Brehm v. Sperry, Jones & Co.

In this case the appellant on the 23rd day of February, 1899, entered into a contract with the appellees, Sperry, Jones Co., the purpose of which was expressed as follows: "Whereas, the party of the first part (appellant) is the owner of certain brewing property, real, personal and mixed, situate in Baltimore County, and used in connection with the establishment known as George Brehm's Brewery. And, whereas, the party of the first part appreciating the advantage which would be gained if his said business could be consolidated with that of other persons or corporations, so as to make the annual output not less than 560,000 barrels of beer, and reduce the cost of manufacture, is desirous of procuring the assistance of parties of the second part (appellees) in effecting such an agreement." The general undertaking of the said appellees as parties to this contract was expressed as follows: "And the said parties of the second part are willing to undertake the effort to bring about such an agreement, upon the terms herein mentioned, on or before the 1st day of March, 1899." Then follows the stipulation, "that, in consideration of the premises and of the covenants of the party of the first part hereinafter mentioned, the parties of the second part covenant that they will give their best efforts to procure corporations and individuals engaged, in the city of Baltimore or Baltimore County, in the manufacture and sale of beer, ale, porter and similar beverages, hops and malt, to enter into consolidation with each other on or before March 1, 1899, in the manner and on the terms following:"

It is then provided that the consolidated corporation shall be known as the Maryland Brewing Company of Baltimore City; "that the capital stock of the corporation should be $6,500,000.00, one-half thereof to be preferred stock, entitled to receive six per cent cumulative dividends, and the other half common stock; that the corporation should be formed under the laws of Maryland, and its purpose should be the manufacture and sale of beer, ale, etc.; that it should execute and issue its first mortgage gold bonds of $1,000,00 each, bearing interest at six per cent, payable semi-annually, the principal to be payable in thirty-nine years from date of bond, to an amount adequate for the purposes to which they were to be applied as provided in the contract, but not to exceed $7,500,000.00; that it should execute to the Citizens' Trust and Deposit Company of Baltimore a mortgage of all the property and franchises it might acquire to secure the payment of these bonds; that this mortgage should provide for a sinking fund as a provision for the ultimate redemption of the bonds and the betterment of the security thereof — the interest coupons of the bonds to be purchased for the sinking fund should be paid as they matured and the moneys paid should be part of the sinking fund; that the issue of stocks and bonds should be used entirely for the purpose of providing the portions to be received by the several constituent corporations and individuals which should enter into the consolidation ("whether said portions be cash, stocks or bonds,") and the purchase of properties to be acquired by purchase and for furnishing working capital, "not less in amount than $500,000.00," and for paying expenses and compensation attendant upon the consolidation and purchase provided for in the contract and for compensation of the parties of the second part; that each constituent member of the consolidated corporation should pass in and deliver to the said corporation all good-will, trade-marks, fixtures, and generally all property, evidences of debt, etc., appertaining to the prosecution by such member of the brewing business, with certain named exceptions; that the consolidated corporation should accept and purchase for cash the malt, hops and raw material so turned in at the invoice prices, and if there should be any ground rents on any of the property passed in and delivered to said corporation, such as could be paid off should be so paid by the grantor, and such as could not be paid off to be capitalized in a manner specified; that the said corporation should assume all existing contracts for materials which the constituent members may have entered into before the 1st of March, 1899; that the said constituent members should have on hand ready to deliver on said 1st of March, 1899, at least 20 per cent of the average yearly sale of beer as ascertained in a mode specified and should deliver or place at the option of said corporation the said quantity of beer and the said corporation was to pay at the rate of $1.50 per barrel for all excess over the said 20 per cent — provision being further made for any default in having on hand the said 20 per cent; that the issue of capital stock and bonds by the said corporation as provided for in the contract was predicated upon its "starting with the control by means of consolidation and the right of purchase of all the breweries in Baltimore City and Baltimore County, which, according to their sales of beer for twelve months preceding March 1, 1899, have an annual output and sale of beer of 700,000 barrels per annum;" the consolidation nevertheless to "take place if so much as an output of 560,000 barrels be produced, and further provided that such consolidation shall embrace" certain "breweries and individuals" that are named and specified; that "in the event that said output shall be less than 700,000 barrels, then a pro rata reduction corresponding to the amount less than 700,000 barrels, shall be made at the rate of $20.00 per barrel in the preferred and common stock and bonded indebtedness as aforesaid (said reduction should be made from the capital stock and bonded indebtedness in the relative proportions said stock and bonded indebtedness bear to each other), but before any reduction shall be made there shall be taken from the said shortage in the number of bonds in the annual output of the consolidated companies and individuals below 700,000 barrels capitalized at $20.00 per barrel as aforesaid, all cash working capital and its equivalent as aforesaid;" that the agreement was not to be binding upon the appellant, George Brehm, unless "the breweries, companies and individuals" which had been enumerated should "become a part of the said consolidation;" that each of the constituent members, corporations and individuals, of the consolidation should receive bonds or cash and capital stock in accordance with agreements between them and the said appellees — the agreements to be deposited with the consolidated company and the stocks and bonds to be issued to said members as soon as "printed or engraved and issued," and the cash to be paid them according to the several agreements — and pending preparation of certificates of stock and the bonds, temporary certificates to be issued; and that the capital stock should be divided among the shareholders on the stock-books of the consolidated corporation and they become stockholders in proportion to stocks in said corporation; that it was "distinctly understood and agreed and made a condition" of the agreement that on or about March 1, 1899, there should be elected nine directors to manage the affairs of the corporation to be formed for the ensuing year, and Henry A. Brehm, a son of the appellant, should be elected as one of the directors; that the said appellees should furnish the sum of $500,000 in cash for working capital, and for the same and for their services in procuring and arranging the said consolidation, they shall receive all the bonds and stock aforesaid not necessary for payment and delivery to the several constituent companies and individuals in accordance with their several contracts with the said appellees, and the said sum shall be furnished at the time that bonds and stock so delivered to the said appellee shall be received by them. This stipulation to be strictly in accordance with the terms of the agreement "as to the amount of stock and bonds to be issued."

