Krueger v. Armitage. basis for rescission of the sale, in a suit against the company and Armitage. Such knowledge imposed on him the duty of promptly rescinding the sale, if he elected to rescind instead of affirming the sale, and suing for damages for the fraud. Conlan v. Roemer, 23 Vr. 53, 58 (Supreme Court, 1889). Complainant has failed to take any proceedings to rescind the sale as against the company, and by reason of this failure and by instituting proceedings in insolvency based, so far as appears, on his rights as a stockholder, he has terminated his right to any relief, on the basis of setting aside the sale of the stock as between him and the company, in a suit against the company alone, or in connection with Armitage, and is remitted to his remedy for the fraud, if any, committed on him by defendant in inducing him to make the purchase of the company. These frauds and misrepresentations alleged support a legal action for fraud to the same extent as they would support an equitable suit; the remedy is the same, and on the case as now presented there are no grounds for recovery in equity different from those which would support an action at law. I must, therefore, in view of the defendant's objection taken in his answer, decline to entertain the jurisdiction, so far as complainant's case is based upon alleged fraud or misrepresentation of defendant in procuring complainant's investment in the stock. Complainant alleges in his bill that the money paid by him to the company for the stock was misappropriated by defendant to his own use, and it was urged at the hearing that complainant had an equitable claim based on a right to follow this money in defendant's hands. This claim, however, is not sustained by the proofs. Moreover, the claim to follow hist money, if it existed, is an equity based solely on complainant's right to rescind a sale, which was in form at least a sale by the company to complainant, and have back his money against both the company and Armitage, on the theory that the sale was in fact a sale of Armitage's stock, for which he received complainant's money through the medium of the company, and such claim could only be enforced by a bill to rescind the sale against both the company and Armitage, filed Krueger v. Armitage. promptly after he had knowledge or was put upon inquiry, as to the relations between the company and Armitage, in reference to the issue of the stock which he purchased. He had such knowledge not later than August, 1894, and by the failure to proceed against the company to rescind, and by proceedings against the company subsequently in insolvency as a stockholder, he affirms the sale, so far as the company is concerned, and cannot recover the purchase-money or follow it in Armitage's hands as his money, in a suit to which neither the company nor its representative is a party. Another basis of equitable jurisdiction was set up in the bill, it being the claim that the company was never legally organized and never had in law any existence at all, or at least had no existence before October 16th, 1893, at which date the corporation certificate was filed in the office of the secretary of state. The contract between the company and Armitage for the purchase of the mining property was dated July 26th, 1893, the day of the signing of the organization certificate, in which the following day, July 27th, 1893, was named for the commencement of the corporate existence. It is therefore claimed that the contract for the purchase was wholly ineffectual and void as the company had no existence, and that all the acts relating to the purchase which took place prior to the organization must be held to be acts of the individuals only, including defendant, Armitage, the vendor named in the contract. But inasmuch as the company received the deeds from defendant under the contract in December, 1893, or January, 1894, and actually proceeded with its business as a de facto company until wound up by insolvency proceedings instituted in December, 1894, by complainant, who for several months previously was a director and officer of the company, and inasmuch as in the insolvency proceedings all the assets of the company, including the mining property in question, were sold by the receiver for the benefit of the company, it seems clear that the want of legal corporate existence of the company cannot be the basis for any equitable jurisdiction, in a suit of this kind, arising out of the original purchase of the stock, in which only complainant and defendant are parties, and Morehouse v. Kissam. the remedies must reach only the defendant, and in which complainant, if he recover at all, can have only a money decree against defendant. The question of the corporate existence of the company, if it be an element of any relevancy at all in this suit, is only so as a feature of the case showing want of consideration in complainant's payment or fraudulent suppression by defendant to complainant's damage. In this aspect, but in no other, as it seems to me, it may be connected with a claim actionable at law for the recovery of the money paid or damages. I will therefore advise the dismissal of the bill, without prejudice to an action at