satisfied, together with all costs accrued or to accrue in the circuit court. The costs incurred in this court will be divided between the parties in the following proportions: Those incurred by the separate appeal of the defendant Daniel Sayer will be taxed against him. The balance of the costs will be taxed against the appellee. HUBBARD et al. v. MANHATTAN TRUST CO. (Circuit Court of Appeals, Second Circuit. April 7, 1898.) 1. EQUITY PLEADING-PARTIES. No. 73. The joinder of a party who has no interest in the suit may be taken advantage of by general demurrer for want of equity; but the defect is cur able by amendment. 2. SAME-PLEDGE. The pledgee of a chose in action, having an equitable interest therein, is a proper party plaintiff in a bill in equity with reference to such chose in action. 8. SAME. Where an assignment of a chose in action is not absolute, or its extent or validity are in dispute, or remaining rights or liabilities of the assignor may be affected by the decree in a bill in equity with reference to such chose in action, the assignor is a necessary party to such suit. His nonjoinder, however, may be cured by amendment. SAME-CASE FOR RELIEF-DEMURRER. Where a subscription certificate for railway bonds on its face entitles the subscriber merely to bonds of some one of several railways, whenever such bonds may be issued, but the subscriber's bill of complaint alleges that a supplementary agreement was made by which he was to receive bonds of one specified company, and that all the bonds of that company have been otherwise disposed of, the bill states a case for relief, and is good on demur rer. 5. SAME-RECENTLY DISCOVERED FRAUD-NECESSARY AVERMENTS. In a bill for relief from an alleged, but concealed and recently discovered, fraud, there must be distinct averments as to the time of discovery of the fraud, how the knowledge was obtained, why it was not obtained earlier, and as to diligence previously used in investigating the transaction. A mere allegation of concealment and ignorance is not sufficient. 6. SAME-STALENESS OF CLAIM-DEFENSE HOW RAISED. A defense grounded upon the staleness of the claim asserted may be made by demurrer. 7. SAME-Demurrer-AMENDMENT TO BILL. Where a bill has been dismissed on demurrer for laches, because no sufficient explanation of the delay is pleaded, the appellate court may, in the absence of positive inequity, reverse the decree and direct the allowance of an amendment to the bill. & STOCK CERTIFICATE-ASSIGNMENT. Although stock certificates provide that they shall not be negotiable without the consent of the company and transfer on its books, a complete equitable title passes by absolute and unconditional assignment. LACHES-WHAT CONSTITUTES. The defense of laches is not a mere matter of time, like limitation, but is a question of the inequity of enforcing the claim; and hence the statute of limitations does not necessarily bind the court in all cases. Each case depends upon its own circumstances, and no invariable rule as to time and vigilance can be laid down. Appeal from the Circuit Court of the United States for the Southern District of New York. Chas. H. Hanson, for appellants. John L. Cadwalader, for appellee. Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges. SHIPMAN, Circuit Judge. The complainants are Elbert H. Hubbard, as assignee of the Union Loan & Trust Company, an Iowa corporation, John Peirce, and R. J. Chase, each of said persons and their assignors being citizens of Iowa and residents of Sioux City, who are suing in their own behalf and in behalf of all others similarly situated with them who shall come into the suit. The only defendant served with process is the Manhattan Trust Company, a corporation of New York City. The circuit court for the Southern district of New York sustained the defendant's demurrer, with leave to the complainants to file an amended bill of complaint within 30 days from the date of entry of the order. No amended bill having been filed, and 30 days having elapsed, the bill was dismissed, with costs. It does not appear from the record in what respect the circuit court required amendments to be made. The grounds of demurrer were: First, for want of equity; second, that the causes of action are stale, and that so much time has elapsed that a court of equity ought not to take cognizance thereof or to give relief; third, that no case for relief is made by the bill. The bill makes the following material averments: Sundry persons, among whom were Francis O. French, the president of the defendant, and Amos T. French, his son, who was its treasurer, caused the Wyoming Pacific Improvement Company to be incorporated in March, 1888, with a nominal capital of $1,500,000, which company was to be the means for the construction of a continuous railway of about 960 miles in length from Covington, Neb., opposite Sioux City, to Salt Lake City or Ogden, and called the "Pacific Short Line." It was to be built in three sections, by three railway companies, called the "Nebraska & Western Railway," the "Wyoming & Eastern Railway," and the "Salt Lake Valley & Eastern