WILSON et al. v. SEYMOUR et al., 76 F. 678

THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court. It is conceded by counsel for the appellants that the decree rendered in the case of Seymour v. Slide & Spur Gold Mines, 42 Fed. 633, which decree was subsequently affirmed by the supreme court of the United States (Slide & Spur Gold Mines v. Seymour, 153 U. S. 509, 14 Sup. Ct. 842), estops the appellants from asserting in this suit or in any other proceeding that Ellen R. Seymour and William G.

Pell, the appellees, -are not entitled to a vendor’s lien upon the property of the corporation for the unpaid portion of the purchase money which was agreed to be paid for the mining claims in controversy. This admission, so far as it extends, is in accordance with the well-established doctrine that the stockholders of a corporation are in privity with the corporation as to all corporate matters, and, in the absence of fraud, are bound by a decree against the corporation which establishes a corporate liability, and will not be permitted to assail such decree in any collateral proceeding. Hawkins v. Glenn, 131 U.

S. 319, 9 Sup. Ct. 739; Sanger v. Upton, 91 U. S. 56, 58; Thomp. Corp. §§ 3392, 3393, and cases'there cited. It is contended, however, that while the appellants are not entitled to challenge the conclusive effect of the decree in question, in so far as the corporation is concerned, yet, by reason of certain alleged representations made to the appellants before they became shareholders, the appellants are not precluded from asserting that the decree ought not to be enforced against the corporation, since the enforcement of the same will be prejudicial to their interests as stockholders.

This is, in effect, an indirect attack upon the decree which established the vendor’s lien, because a decree against the corporation which cannot be enforced is of no value. There is little difference between the statement that the decree is erroneous, and ought not to have been rendered, and the assertion that, because of representations made to the appellants some years before the suit to enforce the lien -was brought, the decree ultimately rendered in that suit ought not to be enforced. The authority chiefly relied upon to sustain the aforesaid contention is Jones v.

Bolles, 9 Wall. 364; but that case, in our .opinion, is wide of the mark. It was a suit brought by a stockholder to restrain a person who had induced him to purchase his stock by means of the false representation that certain land theretofore conveyed by him to the company had been fully paid for, from bringing a suit against the corporation to compel the payment of a sum alleged to be due for the purchase money of the land.

The stockholder did not wait in that case, as in this, until a judgment had been obtained against the company for the amount of the purchase money, and then seek to show that it ought not to be enforced, but he ^brought a suit, against the fraudulent vendor of the stock to restrain the commencement of an action for the recovery of the purchase money of the land as soon as such suit was threatened. These appellants were advised of the commencement of the suit against the Slide & Spur Gold Mines, limited, to enforce the vendor’s lien.

They appear to have been aware of all the proceedings that were taken in that case, and they failed to insist in that suit that the ap-pellees had waived their right to a vendor’s lien by virtue of the alleged representations on which they now rely to stay the enforcement of the decree. Under these circumstances, it seems obvious that the appeal to a court of chancery to prevent the execution of the decree by reason of the alleged representations comes too late.

But it is unnecessary to rest our judgment upon this ground alone. •The relief sought in the case at bar, as we construe the complaint, is predicated on the sole ground that prior to the making of the contract of May 18, 1887, quoted in the statement, the agents of the ap-pellees, J. Fenton Seymour and Clarence P. Elder, represented to the appellants that the proposed conveyance of the Slide and Spur mining claims to the corporation would be free and clear of all liens, and particularly that such conveyance would be free of any grantor’s or vendor’s lien.

This allegation, in substance, is repeated on several occasions, and clearly constitutes the gravamen of the bill. With reference to this averment, it will suffice to say that, after a careful consideration of the evidence, we have reached the conclusion that no representation was in fact made to the effect that in case of a sale of the mining claims in question the appellees would waive or forego their light to a vendor’s lien. If representations to that effect were made by J.

Fenton Seymour, as alleged, and at the time stated, it is strange that some allusion to that fact was not made in some one of the several written contraéis that were executed subsequent to the making of such representations. It is certainly remarkable that a simulation embodying the alleged representation was not incorporated into the final contract between John Ilalde-man and the Slide & Spur (told alines, Limited, which was executed on September 10, 1887.

It is further remarkable that proof of such representations was not tendered in the suit against the corporation to establish, the lien, if it was deemed competent testimony to control the construction of the written agreements.

We think that it is altogether the more reasonable view, that nothing whatever was said at any of the interviews preceding the actual conveyance of the mining claims to the corporation, concerning a waiver of the vendor’s lien, because the legal adviser of the Scotch syndicate did not suppose that a vendor’s lien could arise, or be thereafter enforced, provided the deal was carried out on the lines proposed in the contract of August 18, 1887. That- was the view which was advocated with great confidence in the case of Slide & Spur Gold Mines v. Seymour, 153 U. S. 509, 14 Sup. Ct. 842.

ISio attempt was made in that case to control the construction of the various written agreements between the parties, which were apparently complete in themselves, by proof of antecedent oral representations that had been made by the agents of the appellees. The view thus contended for was overruled.

The court held, after a review of the various transactions, and after an analysis of all the written contracts, that the appellees had not waived their lien, and that the words, “free from all charges and incumbrances,” which are found in the contract of August 18, 1887, liad reference to prior charges and incumbrances existing against the mining claims, and did not exclude a lien which arose out of the conveyance itself. Slide & Spur Gold Mines v. Seymour, 153 U. S. 509, 519, 14 Sup. Ct. 842.

It results from these views that the decree of the circuit court dismissing the hill of complaint was right, and it is hereby affirmed.