The agreement then sets out stipulations on the part of the appellant that if the said appellees should succeed on or before March 1, 1899, in procuring the consolidation and the formation of a consolidated corporation upon the terms mentioned in the agreement, "and so that the aggregate output of the beer of the corporation and individuals entering into the consolidation, together with the annual output of beer of" the appellant "and of other persons and corporations who may enter into contract with" the said appellees "for sale of their brewing property, shall amount to such annual output of at least 560,000 barrels of beer * * * and embracing the companies, breweries and parties" which had been enumerated "and whose entrance into such consolidation" had "been made a condition of the" appellant "entering said consolidation" then the appellant would convey and deliver to the consolidated corporation all his good-will, trade-marks, fixtures, machinery and generally all his property and improvements used in connection with his brewery business, including chattle mortgages, books, accounts, etc., with certain designated exceptions with the stipulation in reference to ground rents upon any of the property, which by previous provisions in the contract was to be exacted of other parties entering the consolidation, that he would "accept as the consideration for said conveyance and delivery the sum of $1,050,000, payable $450,000 cash, $100,000 in bonds, $250,000 in preferred stock and $250,000 in common stock of said consolidated corporation. The said $450,000 to be paid to the appellant when he executed and delivered a deed to the real estate and delivered possession of the other property; that he would have on hand and in readiness to deliver the 20 per cent of his yearly sales of beer under the like conditions and provisions that were prescribed in previous parts of the agreement for other parties entering the consolidation; that he would cause his son, Henry A. Brehm, to enter into the employment of the consolidated company for the period of ten years from March 1, 1899, and his said son to devote his entire time and best attention to the management of the business which had been conducted by him as brewer and manager for the appellant, at the yearly salary of $12,000 — the supplemental agreement as to this employment being referred to and made a part of the agreement; that upon making conveyance of his property as aforesaid, he would not directly nor indirectly, nor as agent, etc., within the period of ten years from March 1, 1899, engage in the business relinquished by him, except for the consolidated company; and lastly, that the agreement between the parties should be assigned to the consolidated corporation when formed to be enforceable by and to bind the said corporation and its obligation to be in substitution for that of the said appellees.