Railway," and the stock of these companies was to be issued to the improvement company. The only portion of this through line. which was actually constructed was a part of the Nebraska road, from Covington to O'Neill, of about 129 miles, which was completed in 1890. In the latter part of 1888, the improvement company issued a circular for subscriptions in the following form. "Pacific Short Line. "The Salt Lake Valley & Eastern, the Wyoming & Eastern, and the Nebraska & Western Railway Companies, respectively, have contracted with the Wyoming Pacific Improvement Company for the construction of their several lines extending from Covington, Nebraska (opposite Sioux City, Iowa), to Salt Lake City, Utah, a distance of about 960 miles. It is proposed to consolidate these companies in one corporation, to be styled the 'Pacific Short Line.' The Wyoming Pacific Improvement Company will receive for the road, as constructed, stock and bonds as follows: $20,000 of forty years' five per cent. bonds, and $19,500 of stock for each mile of completed road. The companies above named will issue for each mile of road: $25,000 of forty years' five per cent. bonds, and $20,000 of stock. The stocks and bonds issued to and received by the Wyoming Pacific Improvement Company will be exchanged at par for stock and bonds of the Pacific Short-Line Company, when same are issued. "The Wyoming Pacific Improvement Company invites subscriptions on the following terms: Each subscriber of $10,000 or any multiple thereof, and on payment of the amount to the Manhattan Trust Company, becomes entitled to receive: $5,000 bonds, at 90. Trust receipts for fifty-five shares Wyoming Pacific Improvement -"In accordance with terms of certificate, copy of which follows: "No. Certificate of Subscription. $ 4,500 5,500 $10,000 dollars, will be entitled, "This is to certify that -, having subscribed on payment thereof to the Manhattan Trust Company, to receive trust certificate for Wyoming Pacific Improvement Company stock for.- shares (being 55 per cent. of said subscription), and also railway bonds for $ (being 50 per cent. of said subscription), which shall be delivered within two years from date, or as soon thereafter as the same are issued; subject to option to purchase said bonds at 95 and accrued interest within two years. This certificate is negotiable only by transfer on the books of the company, and with the assent of this company first obtained thereto. "Wyoming Pacific Improvement Company, "Countersigned and registered by "By -, Secretary. Manhattan Trust Company, "By President." The installments were to be paid to the defendant. Annexed to each certificate were blank receipts, to be filled out upon the payment of installments. The residents of Sioux City signed subscriptions of this form to the amount of about $337,500, of which amount A. S. Garretson and John Peirce each subscribed $50,000, John Hornick and James E. Booge each subscribed $25,000, Chase & Taylor subscribed $10,000, and Kearney & Howard subscribed $500. On April 18, 1889, before installments were paid on these subscriptions, the terms were modified so that the money from Sioux City should be deposited in a Sioux City bank, and one-half of the expenditures on the Nebraska road should be paid from that money, and one-half should be paid from the funds in the Manhattan Trust Company from Eastern subscriptions. Thereafter the subscribers herein before mentioned paid their subscriptions in full, except Chase & Taylor, who settled with the improvement company by paying a part of their amount. After these payments, Garretson, Hornick, Booge, and Peirce had in their possession their subscription certificates, all dated April 27, 1889, and installment receipts in full, with the dates of payment of each installment, in the following form, mutatis mutandis: "This is to certify that A. S. Garretson, of Sioux City, Iowa, having subscribed fifty thousand dollars, will be entitled, on payment thereof to the First National Bank of Sioux City, Iowa, to receive trust certificates for Wyoming Pacific Improvement Company stock for two hundred and seventy-five shares (being 55 per cent. of said subscription), and also railway bonds for $25,000 (being 50 per cent. of such subscription), to be delivered within two years from date, or as soon thereafter as the same are issued. Subject to option to purchase said bonds at 95 and accrued interest within two years. This certificate is negotiable only by transfer on the books of the company, and with the assent of this company first obtained thereto. Wyoming Pacific Improvement Company, "By E. E. Gedney, Pt. "New York, April 27, 1889. "First National Bank of Sioux City, Iowa, "The installments on account of the subscription represented by this certificate have been paid as follows: "At the option of the subscriber, payment may be made in full. In case of default, at option of the Wyoming Pacific Improvement Company, all further rights of the subscriber shall cease to the extent of such default; and, for all cash actually paid, there shall be requited to the subscriber, in lieu of any other