The Elysville Manufacturing Company, vs. The Okisko Company, 5 Md. 152

Le Grand, C. J., delivered the opinion of this court. The bill in this case was filed for the purpose of enforcing" a vendor’s equitable lien. It alleges, that the complainant sold to the defendant, on the 20th August 1846, certain real estate for the sum of $25,000, current money, and on the same day executed and delivered a deed for the same, but that although the defendant entered into and has been in possession of the property ever since, it has wholly failed to pay to the complainant the consideration mentioned in the deed.

The answer admits the execution and delivery of the deed, but avers that in compliance with the understanding of the parties, the payment for the property purchased of the complainant was to be made in the stock of the defendant, and that in fulfilment of such agreement, the complainant, through its president, did subscribe for two hundred and fifty-shares of the stock of the defendant and received the certificate of the same, and as owner of said stock it has held it ever since and voted it on several occasions.

It can hardly be necessary to examine the particulars of the testimony of each witness who has been examined on the one side or the other, for it appears to us as it did to the chancellor, that it is impossible for any one to read it without coming to the belief, that in point of fact the stock was subscribed for and that it was actually received in payment of the purchase made of the complainant.

The conduct of the agent and members of the complainant, after the execution of the deed down to the time when this bill was filed, incontestibly establishes, that the contract between the parties was, that the five Messrs. Ely, who constituted the Elysville Manufacturing Company, agreed with the five persons who, with themselves, were to constitute the Okisko Company, to put in the property in question as part of the capital stock of the Okisko, provided those other persons should put in $25,000, at which price the property of the Elysville Manufacturing Company was valued.

The conduct and declarations of the Messrs. Ely, as testified to, prove this beyond all reasonable doubt. They can be reconciled with no other hypothesis. It is true the testimony of Hugh Ely denies substantially most of the important facts set up in the answer of the defendant, but the number of the witnesses whose testimony is in conflict with that gentleman’s, is so great, and their evidence so positive and unequivocal in its character, that it is impossible any court could be justified in withholding its assent to it.

But notwithstanding this, it is said that the appellant had no power under its charter to subscribe for the stock of the appellee; and moreover, even were it conceded such subscription could legally be made, under any circumstances the one in this case is not binding, because at the time of the subscription the cash payment was not made. In support of this, latter proposition, the case of the Union Turnpike Company vs. Jenkins, 1 Caine's Rep., 381, is relied upon. That case is clearly distinguishable from the one before us.

There no payment -was made, either at the time of the subscription or thereafter, by the person whom it was attempted to make responsible on his subscription, while here the whole amount of the subscription was paid; in other words, it is a completely executed contract. In the case to which we have referred, the court evidently founded their decision on the ground of the want of mutuality. The subscriber not having paid, in conformity with the authorized terms of subscription, could not have compelled the transfer of the stock to him self, he not having in any way, in part or whole, performed his contract.

But in the case before us, the Okisko Company having been fully paid by the conveyance of the properly of the appellant, and the latter being in possession of the evidence of the ownership of the stock, no question can now properly arise as to the time of the payment. The contract has been fully executed, vesting in the appellant a clear title to the stock, with authority to assign, transfer or otherwise dispose of it.

In regard to the other proposition, it is proper to be borne .constantly in recollection, that this proceeding is an application to a court of equity for the .exercise of its extraordinary powers by way of injunction, and for the enforcement of a vendor’s equitable lien, in the latter particular not unlike an application for the specific performance of a contract, which fcourts of equity never grant whenever it would be grossly violative of the principles of sound morality and justice, although, according to the technical rules of law, the contract would be valid.

Again, there is another principle which is uniformly observed, and that is, whoever invokes the aid of a court of equity in his behalf must himself do equity. In view of these principles, how is the appellant predicamentcd in a court of conscience? Thus: by its regularly appointed agents it executes and delivers to the appellee a conveyance of the property, and immediately thereafter receives, in payment therefor, a certificate of the capital stock of the appellee.

We do not perceive the force of the argument urged at the bar, that neither Mahlori Ely nor Hugh Ely were the properly authorized agents of the appellant to receive and hold the certificate of stock. Although no written evidence of their authority has been given, there are, nevertheless, circumstances in the case which compel the belief, that such authority, in point of fact, was given, and this is all that is required. Bank of United States vs. Dandridge, 12 Wheaton, 69, 70, 83.

Without pointing out distinctly to all of them, it is sufficient to say, the certificate was delivered immediately after the execution of the deed to the party whom, it is confessed, was authorised to make the acknowledgment, and by him soon after delivered to Hugh Ely, the secretary of the appellant, and by its president voted at the meetings of the appellee, with the knowledge of all but one and without objection of any of the Messrs. Ely, who constituted the Elysville company.

Besides all this, until the filing of the bill of complaint there is not the slightest evidence any of them ever pretended the purchase of the stock was not a proper and legal transaction. So far from it, a great number of witnesses have testified in the most explicit and unequivocal manner to the declarations of all the Messrs. Ely, with the exception of John, to the effect that they had a large interest in the Okisko Company. These' facts are wholly inconsistent and irreconcilable with the averment in the bill, and the testimony of Hugh, and positively affirm the truth of the answer of the' appellee.

This being so, how can the appellants, with anjr show of justice, ask the aid of a court of equity to assist them in avoiding the effect of a eontraet consummated, and which,-so long as there was any prospect of advantage being derived from it to themselves, they not only recognized, but insisted on and exercised their rights under it? The inquiry suggests the proper response. Under the circumstances wé' have mentioned, good faith and Common honesty forbid the relief asked. In the case of The Maryland Savings Institution vs.

Schroeder, 8 Gill and Johnson, 109, a case in its equity and justice very much like the one we are now considering, the court, after speaking of the objection which had been urged by the complainant in that case to the legality of the transaction, whereby his deposites had been converted into the stock of the institution, say: “We think, in the language of the authority just referred to, that it would be

an act of fraud and injustice in him; that his conscience is bound by an equitable estoppel.

Whether the corporation had a right to make the conversion against his will and consent, under the powers derived from their charter, it is not necessary now to decide; nor do the merits of this controversy depend upon the solution of that question.” Again, “To such an attempt, we think a court of chancery, in the exercise of its equity powers, ought to lend no' assistance; and that such a suitor should be turned from its doors to seek redress any where rather than in a court of conscience.” Regarding the application of the complainant in this case as equal, to say the least of it, in its disregard of good faith and fair dealing, to that of Schroeder, we apply to it the same principles and judgment, and accordingly affirm the decree of the chancellor.

Decree affirmed with costs.