B. Duffy to enter into a contract with them dated the 11th day of May, 1905.” A copy of this contract'as well' as copies of the two before referred to are attached to the bill as exhibits A, B and C. The bill alleges that this contract of May the 11th constituted part of the scheme to injure and defraud the complainants. That contract was entered into between Chas. B. Duffy of the first part and Whit-taker & Company and J. C. Van Riper, parties of the second part. It recited that Duffy owned all the capital stock of the Railroad Company which amounted, according to the contract, to $2,000,000.00 and that he owned all the capital stock of the Land Company which the contract recited amounted to $1,000,000.00 and that Duffy desired to borrow a million and a half dollars for the purpose of building the railroad and paying for the lands. It was agreed on the part of Duffy that he was to organize a corporation to be a Holding Company and that the company when organized should become the owner of all the stocks and bonds of the Railroad Company and the Land Company and that the Holding Company should [165]*165pledge such stocks and bonds as collateral security for the repayment of the $1,500,000.00 on or before three years after date with five percent, interest; that the stock of the Railroad and Land Companies should be pooled for five years, be controlled by four trustees to be selected by Duffy and Whittaker and Van Riper. There should be seven directors in each of the companies, three of whom to be selected by Duffy’s trustees, three by Whittaker and Van Riper’s trustees and the seventh by the Illinois State Trust Company who was to be the trustee in both pooling agreements; that the Holding Company which was to be known as The Florida Company should have seven directors selected in the same manner; that the contract for building and equipping the railroad should be let to the Morey Engineering & Construction Company at cost and ten per cent, profit. This ' contract, according to the allegations of the bill, contained many provisions relating to the evidences of indebtedness which were to be issued by The Florida Company and the security therefor. Some reference is made to a collateral agreement and collateral notes which were to be in such form as designated by Whittaker and Van Riper; that the money derived from the notes was to be used to pay for the lands of the Land Company and the office expenses of the Railroad Company during construction; that the title to all the lands at St. Joseph’s Bay which was then in Sommers should be conveyed to the Land Company and that all contracts for lands should also pass to the Company. It was provided that the entire bond issue of the Railroad Company should “not be less than eighty-five per cent, of their par value;” that certain lands might be sold at the price fixed; that during each year the pooling agreement remained in force the President of each of the three companies should be named by the trustees selected by Duffy,[166]*166the Treasurers should be selected by the trustees named by Whittaker and Van Riper; that all moneys derived from the sale of lands, timber, turpentine rights, the operation of the railroad or from any source should be paid to the Illinois State Trust Company as Trustee and at an agreed time should be used in the payment of the indebtedness. It was further provided by this agreement that Whittaker and Van Riper should receive for their services in disposing of the notes ■ or .bonds to be issued by the holding company the sum of $750,000.00 to be paid in three years and' the collateral securities of the holding company were to be held in trust for the- payment of that sum of money as well as for the payment of the $l,500;000.00'in bonds; that when the indebtedness should be paid the securities held by the trust - company should be returned to The Florida or Holding Company. On the part of Whittaker and Van Riper it was agreed that if they were satisfied with the regularity of the proceedings in' the matter of the organization of the corporations and were satisfied with the title to the lands as well as- the value of the same they would “negotiate said notes or bonds and obtain $1,500,000.00 as aforesaid and agreed to advance the sum of $250,000.00 of this- amount to be used in exercising the option of purchase” on certain lands. The bill alleges' that these three agreements were prepared by the defendant Wilfley as attorney for Whit-taker and Van Riper and- that he also organized The Florida Company in Maine and prepared all the documents, forms, stocks, bonds and notes used in the transaction under the direction and control of Whittaker and Van Riper. It is then alleged "that the defendants Whit-taker and Van Riper having secured the agreement with Duffy of May the 11th, ■ above réferréd to, which it is alleged was part of the scheme to defraud the complain[167]*167ants, proceeded unlawfully and without authority to increase the capital stock of the railroad; that they caused it to issue $2,000,000.00' of bonds which were secured by a mortgage on all its properties, caused the Land Company to issue $2,000,000.00 of bonds secured by mortgage on all its properties and then transferred its bonds to the Illinois State Trust Company and' have not up to this time sold or negotiated any of them. At the same time and without any legal authority they issued certificates for $3,000,000.00 of stock of the Railroad Company and $2,000,000.00 of stock of the Land Company in- the name of Duffy and caused the same to be endorsed by him in blank and were by Whittaker and Van Riper delivered to the Illinois State Trust Compány which holds the same; that the issuing of such bonds and stocks was never authorized'by the complainants nor acquiesced in, consented to or ratified by them and that'no money whatever was ever paid either to the Land Company or to