and leases of May 20, 1879, which it seeks to reinstate, were a nullity, being made without authority of law.

4th. That the October agreements have never been disaffirmed by the stockholders of the Metropolitan Co. in any way, nor even by the directors, by any direct vote.

The fifth and last preliminary objection is the lapse of time, and the acquiescence of the plaintiff.

The following affirmative defenses are also urged:

1st. That the Manhattan Co. had at the time of the commencement of this action already brought its action in the Supreme Court against the New York Co., the Metropolitan Co., and all the persons who had brought actions to set aside the October agreements, in the nature of the old bill of quia timet, asking in its complaint, that all matters relating to the October agreements should be determined in that action, and that the defendants and all others should be restrained from bringing any actions on account of these agreements.

2d. The judgment of the Supreme Court in the action of the People against the Manhattan Ry. Co., entered on the 17th day of November, 1881.

3d. The judgment of the Superior Court of the City of New York, entered on the 8th of December, 1881, in the action wherein the New York Elevated Railroad Co. was plaintiff, and the Manhattan Ry. Co. and the Metropolitan Ry. Co. were defend

ants.

4th. That restitution cannot be had.

I will first consider the preliminary objections, and then the affirmative defenses, and lastly will discuss the four questions, upon which the plaintiff bases the right to equitable relief, in this

action.

The first preliminary objection urged is, that the facts elicited upon this trial, do not present a case for the interference of a Court of Equity.

It is claimed by the defendants that the plaintiff has a complete remedy at law, and, therefore, cannot seek the intervention of a Court of Equity. That the plaintiff could have sued for the rent, which is claimed to be due, under the leases and agreements of May 20th, 1879, and if the October agreements were set up as a defense, they could have been attacked upon precisely the same grounds as they have been in this action.

In Grand Chute v. Winegar, 15 Wallace, 373, it was held that a municipal corporation, obligor in a bond, cannot ask in equity that the obligee be enjoined from proceeding at law, and that the bond be surrendered, when the bill alleges that the bond was issued, without authority, in violation of law, and in fraud of the plaintiff; that the obligee knew this when he took it; that the obligee's possession is merely colorable, and that he gave no value

for it, and never had any right or title to it. Such allegations. show a complete defense to the bond at law; and a judgment against the obligee at law would give as full protection in every way to the obligor, as a decree in equity.

Mr. Justice Hunt, in this case, uses language, as follows:

"And the result of the argument is, that wherever a Court of Law is competent to take cognizance of a right, and has power to proceed to a judgment which affords a plain, adequate, and complete remedy, without the aid of a Court of Equity, the plaintiff must proceed at law, because the defendant has a constitutional right to a trial by jury. The right to a trial by jury is a great constitutional right, and it is only in exceptional cases, and for specified causes, that a party may be deprived of it."

In the 49th N. Y. 373, Allerton v. Belden, it was held that the right to apply to a Court of Equity to have a contract annulled exists only when, from the form of the security, the defense cannot be made available at law, or where the instrument sought to be avoided is a cloud upon the title to land, or some other necessity for the interposition of a Court of Equity is shown.

The opinion of Judge Rapallo, page 377, has this:

"The allegations in his complaint disclose a perfect defense at law to any action which might be brought against him on his indorsement, and no fact is stated showing any necessity for the interposition of a Court of Equity, or entitling the plaintiff to become an actor in the matter. The most usual ground for going into equity in such cases formerly was the necessity for a discovery to prove the usury.

"Bills of discovery being now abolished, some ground which formerly would have justified the filing of a bill for relief must appear in the complaint, or it shows no right of action. No authority has been cited sustaining an equitable action on such ground; but on the contrary, it has been uniformly held, that where a perfect remedy, both as to the discovery and relief, can be had at law, the action in equity cannot be maintained, and that this objection is available on demurrer."

In 62 N. Y. 562, the town of Venice v. Woodruff, the Court said, at page 467:

"Whether, therefore, the question is regarded as one of jurisdiction or practice, it is established by the later decisions that some special ground for equitable relief must be shown, and that the mere fact that the instrument ought not to be enforced is insufficient, standing alone, to justify a resort to an equitable action."

In the same book, page 533, in Fowler v. Palmer, which was the case of an action to compel the surrender of a note past due, on the ground that it had been paid, but not taken up, the Court held that the action could not be maintained in equity, that the

defense of payment was perfectly available to the plaintiff in an action upon the note, and no transfer could prejudice it.

In 79 N. Y., page 202, Globe Mutual v. Reas, it was held that an action to procure the cancellation of a written instrument cannot be maintained unless some special circumstance exists establishing the necessity of a resort to equity, to prevent an injury which might be irreparable, and which equity alone is competent to avert. It is not sufficient that a defense exists against the instrument, or that evidence may be lost.