On the same day that the recited agreement was made the same parties united with Henry A. Brehm in a "supplemental agreement" which, after referring to the principal agreement and the stipulation therein by the appellant "to sell and convey and assign" to the said appellees "and a corporation to be formed as therein fully mentioned, certain good-will" and other specified property appertaining to appellant's business indicates its purpose as follows, "and whereas said agreement refers to a supplemental agreement in which said property, etc., to be conveyed, assigned, and sold is to be more fully set out and described, therefore this agreement is entered into for said purpose. And whereas the said agreement of the 23rd of February, 1899, contains a provision that Heny A. Brehm shall enter into the employment of the said consolidated corporation from the 1st day of March, 1899, as to be provided in a supplemental agreement, therefore this agreement is made to fully set forth said terms of employment." It then mentions and describes the property to be conveyed, etc., and refers to a schedule of real estate annexed thereto which is to be taken as indicating the only real estate intended to be "included in or in any manner affected by said agreement;" after which there is a provision that Henry A. Brehm agrees "to enter the employment of said consolidated company for the period of ten years," etc., at the yearly salary of $12,000 and that the said company agrees to employ him, etc., which provision concludes as follows: "And it is understood that the said employment of the said Henry A. Brehm for ten years at the salary of $12,000 per year, is a condition precedent to the conveyance of any of said property mentioned in said agreement, and in case the said Henry A. Brehm is not employed at said salary and for said term by said consolidated company, then the said agreement above mentioned and this agreement and all other agreements heretofore made relative to said sale or transfer of said property mentioned in said agreements between these parties shall be considered as utterly at an end."

On the 5th of April, 1900, the appellant filed in the Circuit Court of Baltimore City his bill of complaint in this case, in which, after summarizing and setting out in substance the provisions and stipulations of the said agreement, it is alleged "that the said Maryland Brewing Company was duly incorporated under the laws of Maryland." The plaintiff's (appellant's) construction of the agreement is then stated to be that in consideration of the conveyance by him to the consolidated corporation, provided for in the agreement of his property, etc., used by him in his brewing business, "he should be paid four hundred and fifty thousand dollars in cash and one hundred thousand dollars in stock, common and preferred," of the new corporation. "And that to fix and ascertain the value of the said stock and bonds (and thus to give certainty and exactness to the value of the consideration to be received by him for his said brewing property), the total issue of said stock and bonds should be dependent upon the annual output in barrels of beer of the constituent breweries of the "corporation to be formed under the agreement." "And that the compensation of Sperry, Jones Co. (appellees), for their services in bringing about the union of the several breweries should be only the amount of stock and bonds of the Maryland Brewing Company (issued as aforesaid on the basis of the annual output in barrels of beer of the constituent breweries), left after fulfilling and satisfying the contracts for the several breweries." Therefore if there was issued by the new consolidated corporation stocks and bonds in excess of what was proper when calculated upon the basis indicated this "wouldpro tanto wrongfully decrease the real consideration to be paid" to the appellant for his property "and at the same time wrongfully and improperly increase the compensation to be paid to Sperry, Jones Co. (appellees), for their services," etc. In this connection it is alleged that the appellant "parted with his brewery property in the belief that the contract between Sperry, Jones Co. (appellees), and himself in regard to the amount of the stock, common and preferred, and of the bonds of the Maryland Brewing Company to be issued by said company, and the relation of that amount to the annual barrelage of the constituent breweries would be fully and faithfully complied with."