the Railroad Company for any of such certificates of stock or bonds; that as a part of the scheme to cheat and defraud the complainants Whittaker and Van Riper then caused The Florida Company to issue 1,500 bonds of the denomination of $1,000.00 each and 1,500 non-interest-bearing bonds-of the denomination of $300.00 each all to mature in three years; that they caused The Florida Company then to execute a mortgage to secure the payment of said bonds which aggregated $1,950,000.00 which mortgage was based solely on the stocks-and bonds of the Railroad and Land Companies above mentioned and which were on deposit with the Illinois - State Trust Company as •trustee. In addition to the above issue of bonds of $1,-950,000.00 Whittaker and Van Riper without any authority caused The Florida Company to issue $300,000.00 more of bonds which were also secured by mortgage upon [168]*168the same stock and bonds for the Railroad and Land Companies held by the Illinois State Trust Company. .
The bonds of The Florida Company, so illegally and unlawfully issued as stated, were, so the bill alleges, made payable in three years whereas the bonds of the Railroad and Land Company were payable in twenty years it. being intended and designed by Whittaker and Van Riper not to complete the railroad within three years so that it could not be earning money enough to pay off and discharge the indebtedness and that the Land Company should be so mismanaged that it would not yield enough. revenue from the sale of lands and turpentine to pay off its indebtedness and that upon the maturity of the bonds issued by The Florida Company the mortgage would be foreclosed, the stocks and bonds sold and the complainants thus deprived' of all- their rights and interests in both companies.
The bill alleges this to be the purpose of the defendants Whittaker and Van Riper. It then recites in detail the steps taken by these defendants to accomplish that purpose. It alleges that as soon as these arrangements were made Whittaker and Van Riper assumed control of the affairs of the Railroad and Land Company; that they caused a contract to be entered into between the Railroad Company and the Morey Engineering & Construction Company which, it is alleged, they owned and controlled, for the construction of the railroad and that they caused this Company to begin work on the railroad before the mortgage given by the railroad to secure its bonds was placed upon record. This was done, so it is alleged, with the fraudulent purpose of giving theConstrnction Company a lien upon the railroad properties prior to the lien of the bond holders of that company. That Whittaker and Van Riper did not advance [169]*169the $250,000.00' which the . contract made on May the 11th provided they .should furnish and that they had received $1,500,000.00 for the sale of the 1,500 five per cent, bonds issued by The Florida Company, out of which they had paid $425,000.00 on account of the purchase of lands and that they- had in their control the remainder of the proceeds- of the bonds amounting to $1,075,000.00 with which to construct railroads; that instead of using the money for that purpose they, pursuant to their scheme to defraud the complainants, mis-managed • the affairs of the railroad through the Morey Engineering & Construction Company, squandered the - money in needless and unnecessary expenses and by fraudulent claims pretended, that the total cost of building the eighty miles of railroad amounted to $1,618,321.00 of which only about $790,000.00 had been paid and that there remained due to the Morey Engineering & Construction Company a balance of $820,000.00 approximately. These claims, representations and ‘ pretenses of Whittaker and Van Riper are alleged to be fraudulent and made for the purpose of defrauding the complainants and pursuant to the scheme to acquire the ultimate ownership of the stock owned by the complainants in the Railroad and Land Company, to secure control of the corporations and thus acquire valuable properties greatly in excess of the $1,500,000.00 indebtedness of the two companies and deprive the complainants of all equity or beneficial interest therein. That as a part of this fraudulent scheme the defendants Whittaker and Van Riper refused to make any sale of turpentine rights although at one time they had an opportunity to realize over $1,000,000.00 for turpentine rights from the lands upon which the complainants had secured option; that the refusal to sell [170]*170these turpentine rights resulted in rendering the companies unable to meet the obligations' of The Florida Company when the latter became due; that Whittaker and Van Riper then procured the Morey Engineering & Construction Company in July, 1907, when the road was completed to institute pro codings in the Circuit Court for Franklin County to enforce a lien against the railroad for the alleged balance due for constructing the same; that Whittaker and' Van Riper employed the counsel for that company as well as for the Railroad Company and the Illinois State Trust Company and that the suit was 'a collusion. wholly controlled by Whit-taker and Van Riper, based upon a pretended balance due for the construction of the railroad, which balánce did not exist in fact and for the purpose of swindling and defrauding the complainants; that pursuant to the scheme and by fraud practiced on the Court they secured the appointment of Faulhaber as a receiver for the Railroad Company. In the meantime' Whittaker and Van Riper represented to complainants that in obtaining the receiver they merely desired to preserve the status of ¿11 the companies during the then financial stringency of the money market while they were in fact' secretly engaged in' an attempt to impose upon the Court and obtain a decree by consent in favor of the Morey Engineering & Construction Company against the defendants in 'the suit.