law. HENRY W. MOREHOUSE et al. 58 364 s60 443 58 364 e63 485 v. FRANK KISSAM et al. [Argued May 18th, 1899. Decided June 30th, 1899. Filed July 8th, 1899.] Several judgment creditors of a common debtor may join in a bill to set aside a fraudulent transfer made by their debtor. On demurrer. Mr. Joseph A. Beecher, for the complainants. Mr. Frank E. Bradner, for the defendants. STEVENS, V. C. The bill is filed by judgment creditors of the defendant Frank Kissam to set aside as fraudulent a transfer of a stock of goods made by him to his brother and to subject it to the lien of their executions. The judgments are six in number. Two of the executions issuing thereon have been returned unsatisfied. Under Morehouse v. Kissam. the other four, levies have been made upon the property alleged to have been fraudulently transferred. It is charged that the judgment debtor has no other property than that levied upon. The complainants say that they file their bill on behalf of themselves and such other creditors as may come in and contribute to the expenses of the suit. In a case like the present these words are, as Vice-Chancellor Pitney has shown in Iauch v. de Socarras, 11 Dick. Ch. Rep. 525, without significance. I shall treat the bill as one filed for the benefit of complainants only. To this bill Daniel Kissam, the alleged fraudulent transferee, has interposed a demurrer on the ground of misjoinder of complainants. There are other causes of demurrer assigned, but they were not seriously insisted upon and have no substance. In the case of Lore v. Getsinger, 3 Hal. Ch. 191, 205, it was decided by Chancellor Halsted that judgment creditors might, in the case of a bill like the present, join as complainants. The authority of this case is questioned on the ground that it appears to have been reversed on appeal. Lore v. Getsinger, 3 Hal. Ch. 639. The reporter says that he is unable to state on what point or points the court of appeals differed from the chancellor. The recitals of the decree made in that court show, however, that the decree of the chancellor was reversed on the merits. The opinion of the chancellor, therefore, on the point under consideration, is not challenged. The chancellor cites, as authority for his decision in that case, Bailey v. Burton, 8 Wend. 347, which, in turn, rests upon Brinkerhoff v. Brown, 6 Johns. Ch. 139, in which Chancellor Kent uses the following language: "The plaintiffs are judgment creditors at law, seeking the aid of this court to render their judgments and executions available against certain fraudulent acts equally affecting all of them. The question is whether judgment creditors whose rights are established and their liens fixed at law may not unite in a bill to remove impediments to the remedy created by the fraud of the opposite party. It is an ordinary case in this court for creditors to unite, or for one or more, on behalf of themselves and the rest, to sue the repre Morehouse v. Kissamı. sentative of their debtor, in possession of the assets, and to seek an account of the estate. This is done to prevent multiplicity. of suits a very favorite object with this court; and this principle so far controls the other rule, which preserves in some degree an analogy between pleadings in chancery and the simplicity of declarations at common law. There is no sound reason for requiring the judgment creditors to separate in their suits when they have one common object in view, which, in fact, governs the whole case. There is no particular matter in litigation peculiar to each plaintiff; and if they were obliged to sue separately it may be pertinently asked, Cui bono? Their rights are already established, and the subject in dispute may be said to be joint as between the plaintiffs on the one hand and the defendants on the other, charged with a combination to delay, hinder and defraud their creditors. If each judgment creditor was to be obliged to file his separate bill it would be bringing the same question of fraud into repeated discussion, which would exhaust the fund and be productive of all the mischief and oppression attending a multiplicity of suits. It appears to me, therefore, that the judgment creditors, in cases of fraud in the original debtor, have a right to unite in one bill to detect and suppress that fraud and to have the debtor's fund distributed according to the priority of their respective liens, or ratably, as the case may be, equally as well as they may now, in ordinary practice, unite in one bill against the legal representatives of the debtor." Chancellor Kent then goes on to show that this conclusion is not contrary to the decided cases. It is based on such solid ground that unless there is something in our own cases or practice opposed to it, it cannot be rejected. As to the cases since Lore v. Getsinger, so far as they go, they rather countenance than condemn the practice. Thus, in Annin v. Annin, 9 C. E. Gr. 184, and Thompson v. Fisler, 6 Stew. Eq. 480, it is at least indirectly approved by Chancellor Runyon. In the first case, he held that the objection, if it was an objection, could not be taken advantage of at the hearing. In the other, where the bill had been filed by one judgment creditor, and |