The bill then alleges a violation of the agreement as thus construed, in this, that the Maryland Brewing Company, the corporation formed under the agreement from the union or consolidation of the various brewery companies and individuals that entered into the scheme of consolidation outlined and provided for therein, issued outstanding securities to the amount of "twelve million eight hundred and three thousand dollars. Of these seven million three hundred and three thousand dollars were in bonds; two million seven hundred and seventy-five thousand dollars in preferred stock and a further sum of two million seven hundred and seventy-five thousand dollars in common stock." And that this issue of bonds and stock was in excess of what was authorized under the appellant's agreement with Sperry, Jones Co. (appellees), upon the basis that was to regulate such issue because instead of their being an annual output of 700,000 barrels of beer of the breweries that formed and became amalgamated with the Maryland Brewing Company, the total annual output of beer by these only amounted to about five hundred and seventy-five thousand barrels of beer per annum.

This would make, it is alleged, the total capitalization of the Maryland Brewing Company authorized by the agreement between the appellant and Sperry, Jones Co. (appellees), eleven million five hundred thousand dollars, to be divided into six million one hundred and seventy-five thousand dollars bonds, two million six hundred and sixty-two thousand five hundred dollars common stock, and two million six hundred and sixty-two thousand five hundred dollars preferred stock, making an overissue of one million one hundred and twenty-eight thousand dollars in bonds, and of eighty-seven thousand five hundred dollars in preferred, and of a like sum in common stock of the said corporation. From this it would result, it is alleged, that the stock and bonds of the said corporation, received by the appellant as a part payment of the purchase price of his brewing property, were rendered pro tanto less valuable than was contemplated and agreed upon between him and the said appellees. It is further alleged that not only has there been "a grossly excessive issue of bonds, preferred stock and common stock" as charged; but that there has also been a gross and improper overissue of bonds pro rata to the stock, common and preferred." The bill also alleges that the contract in controversy has never been assigned to the Maryland Brewing Company, but as to this no relief is asked as will be presently seen.

The prayer for relief therein is that the appellants, Sperry, Jones Co., may be required to "deliver up to the Maryland Brewing Company $1,128,000.00 par value of the first mortgage bonds of the Maryland Brewing Company $62,500.00 par value of the common stock of the said Maryland Brewing Company, and $62,500.00 par value of the preferred stock of the said Maryland Brewing Company; or, if they have not enough of said bonds and stock in their possession to comply with said requirement, that for so many mortgage bonds and for so much of said stock, preferred and common, as they fail or are unable to deliver to the said Maryland Brewing Company, that they pay to said Maryland Brewing Company either the par value of said bonds and stocks so as aforesaid undelivered, or the highest market price attained by said bond and stocks from the issue of the same to the date of the decree herein as may be most advantageous" to the appellant; and that the Maryland Brewing Company of Baltimore City may be ordered to receive the above-mentioned stocks and bonds for cancellation, retirement or use as an asset of said company. As ancillary to this relief there is also a prayer for an injunction and receiver. To this bill there was a demurrer which the lower Court sustained and then passed a decree dismissing the bill.

It is not clearly perceived to what head of equity jurisdiction the case presented here is to be referred. The bill is not filed as in the nature of one to enforce a trust by the appellant as a stockholder or member of the corporation formed as herein set out; but is essentially one to enforce independent individual contractual rights of his own growing out of a contract that antedated the corporation. It is true that it is alleged that the suit is brought as well for the benefit and advantage of all the corporations and individuals (owners of brewery property) which were constituents of the said corporation similarly situated as he was towards Sperry, Jones Co., but the contract, which it is the object of the bill to have enforced, was made with the appellant individually and not for or on behalf of any others, and no rights are attempted or designed according to its plain import to be secured thereby to others than the immediate contracting parties. It is not perceived, therefore, how, in a suit on this contract and to enforce rights therunder, there can be others not parties to it who can have any such community of interest with the appellant as to become participants with him in this suit. The suit is therefore essentially the individual suit of the appellant and must be so treated.