It is also alleged that in the Fall of 1907 Whittaker and Van Riper caused The Florida Company to notify the Illinois State Trust Company that there were no funds in The Florida Company with which to pay interest upon the coupons on the bonds issued by The Florida Company which coupons were due in September of that year; that the railroad had been completed to River [171]*171Junction at a cost of $1,600,000.00; that the lands at St. Joseph’s Bay had been fully paid for and that part of the purchase price of the timber lands had been paid and there was still an indebtedness on account of the purchase of the lands and on account of the balance due to the Morey Engineering & Construction Company which had a lien upon the property of the railroad; that the resources of the company amounted to a total of $4,850,000.00 and that the liabilities of the company amounted to $3,590,000.00, leaving a balance in resources over liabilities of $1,259,500.00; that Whittaker and Van Riper pursuing their oi’iginal scheme to defraud the complainants proposed to form a new company which was to become the purchaser of all the securities held by the Illinois State Trust Company for The Florida Company at a foreclosure sale of the mortgage made by the latter company. This new company was to issue $4,000,000.00 of common stock, $1,000,000.00 of preferred stock. $2,000,000.00 of ten year bpnds and $1,500,000.00 sis per cent ten year bonds, making a total stock and bond issue of $8,500,000.00. This stock and bonds. of the new company were to be distributed between the holders of the first $1,500;000.00 of The Florida Company’s bonds and the $450,000.00 non-interest-bearing bonds and the holders of the $300,000.00 second mortgage bonds and the remainder, not so distributed, was to be sold and that which was not sold to be placed in the treasury. The distribution of bonds and stock in the new company thus to be formed was to be made, so the bill alleges, in such maner as that Whittaker and Van Riper should receive $750,000.00 of preferred stock and $225,000.00 of common stock in the new company for the $750,000.00 of the Florida Company’s 'bonds which they- took as compensation for negotiating the [172]*172original loan of $1,500,000.00 on the stocks and bonds of the Railroad and Land Company; that the holders of the $1,500,000.00 Florida Company’s bonds should receive a like amount in common stock and a like amount in second mortgage bonds, or $3,000,000.00 in place of their $1,500,000.00 investment. Two million of first mortgage bonds; two million dollars of common stock and two hundred and fifty thousand dollars of preferred stock to remain in the treasury, and two hundred and seventy-five thousand dollars of common stock to be sold. This arrangement so the bill alleges would place Whittaker and Van Riper and the holders of the Florida Company’s $1,500,000.00 five per cent bonds in control of the new company and thus “freeze out all the stockholders” of the railroad and land companies.
The bill contains allegations to the effect that Whit-taker and Van Riper, pursuant to their scheme to defraud the complainants of all their interests in the railroad and land companies and the properties and equities therein which they had secured, intentionally mismanaged the affairs of the two companies,' squandered and wasted the moneys in their hands to be used in the interests of the two companies, had refused to pay the balance due on the lands, had supported the fraudulent claims of the Morey Engineering Company which the defendants owned and controlled and that their every act was part of the original scheme to defraud the complainants which they originated at the very outset of the transaction when the complainant applied to them to procure a loan of $1,500,000.00. It is also alleged that the railroad and land companies are officered, managed and controlled by the defendants and that the complainants have been denied all right to participate in the affairs of the companies, and ousted of their rights to [173]*173properties which they had originally acquired for the land company hut they had nevertheless made' written demands upon the railroad and land companies and upon Faulhaber as receiver of .the railroad company to bring such suits as might be necessary in the interest of the two companies to relieve them of the entanglements in which they had become involved by the fraud and mismanagement of the defendants, but that such request had been denied.