interest, the amount paid in bonds at par. Interest adjusted at 6 per cent. from 1st October, 1888." Hornick's last installment was paid in February, 1890; Booge's last installment was paid in January, 1890; and Peirce's last installment was paid in November, 1890. It will be observed that the certificates which have been thus described, and which were given, entitle the owners to receive "railway bonds," without specifying the class of bonds, and are in accordance with the original circular. The bill averred that: "When your orators or their assignors contributed to the construction fund as aforesaid, it was understood and agreed by and between them and the improvement company and the Manhattan Trust Company, to the knowledge of Francis O. French and Amos T. French, that the bonds of the Nebraska and Western Railway Company, when issued, on account of said section of railway from Covington to O'Neill, and the stock of the improvement company, when issued, should, to the amounts specified in the subscription receipts and trust certificates, hereinbefore mentioned, be set apart and reserved in trust for delivery to your orators or their assignors at the times specified in said receipts and certificates respectively; and said Manhattan Trust Company received and held all the stock of the said improvement company and all the bonds of the Nebraska Railway Company with full knowledge of the trust, interest, and first and prior lien thereon in favor of the holders of said certificates for said stock and bonds, including complainants; and with the understanding and agreement on the part of said Manhattan Trust Company, improvement company, Nebraska Railway Company, and contributors to said construction fund, that said Manhattan Trust Company would receive and hold said bonds and stock in trust to be by it finally delivered to the holders of said certificates or receipts, including those now held by these complainants, under and in discharge and satisfaction of said receipts and certificates and the requirements thereof, and the oral and written agreements relative thereto herein alleged." He To John Peirce was issued, by the improvement company, a certificate that he was entitled to receive on May 1, 1891, or as soon thereafter as the same may be issued, $18,500 first mortgage 5 per cent. gold bonds, of $1,000 each, of the Nebraska & Western Railway Company, due 1929, according to the terms of subscription to said improvement company, with provisions similar to those in the Garretson certificate in regard to purchase and negotiability. received a similar certificate for $3,000 first mortgage bonds of the Nebraska & Western Railway. These two certificates were countersigned and registered by the defendant on June 28, 1890. Chase & Taylor received from the improvement company a similar certificate for $2,500, of the same bonds, countersigned and registered on September 26, 1890. Peirce also received from the defendant its certificate, registered with the improvement company, June 9, 1890, that he is entitled to receive on October 1, 1893, 2034 shares of the improvement company stock, which are deposited with and stand in the name of the defendant trustee under an agreement of October 12, 1888. He received from the defendant its similar certificate that he was entitled to receive 33 shares of the improvement company stock. Kearney & Howard received a similar certificate registered with the improvement company that they were entitled to 2 shares of its stock, which certificate was assigned to Peirce, October 9, 1890, and assented to by the improvement company. Peirce also received from the improvement company a certificate that he was entitled to $40,000 in a total proportion of $675,000, or in that proportion of any less amount earned by the syndicate of the full-paid stock of said company, to be deposited with the defendant, and deliverable after October 1, 1893. The subscriptions under which these Peirce certificates for stock only of the improvement company were issued are not set forth in the bill; but it is alleged that there was an agreement of October 12, 1888, by which all the stock of the company was, when issued, delivered to the defendant in trust for the subscribers, with a voting power upon said stock, until October 1, 1893, reserved to certain of the promoters. The bill alleges that on August 19, 1896, Chase & Taylor assigned to R. S. Chase all their rights and interests in said certificates; and that on February 15, 1890, "said Garretson, Hornick, and Booge assigned their said certificates to a partnership composed of A. S. Garretson, James E. Booge, John Hornick, D. T. Hedges, and Ed. Haakinson, who in turn at once pledged the same with the Union Loan & Trust Company, assignor of said E. H. Hubbard, as collateral security for an indebtedness greatly in excess of their actual or face value, which indebtedness is due and unpaid, and, as assignee for the benefit of creditors of said Union Loan & Trust Company, said Hubbard has become invested with all the rights of the said trust company in the premises." The bill alleges that in |