The ground of complaint is that the consideration upon which he parted with his property described in this bill and in the contract, though, upon its face being the same that the contract provided for, is rendered less valuable to him by reason of what he asserts was a departure, by the parties with whom he contracted, from their obligation imposed by a certain stipulation therein. The suit is brought to enforce and make effective that stipulation, and it has been suggested in argument that the bill is in the nature of a bill for a specific performance and it has been so treated throughout. It will be treated in that aspect here.

It is a proposition too familiar to need repetition that a decree for relief upon an application for specific performance is not a matter ex debito justitiae, but the application is addressed to the sound discretion of the Court to be granted or refused "upon consideration of all the circumstances of each particular case." Semmes v. Worthington et al., 38 Md. 298. See Miller Eq. Proc., p. 763, see 656 and cases there cited. InFry on Spec. Perform. sec. 44, it is said: "The meaning of this proposition is not that the Court may arbitrarily or capriciously perform one contract and refuse to perform another; but that the Court has regard to the conduct of the plaintiff and to circumstances outside of the contract itself, and that the mere fact of the existence of a valid contract is not conclusive in the plaintiff's favor." Again it is said: "A party cannot call upon a Court of equity for a specific performance unless he has shown himself ready, desirous, prompt and eager," and that specific performance is a relief which a Court of equity "will not give unless in cases where the parties seeking it come promptly, and as soon as the nature of the case will permit."

The question before the Court here arises upon a demurrer to the bill, and we are to look to the bill to see if, according to the principles stated as governing Courts of equity in cases of this nature, the showing made by the bill of complaint here is such as to entitle the appellant to the aid of the Court. The contract in question is not, in its entirety, such a one as the appellant could have had specific performance of upon an application for that form of relief. It is not a mere contract of sale on one side and purchase on the other, certain and definite in its terms. It is not a contract to do any certain and definite thing at all events by either party to it. On the part of Sperry, Jones Co. it is simply a contract "to give their best efforts" to bring about the consummation of a scheme outlined therein. If they used their best efforts to put the scheme into operation it is all they could be called upon to do; and a failure to succeed in carrying out the contract or any particular stipulation in it in spite of their best efforts would have given the appellant no cause of action against them of any kind.

On the other hand he was under no obligation to do any of the things agreed to on his part unless they succeeded in their efforts. Obviously, therefore, the contract was not of a nature to be specifically enforced in its entirety against the other parties to it on the application of the appellant. Then if he could not specifically enforce the entire contract it would seem illogical that he could so enforce a part of it or a particular stipulation of it; at least unless under some special circumstances shown to move the Court and where would be the necessity of propriety of according him such a remedy under the circumstances of this case as they have been detailed.

The suit here rests upon the fact of the general scheme provided for in the contract having gone into operation and the appellant could only have become connected with it in obedience to the obligation of his contract or by his own consent irrespective of the contract. He had the option, when Sperry, Jones Co. presented to him the result of their efforts in consummating or perfecting the scheme outlined and provided for in their contract with him, either to reject or adopt what they presented to him, if it, in any respect, did not accord with the stipulations and provisions of the contract. It was only in the event of these stipulations and provisions having been, each and all, complied with that he was bound to observe the stipulations which the contract contained on his part. If, therefore, he accepted from Sperry, Jones Co. what they had done as a consummation and a carrying out of the scheme which it was the design of the contract to perfect and put in operation, this must have been so accepted, as far as the bill shows, either because what they had done was recognized by him as a compliance with the contract or because, though not in compliance therewith, he chose to waive such compliance and accept what was presented.