The bill prays that the three contracts referred to be canceled; that the bonds and mortgages of the railroad and land companies be declared a cloud upon the lands and properties of the companies; that the Illinois State Trust Company be ordered to deliver the bonds and mortgages and stocks of the railroad and land companies to the said companies respectively, and that the legally owned stocks be ordered issued to the stockholders of the companies in proportion to their interest therein set out except that Whittaker and Van Riper be divested of all interest because of their fraudulent practices; that the first and second mortgage bonds of The Florida Company be declared null and void; that the Pine Forest Land Company be enjoined from foreclosing a certain mortgage; that the amount found to be due the Pine Forest Land Company be adjudged to be a lien upon the lands and properties of the St. Joseph Land & Development Company; that all proceedings in the case of the Morey Engineering & Construction Company against the Railroad Company be stayed and enjoined forever and that an accounting be taken as to what is due the Morey Engineering & Construction Company and that amount be adjudged to be a lien upon the properties of the Railroad Company but subject to the lien existing in favor of the owners of the .original $1,500,000.00 of first mort[174]*174gage interest bearing bonds issued by The Florida Company; that Faulhaber be removed as receiver; that an accounting be taken of the proceeds of the sale of The Florida Company’s first mortgage interest bearing bonds and how much thereof has been used for the payment of lands and properties of the St. Joseph Land & Development Company and how much has been used in the construction of the railroad and that so much as may be found to have been spent in behalf of those two companies be adjudged to be liens upon their properties respectively; that an accounting be taken with the Morey Engineering & Construction Company and Whittaker and Van Riper as to what was a reasonable cost for the construction of the railroad and that a judgment be rendered in favor of the Railroad Company against the Morey Engineering & Construction Company and against Whittaker and Van Riper for the difference paid' for reasonable cost of such construction and the amount actually paid to the Engineering Company, and for other and general relief.
Demurrers to this bill were interposed by The Morey Engineering & Construction Company, by Edwards Whitaker, by E. A. Faulhaber, St. Joseph Land & Development Company, Xenophon Wilfley and R. H. Hemphill upon the grounds that there was no equity in the bill; that the complainants had no interest in the subject matter set forth; that the defendants were not necessary parties; that the bill was multifarious; that the complainants were barred by laches and that they were estopped by their own acts from setting up the matters contained in the bill and that they had failed to state any facts which were essential to entitle them to relief prayed; that the bill was deficient in certainty and for other good causes, and that so far as the Morey Engi[175]*175neering & Construction Company was concerned that the hill showed that the matters and things set forth in the bill were res adjudicata in that the same questions had been settled and decided in a suit pending in the Circuit Court of the Second Judical Circuit of the State wherein the Morey Engineering Company was plaintiff and the Illinois Trust Company,' The Florida Company and the Railroad and Land Companies were defendants. These demurrers were sustained by the' Judge of the Fourteenth Judicial Circuit acting in place of the Judge of the Second Judicial Circuit who was disqualified, and from the interlocutory order sustaining the demurrers the complainants appeal.
We think that this order should be reversed because the bill does contain equity and we think that the complainants were neither estopped nor barred by laches from seeking appropriate relief; that the bill is not multifarious as to either one of the defendants and that each one of the defendants is a proper if not a necessary part.
