Freehold and New York Railway Co. v. Hodgson. The opinion of the court was delivered by BEASLEY, C. J. The court is clearly of opinion that the appellant is not entitled to the relief sought by him, on the ground that, even on the assumption that he had the equitable right asserted by him in his bill, such right was lost by his failure to enforce it within a reasonable time after the discovery of the fraud of which he was the victim. No opinion is intended to be intimated on any other part of the case. Let the decree be affirmed. Decree unanimously affirmed. THE FREEHOLD AND NEW YORK RAILWAY COMPANY, appellant, υ. TELFAIR HODGSON, respondent. JAMES P. LOWREY, appellant, υ. TELFAIR HODGSON, respondent. The holder of a decree against an insolvent railway corporation who, as director of a new corporation, with full knowledge, consents to the subsequent acceptance of a deed from a receiver to it, free from all encumbrances, under the statute, and votes to execute a mortgage for the security of bond-holders, which shall be a first lien-Held, not entitled, on petition, to execution and sale of land of the company, with priority. On appeal from an order advised by Vice-Chancellor Bird, whose opinion is as follows: Freehold and New York Railway Co. v. Hodgson. The petition shows that Rue obtained a decree in this court on which a balance was due, and that he (the petitioner) took an assignment for a valuable consideration of one-half of that balance. The petition also shows that the lands of the defendant company have been conveyed to the Freehold and New York Railway Company, subject to the lien of his decree, and prays for a fi. fa. to make his money. The Freehold and New York Railway Company and Mr. James P. Lowrey insist that there is nothing due to the petitioner. They urge that his interest was all sold and transferred by the proceedings in this court at the suit of Emson against the defendant company as an insolvent corporation, by the receiver appointed, who sold all the assets under an order of the court; and if not thereby sold and transferred, said interest was, in equity, sold and transferred, or that he agreed to transfer it to Lowrey; and if neither of these insistments be mentioned, then he is estopped as against the New York Railway Company. 1. I do not think the rights or interests of the petitioner were affected by anything which the receiver did. I do not find that .he was a party, in his individual capacity, in those proceedings. He was president of the defendant company, it is true, and in that suit, as such, the writ was served upon him; but our courts have uniformly held that proceedings against a defendant in a representative capacity, do not render it proper or necessary for him to answer in his individual capacity. Wade v. Miller, 3 Vr. 296; Kirkpatrick v. Corning, 11 Stew. Eq. 234. 2. Nor do I find that there is any obligation, in equity, resting on the petitioner to assign or transfer his interest in said decree by virtue of the alleged agreement between him and Mr. Lowrey. I do not find that any agreement was consummated. That the two were negotiating is very certain, but there is no proof that they were ever of one mind upon the entire scope of the propositions submitted. A fair test would be the application of the doctrine at the foundation of the jurisdiction for specific performance. It seems to me that if the respondents were complainants in such case, with the testimony as it now stands before me, their failure would be most certain, because of the absence of a valid or binding agreement. i Freehold and New York Railway Co. v. Hodgson. 3. It seems equally clear to my mind that the doctrine of estoppel cannot be made available. It is said that when the assets of the Freehold and New York Railway Company were pledged by mortgage, the petitioner was present, and that in his presence and by his vote, it was resolved that that mortgage should be the first lien on all the lands &c. of the Freehold and New York Railway Company. Supposing this to be true, it is very clear that, so far as the petitioner was concerned, everything that he did or consented to was in contemplation of the completion of his agreement, as he understood he had made it, with Mr. Lowrey. Besides, as the case stands before me, there is no room, under any circumstances, for the doctrine invoked. Mr. Lowrey is not in an attitude to stand on such a defence. He was a party to the negotiations, and knew that the alleged agreement had not been carried out. He also knew that the petitioner had no interest in the Freehold and New York Railway Company, outside of that agreement, for, although he was named as a director thereof, there was only one share of the stock in his name, and that, I think, he did not own, he being a mere figure by way of counting, to aid Mr. Lowrey in perfecting his railway project, and counting only at the instance of Mr. Lowrey. Therefore, Mr. Lowrey is not sustained by the equitable principle contended for, nor is the Freehold and New York Railway Company, for at that time, as I read the