If, then, he became connected with the scheme under his contract when the same had not been performed according to its stipulations by the other side, why did he do so while the contract was unperformed? If he answers, he did not know it was unperformed, why did he not know it? Ought this not to be explained to the Court? The bill nowhere shows that he was prevented by any body or by any circumstances, that would go to excuse a want of care on his part, from knowing at the time he passed over his property to the new corporation created in persuance of the plan prescribed or outlined in the contract in question whether or not the stipulations therein contained had been observed by the other parties to it. If, therefore, he did not know this, he might have known it, as far as appears. Ignorance in this regard could only have been due to the want of that diligence and caution on his part which the Court may rightfully require him to show before extending its aid in an application of this nature. It is alleged in the bill of the appellant that he parted with his property in the belief that the provisions of the contract between himself and Sperry, Jones Co., of the violation of which he now complains, would be fully and faithfully complied with. This, however, is far from saying that there was anything that prevented him, with the exercise of diligence on his part, from knowing at that time that these provisions had not been complied with, if such was the fact.

In this connection there is this further fact that the bill in this case was not filed for more than a year after the time fixed in the contract in controversy here for the completion and putting into operation of the scheme for a consolidated corporation therein provided for; and when under the contract the appellant was called upon to pass over and transfer his property to the new corporation. And notwithstanding the suit was intended to affect securities liable to fluctuations in value and changes of ownership within that time no explanation is given of this delay which, under the circumstances of this case, and in the absence such explanation is, we think, to be imputed to the appellant as laches, a defense of which the defendants (appellees), can avail under the demurrer, Noble v. Turner,69 Md. 520. It is not unreasonable to exact of the appellant this measure of vigilance in regard to his rights under the agreement in question when he is asking the aid of the equity to enforce a minor provision thereof while he is enjoying the benefit of the main provision.

The main purposes and objects of the agreement have been effected, as it would seem, from the allegations of the bill and the inferences these afford, and the appellant is and has been from the time fixed for putting into operation the scheme outlined therein in the enjoyment of the benefits accruing therefrom. The purpose of the agreement was not the mere sale of the property owned by the appellant nor was the price to be obtained by such sale the inducement for entering into it. The passing over of the property by him to the consolidated corporation was part of a general plan the object of which was, as stated in the principal agreement, "the advantage which would be gained" if his brewery business "could be consolidated with that of other persons or corporations so as to make the annual output not less than 560,000 barrels of beer;" and in carrying out this plan another object, as stated in the supplemental agreement, was to secure to his son employment by the new corporation to be formed for ten years at $12,000 per year; this last object being deemed of sufficient importance to be made "a condition precedent to the conveyance" by the appellant of any property mentioned in the agreement; and to have it provided that if his said son was not employed at said salary and for said term by said consolidated company then both the principal and supplemental agreements, and all other agreements "made relative to the sale or transfer" of the "property mentioned in said agreement" between the parties thereto should "be considered as utterly at an end." Now, as we have seen, if not so expressly stated in the appellant's bill, it is to be inferred therefrom (since the appellant's case rests on this), that the contract in question has been performed by the other parties to it in all of its features and provisions, other than those made the subject of this controversy, and that the appellant is in the enjoyment of the benefits accruing therefrom according to its main intent and purpose, that is to say he has accepted all of the things done under the contract that were advantageous to him.

It can only be fair and reasonable that the appellant should be required to be prompt and diligent in bringing to the notice of these parties when accepting from them the results of their labor and securing the benefits mainly contemplated by him in entering into the contract with them, any question that was to be made as to the construction of the contract in regard to their rights or as to how they had performed their part of it, and failing in this be deemed to have waived any such question so far at least to disentitle him to the particular relief sought, to wit, an exact performance of the contract.

These considerations are such, as to say the least, not to commend the appellant's application to the favor of the Court. They are not the only reasons, however, making against the granting of the appellant's application for specific relief. The application is not to have enforced a provision appearing in the contract in certain and definite terms indicating the exact relief to be decreed in regard to it; but it is to have enforced the appellant's construction of certain provisions therein; and it is not made clear just what is to fix and determine the terms of a decree, as shown by the fact that there has been developed in the course of the proceeding much and reasonable difference of views as to the results of that construction.

