Opinion of the Court.

in which they were not parties; that the groundwork of the plaintiff's action was the ownership of the stock; that if she was not owner of the stock she could not claim the dividends; that the examination of the ownership in the absence of those to whom the stock had been transferred, and who were in possession of it, and had regularly received the dividends, would be barren of any practical result. This judgment was rendered in 1882. But a dismissal of a suit for want of parties does not render the subject of controversy res judicata. It leaves the merits unconsidered and undisposed of. are of opinion that the defence of res judicata cannot be sustained.

We

In the same year (1882) in which the last judgment was rendered by the Supreme Court of Louisiana, the complainant filed her bill in the present suit, again without making the owners of the stock parties. She founds her claim, as in the former suit, upon her ownership of the stock, alleging that neither her mother nor her brothers ever authorized the transfer of it, and that the cancellation of the certificates was done by mistake, and was a fraud against the widow de St. Romes.

If the Supreme Court of Louisiana was right in dismissing the suit for want of proper parties, the present suit is obnoxious to the same objection. True, it has been developed in the pleadings, that the stock had been so often transferred and had become so blended with other stock, that it could not now be identified, and the present owners could not be ascertained. But is not that a result of the long delay of the complainant and those from whom she derived her interest? The present suit was not commenced until nearly thirty years after the transfer of the stock by Deverges as attorney in fact of Madame de St. Romes. Even if prescription has been sufficiently interrupted to give the complainant a locus standi in court, notwithstanding the lapse of time, she may nevertheless be subject to other disadvantages resulting therefrom which cannot be cured.

But was the Louisiana court right in its conclusion as to necessary parties? If a corporation has by negligence cancelled a person's stock, and issued certificates therefor to a

Opinion of the Court.

third party who has purchased it from one not authorized to sell it, is the true owner bound to pursue such purchaser, or may he directly call upon the corporation to do him right and justice by replacing his stock, or paying him for its value? The weight of authority would seem to be in favor of the latter alternative. See Telegraph Co. v. Davenport, 97 U. S. 369; Loring v. Salisbury Mills, 125 Mass. 138; Pratt v. Taunton Copper Co., 123 Mass. 110; Pennsylvania Railroad Co.'s Appeal, 86 Penn. St. 80; Loring v. Frue, 104 U. S. 223; Salisbury Mills v. Townsend, 109 Mass. 115.

Then will the plea of prescription avail the defendant? The Supreme Court of Louisiana decided in the second suit brought by the widow, 31 La. Ann. 224, 229, that three years' possession in good faith of a movable (which corporate stock is declared to be, Civil Code, 474 (466),) is sufficient to give good title. C. C. 3503 (3472). But that decision was based on the theory that the owner was bound to pursue her stock against those who had obtained possession of it, and in obedience to that view she had made them parties; and it was in reference to such persons that the prescription of three years was allowed. It could not apply to the defendant, because the defendant never had possession of the stock. It was answerable for carelessly and negligently allowing the transferees to obtain possession of it. It follows that the corporation cannot rely on the prescription of three years; but only on the prescription of one year, which is applicable to the commission of offences and quasi offences (and which was not pleaded); or on that of ten years, which is applicable to personal actions generally. Civ. Code, 3536 (3501), 3544 (3508). In Case v. Citizens' Bank, 100 U. S. 446, which was a suit to recover damages for refusal on the part of the Crescent City Bank to permit a transfer of shares on its books, Mr. Justice Clifford, delivering the opinion of the court, cited a number of Louisiana authorities, to show that in such a case as that the prescription of one year did not apply, but that the prescription of ten years did. The present case seems to belong to the same category. One of the cases referred to by Justice Clifford was that of Percy v. White, 7 Rob. 513, which was

Opinion of the Court.

a suit of stockholders against the directors of a bank for damages and losses sustained through their negligence, fraud and mismanagement of the affairs of the bank. The Supreme Court of Louisiana held this to be an action for damages ex contractu against mandataries, or agents. We have looked into the Louisiana reports to some extent and have not been able to find any decisions contrary to the general tenor of those on which this court relied in Case v. The Citizens' Bank. If, therefore, the defendant can only plead prescription of ten years, the question remains, whether it is available in this case; and it would seem to be clear that it is not. For though the transfer complained of took place in 1853, the widow de St. Romes brought her action in 1861, after the lapse of only eight years; and it was not terminated until 1868. The complainant commenced her action in the state court in 1876, after an interval of only eight years, and this action was not terminated until 1882. The present action was commenced in the same year. So that there has never been an uninterrupted period of ten years in which prescription could run. It follows that the defence of prescription fails. Civil Code, art. 3518 (3484); Riviere v. Spencer, 2 Martin, 79, 83; Badon v. Bahan, 4 La. Ann. 467, 470; Turner v. McMain, 29 La. Ann. 298, 300.