The bill is framed upon the theory that the complainants have been unfairly dealt with by their agents whom they employed to negotiate for them a loan of $1,500,000.00 which was to be secured by a mortgage upon properties valued at several million dollars. That by fraud which consisted of bad faith, the usurpation of authority, exercising powers beyond the scope of their agency, ignoring tire laws of the land, fraudulent issuing of certificates of stock of the railroad and land companies, wasteful and dishonest expenditure of funds held by them in a fiduciary capacity, participating with a construction company to defraud their principals to the end that they might personally reap the benefits therefrom, false promises of ’financial aid made to secure con[176]*176fidence and to be broken at an opportune time, excessive charges for compensation and bad faith, corrupt practice and dishonest methods from the inception of the original agreement during' every step taken by them under their pretended authority to the present time, the defendants Whittaker and Company and Van Riper and those associated with them, - as assistants have cheated and defrauded their employers under the guise of financial operations.
According to the bill the defendants saw an opportunity to acquire by dishonest methods and a small risk of money, a large and valuable property which belonged to the complainants and by abusing the confidence of those who employed them proceeded in the manner stated to take for themselves the profits which should have gone to their employers.
The defendants Whittaker and Company and Van Riper, according to the bill, undertook for a stated compensation to be paid by their employers, to procure a loan for them of $1,500,000.00 which was to be secured by a pledge of the stocks and bonds of the railroad and land companies whose properties' after the judicious expenditure of the money' would be reasonably worth approximately sixteen million 'dollars, against which would be the indebtedness of $1,500,000.00 plus the contingent and extraordinary expenses'' that might fee incurred in developing the properties of the two companies. For this service the defendants were to receive two-twelfths of the railroad company and two-sevenths of the capital stock of the land company. But the defendants not acting in good faith did not carry out their agreement, but by the practice of 'fraud upon the complainants in the manner stated secured for themselves and those whom they' associated with them' the control [177]*177and practical ownership of all the properties of the railroad and- land company by acquiring the controlling interest in a corporation to which passed the ownership of all the stocks and bonds of the two companies.
This alleged fraudulent conduct on the part of the defendants Whittaker and Company and Van Riper and their agents and associates we think entitles the complainants in equity to an accounting from those defendants of the moneys properly expended and the profits received by them through and by their various operations and connections in this behalf; to the cancellation of the stocks and bonds of the railroad and land companies which the defendants without authority of law issued to Duffy and deposited with the Illinois Trust Company, and to such other relief as the nature of the case may require to the end that the complainants may without injury to innocent purchasers .for value be placed in the situation they occupied upon the issue of the first 11,500,000.00 indebtedness upon the lawfully issued stock and bonds of the railroad and land companies.
Equity will lend its aid where there is not a full, complete or adequate remedy at law. See Hunter v. Bradford, 3 Fla. 269; Cordon v. Simonton, 10 Fla. 179; Broome v. Alston, 8 Fla. 307; Carter v. Bennett, 6 Fla. 214.
It is settled in this State that a court of chancery having jurisdiction for one purpose will .retain the bill as to all other matters necessary to the attainment of justice between the parties and arising out of the subject-matters. See Carter v. Bennett, supra; Farrell v. Forrest Investment Co., 73 Fla. 191, 74 South Rep. 216; Capital City Bank v. Hilson, 64 Fla. 206, 60 South. Rep. 189; Carlton v. Hilliard, 64 Fla. 228, 60 South. Rep. 220.
Even if a court of law would entertain jurisdiction to [178]*178compel the payment of damages by defendants for a breach of their contract, nevertheless as the relations between complainants and defendants involve complicated accounts, and it is not clear that the remedy at law is full and adequate, equity will entertain jurisdiction. See Craft v. Craft, 74 Fla. 262, 76 South. Rep. 772.
There is nothing in the bill to show that the complainants were guilty of laches, or that they are estopped from pursuing the relief sought by this bill, nor is the defense of res adjudicata, available to the Morey Enginering Company. The complainants were not parties to the- suit instituted by that company in the Circuit Court for Franklin County against the railroad company and others and are not bound by the orders therein. See Yullee v. Canova, 11 Fla. 9; Virginia-Carolina Chemical Co. v. Fisher, 58 Fla. 377, 50 South. Rep. 504; Bell v. Niles, 61 Fla. 114, 55 South. Rep. 392. Nor do we think the bill is multifarious. Farrell v. Forrest Investment Co., supra.
The interlocutory order of February- 5th, 1916, sustaining the demurrers to the bill of complaint is reversed.
Taylor, Whitfield, Ellis and West, J. J., concur.
Browne, C. J., concurs in the reversal.