Again, the bill does not allege that the appellant was at the time of bringing suit possessed of any of the securities which he alleges to have been injuriously affected by the matters complained of and unless he is now holding these the specific relief prayed would be of no avail or benefit to him. The appellant has sought to meet this objection to his bill by saying that, it appearing that he came into possession of the securities under the contract between himself and the other parties to it, the inference is that such possession continues until the contrary is shown. We do not think the principle there invoked has any proper application here, but, be this as it may, essential facts ought to be made to appear in pleading by direct averment and not by inference.

For the foregoing reasons the Court below properly sustained the demurrer to the appellant's bill which showed no such equity as to make proper grounds for a character of relief that would, as stated by that Court, prove very oppressive to the defendants, who were parties to the contract sought to be enforced and would enure for the most part to the benefit of parties, other than the appellant, who are not shown to be entitled to any such relief and who are certainly not asking it.

As to the suggestion that the Court can, although refusing the specific relief prayed, decree other and different relief, no other kind of relief has been suggested except that the Court decree compensation to the plaintiff for the loss he alleges he has sustained; and as to this we need only say that by whatever standard this loss is to be measured we can see no more difficulty in arriving at the damages to be allowed by proof before a jury than in proceedings before an auditor.

As the appellant's applications is not refused on the "mere" ground that he has an adequate remedy at law it is not necessary to have any reference in disposing of this case to Art. 16, sec. 199 of the Code. Nor do we see any necessity under the circumstances here to treat of the power of the Court below under Art. 26, § 42 of the Code, as enacted by Act. 1896, ch. 229, nor of the power of this Court to review the exercise of it.

Since the argument of this case we have been referred to the case of Gluckstein v. Barnes, L.R. Appeal Cases, 1900, part 3 (issue of June 1, 1900), p. 240-259, as having an important bearing on the case at bar and tending to support the contention of the appellant. An examination of that case makes obvious the broad distinction between it and the case here. The jurisdiction of the Court was invoked in that case upon the ground of fraud and to enforce and protect a trust. The whole argument, both at the bar and in the opinions delivered by the judges, was directed to show: 1st, the fiduciary relation between the party sued and the fund which it was sought to have restored, and the parties interested in it; 2nd, the abuse of the trust by the party sued. These two propositions being established, nothing could be clearer than that a Court of equity had jurisdiction to afford relief. The suit was instituted by the official receiver and official liquidator of a company that had gone into liquidation. The funds in controversy were sought to be recovered for the benefit of the shareholders of the company who had subscribed to the funds of the company upon misrepresentations made by the defendant in the case in connection with others; these shareholders not knowing and having no opportunity to discover the falsity of the representations made. The defendant in the suit had with others appropriated the funds sought to be recovered to the payment to himself, and these others of profits in the purchase of property which the Court found had been taken and held by them impressed with a trust, and had concealed from the shareholders, whose subscriptions they had invited and whose money they had used in such payment, the fact that these profits were to be so paid. These parties had bought the property nominally at one price, but in reality at a much lower one. They had then proceeded to form a company of which they were trustees or directors and issued a prospectus inviting subscriptions. In this they represented that the property had been bought at the price at which it was nominally purchased and that it would be sold to the company at a price named, thus ostensibly disclosing the profits they were to make in the transaction. Out of the funds subscribed they paid themselves, in addition to these apparent profits, the difference between the nominal and the actual cost of the property to them. In this transaction the subscribers to the funds had no other relation thereto, nor to the parties in control of them than as shareholders in the company. In the case at bar the relations of the parties are established and fixed by contract, in which the rights and obligations of the respective parties are set out and carefully defined. Each party had the right to know, and as far as appears, the opportunity to see that their respective rights were accorded them in the consummation of the transaction that was the subject of the contract. The suit is by one of the parties to the contract against the other party, and the basis of the suit an alleged breach of one of it's provisions as it is construed by the party suing. The dissimilarity between this case and the case which has been just referred to could hardly be more marked. The decree of the Court below will be affirmed.

Decree affirmed with the costs to the appellees.

(Decided January 17, 1901.)