The defendant's counsel feeling, no doubt, the uncertainty of the defences referred to, dwelt with much emphasis and ingenuity upon the presumptive proofs of the transfer of the stock being made by Deverges with the knowledge and authority of Madame de St. Romes. It is unnecessary to say more on this subject than that the proofs referred to fail to satisfy us that any authority was given, or that the transfer was acquiesced in. The Supreme Court of Louisiana entertained the same opinion in the case brought in 1861, and very clearly expressed it, although they made no decision on the subject in consequence of what they considered a want of proper parties. The decree of the Circuit Court is reversed and the cause remanded with instructions to take further proceedings in conformity with this opinion.

Opinion of the Court.

ROBBINS v. ROLLINS'S EXECUTORS.

ROLLINS'S EXECUTORS v. ROBBINS.

APPEALS FROM THE SUPREME COURT OF THE DISTRICT OF COLUMBIA.

Nos. 237, 861. Argued April 18, 19, 1888. - Decided May 14, 1888.

Analyzing the contract which is the subject of litigation, and which is set forth at length in the opinion, this court holds that the court below was in error in sustaining and allowing against Robbins Rollins's claim for the payment of the two mortgages or deeds of trust, and subrogating him to the rights of the mortgagees Low, and the Mutual Benefit Life Insurance Company; and that the deed of subrogation from the latter company to the German-American Savings Bank was wrong and unauthorized, and should be vacated and declared void without the necessity of the intervention of a cross-bill for that purpose.

IN EQUITY. Both parties appealed from the final decree. The case is stated in the opinion.

Mr. H. H. Wells and Mr. Samuel Shellabarger for Rollins's Executors.

Mr. John Selden and Mr. George F. Edmunds for Robbins. MR. JUSTICE BRADLEY delivered the opinion of the court.

The bill in this case was filed on the 25th of October, 1883, by Edward A. Rollins, of Philadelphia, against Zenas C. Robbins, of the city of Washington, to recover $122,000, with interest, and, on the failure of Robbins to pay the same, to have certain property in Washington, of which Rollins claims to be mortgagee in possession, sold to satisfy said claim. Rollins, the complainant, claims title to the matter in suit, by purchase in November, 1880, from one Keyser, the receiver of The German-American Bank; and said bank derived title from The German-American Savings Bank of Washington by purchase in October, 1877; and the latter acquired their principal interest in the matter from John Hitz, William F. Mattingly,

Opinion of the Court.

and Charles E. Prentiss by deeds dated in May and June, 1875 the said Hitz, Mattingly, and Prentiss having procured the said interest for the said savings bank in the manner hereafter mentioned. The transactions out of which the controversy took its rise were as follows:

In 1873, the defendant Zenas C. Robbins was in possession of the property known as the Federal Building, situated on the southeast corner of Seventh Street and F Street northwest, in the city of Washington, immediately opposite the Post-Office Department Building, being one hundred feet on Seventh Street and 129 feet 3 inches on F Street. Part of this property, namely, the one hundred feet front on Seventh Street, and forty feet deep on F Street, he owned in fee simple; the rest of it, 89 feet 3 inches on F Street, and 100 feet deep, lying immediately in rear of the first part, he held by leases, with contracts giving him the privilege of purchasing the fee at any time during the continuance of the leases. This leasehold portion was divided into four lots fronting on F Street, and each running back from F Street one hundred feet in depth, and he had a separate lease and contract for privilege of purchase on each; the rent of each being sixty dollars per month, amounting to $2880 per annum for all four lots; and the purchase prices, at which he had the privilege of purchasing the lots, were respectively $8000, $12,000, $12,000, and $10,000-the whole amounting to $42,000. The lot owned by Robbins in fee, fronting on Seventh and F streets, was incumbered by two mortgages, or deeds of trusts in the nature of mortgages, one for $10,000 held by one Daniel Low, and the other for $25,000 held by The Mutual Benefit Life Insurance Company of New Jersey. There was also a judgment lien of $10,500 on the leasehold property.

In or about August, 1873, the Board of Public Works of the city of Washington cut down the grade of the streets around Mr. Robbins's corner several feet, and rendered the buildings on his property somewhat insecure; the board, pretending that they were in danger of falling, in October, 1873, ordered them to be taken down and removed. Robbins remonstrated, and some arrangement was made for strengthening them.