testimony, Mr. Lowrey was to all intents, the company. The entire management was in his hands. At the period of time referred to, whatever acts others joined in, it seems to me they were at the bidding or direction of Mr. Lowrey. I think the petitioner is entitled to the writ he asks for, with costs, and shall so advise. Mr. W. H. Vredenburgh, for appellants. Mr. Joseph F. Randolph, for respondent. These two appeals were argued together, and as they involve substantially the same facts, are so considered and decided. A final decree was rendered in the court of chancery on November 9th, 1874, in favor of Jacob B. Rue, complainant, against the Monmouth County Agricultural Railroad Company, Freehold and New York Railway Co. v. Hodgson. for unpaid purchase-money on sale of lands described in the decree, amounting to $2,497.70, including costs of suit. This decree was assigned by Jacob B. Rue to John S. Schultze and Telfair Hodgson, January 26th, 1875, each paying one-half of the whole sum due on it. Prior to this decree, on October 1st, 1872, the Monmouth County Railroad Company had executed to William H. Brown and William Statsir, trustees, a mortgage on their railroad, lands, ways, franchises and rights, to secure bonds to be issued, to the amount of $700,000. Two judgments were obtained by other parties prior to the decree in Rue's action. On November 23d, 1875, Christian D. Emson, a stockholder, on behalf of himself and other stockholders, filed a bill to have the company declared insolvent, charging that the $700,000 mortgage and the bonds issued thereon were illegal, and praying for the appointment of a receiver and other relief. This bill made Schultze a party as assignee of the Rue decree, but not Hodgson (as his assignment was not recorded), but Hodgson was served with process as president of the Monmouth Agricultural Railroad Company, which was made a party to the suit. On December 10th, 1875, a receiver was appointed. On December 14th, 1875, the receiver filed a petition, setting forth, among other things, that the property was encumbered with a mortgage, the legality of which was brought in question, and that the property was of a character materially to deteriorate in value pending the litigation, and praying that he might be ordered to sell the real and personal estate and franchises of the company, free and clear of and from all encumbrances, the proceeds of sale to be brought into court to abide its further order, pursuant to the statute. A decree to that effect was made December 28th, 1875, and on March 21st, 1876, the receiver sold and conveyed to James P. Lowrey all the railroad property and franchises, free and clear of all encumbrances, for the sum of $115,000. At that time only the right of way had been purchased, and some grading done. The bonds issued under the $700,000 mortgage, amounting to $71,000, were satisfied and canceled, and all debts and liens of the company settled, including the one-half of the Rue decree assigned to Hodgson. This Freehold and New York Railway Co. v. Hodgson. Lowrey claimed to own, and receipted for it to the receiver July 3d, 1877. Lowrey conveyed to the Freehold and New York Railway Company all the property transferred to him by the receiver under the decree of the court of chancery. A mortgage for $100,000, and bonds to be secured thereby on the railroad were directed, by resolution of the company, to be issued to John N. Whiting, trustee. The bonds were described therein as first-mortgage bonds, and were issued July 1st, 1878; another mortgage to secure $200,000 was executed, and bonds issued to take up the prior $100,000, and provide for the extension of the road to Keyport, and this, by its terms, was to be a first lien on the railroad. On May 20th, 1882, Mr. Hodgson filed his petition in the original action of Jacob B. Rue against the Monmouth County Agricultural Railroad Company to be made a party, and have execution for the amount claimed by him under the decree, and on October 28th, 1884, an order for execution and sale was made. From this order the present appeal was taken by Lowrey and Whiting. The opinion of the court was delivered by SCUDDER, J. The petitioner claims that being the purchaser and owner of an undivided half part of the decree rendered in favor of Jacob B. Rue, a land-owner, November 9th, 1874, he is entitled to execution to sell the lands named therein, to satisfy his debt, with interest and costs. These lands are now part of the roadbed of the Freehold and New York Railway Company, which purchased the road and franchises of the Monmouth County Agricultural Railroad Company, an insolvent corporation, and is now using them for railway purposes under its charter. The appellant, James P. Lowrey, purchased the property at the sale made by the receiver appointed by the court of chancery, and having completed the railroad, transferred and conveyed it to the Freehold and New York Railway Company. Being still interested therein as stockholder and bondholder, grantor and part owner of the decree, Lowrey was made a party under the |