In the case of Troy and Boston R. R. v. Boston, Hoosac Tunnel and W. Ry. Co., 86 N. Y. 127, it is said by the Court, Mr. Justice Danforth speaking:

"Although the form of actions and suits, and the distinction between actions at law and suits in equity has been abolished, a party to entitle himself to the equitable remedy by injunction must still make such a case as would, while the distinction existed, have made an equitable cause of action. This is well settled."

In Hamilton v. Cummings, 1 Johnson Ch. 517, the Chancellor states, as his conclusion from the authorities, that a resort to equity to compel the cancellation of written obligations, to be sustained, must be expedient either because the instrument is liable to abuse from its negotiable nature, or because the defense, not arising upon its face, may be difficult or uncertain at law, or from some other circumstances peculiar to the case and rendering a resort to a court of equity highly proper and clear of all suspicion of any design to promote expense and litigation.

These authorities seem to establish, with great distinctness, the rule which has obtained in our courts since the practice of allowing equitable defenses in actions at law has been established, and none of the cases cited by the plaintiff at all conflict with it.

In the case of Gould v. Cayuga' Bank, 86 N. Y. 82, it is true that the Court say that the party might have brought his action in equity to rescind the contract, and in that action might have had full relief; but in the next paragraph of the opinion the necessity of bringing in other parties is adverted to, which was to be the basis of the relief to be granted by a court of equity, and which could not be done in a court of law.

The Aberdeen Railway case, 1 Macqueen, has no application to the question now under discussion, as equitable defenses were not available in actions at law in the English courts.

Equity jurisdiction of the Court was applied in the case of McHenry v. Hazard, 45 N. Y. 580, because the rights of all the parties could not be determined in any one action at law, and also because the defendants could not be allowed at their election to postpone the litigation of the question, and subject the plaintiff to the vexation of a litigation at a distant period when the means of defense might be lost or impaired, and when he might be disabled

from contesting the validity of the claim with the same ability as at the present time. The latter ground for the entertaining of jurisdiction does not at all apply to the case at bar, because the plaintiff here can sue at once to recover rent, under the May agreements. The defendants have no rights to be enforced against the plaintiff, but the plaintiff, the aggrieved party, can at any time enforce the rights which they think they have. In order to test the question as to the validity of the October agreements, the plaintiff has only to bring its action for the rent due under the May agreement, and the matter is at once brought up. Equitable jurisdiction cannot be entertained in this case upon the ground that otherwise there will be a multiplicity of suits. No such result would ensue. If an action had been brought upon the May agreements for rent due since the making of the October agreements, and a final recovery had been had for the amount of rent due, according to the terms of the May agreement, that final judgment would have ended, as far as the Manhattan Co. is concerned, the October agreements as effectually as any final judgment which can be rendered in this action can do. The fact that the agree ments extend over a long period of years, does not alter the question. A final recovery is just as effectual, whether it be in a court of law, or a court of equity.

Even if I, however, should find, that there was no ground for equitable relief, yet, if the facts proven showed that the party was entitled to legal relief, the bill could not be dismissed. Sternberger v. McGovern, 56 N. Y. 12.

But there is another ground upon which the bill in equity can be sustained, and that is, that there could be no determination as to the validity of the October agreements without the presence of the New York Co., a party to them. The New York Co. had a right to be heard upon the question. One party cannot be released by legal proceedings from a tripartite agreement, in an action against one other party. All the parties must be brought before the Court, as all have a right to be heard upon the question as to whether the agreement which is mutual shall be broken up. Therefore, the New York Co. is a necessary party to any action seeking to avoid the October agreements, that company being one of the parties to them. If an action was brought upon the lease of May 20, 1879, the New York Co. could not have been brought in as has been done in this case, and which was the reason given in Gould v. Cayuga County Bank, for the entertaining of a bill for recision. It seems, therefore, that the first preliminary objection is not well taken.

The second preliminary objection is, that if the October agreement is fraudulent, as the plaintiff contends, then the plaintiff itself was a party to the fraud.

The defendant claims, that as this is not a suit by a stockholder

:

to set aside an agreement which is chargeable with fraud, but a suit by the corporation itself-one of the parties to the fraud, a court of equity will not interfere; and we are referred to the opinion of Mr. Justice McCrary, in the case of Louis v. Meyer, 14 Federal Reporter, 312 and 313, as an authority to sustain the proposition. The case cited, however, is not analagous to the one

at bar.

That action was to avoid railroad bonds in the hands of innocent holders, upon the ground that the directors had issued them fraudulently. The bondholders were innocent parties and not in any manner privy to the fraud perpetrated by the directors, and had no knowledge of such fraud. A stockholder could not maintain an action to set aside any fraudulent contract made by the corporation, without alleging a refusal, or good reason to suppose that the corporation would not bring any action. If this rule is to prevail, the directors of corporations may act as fraudulently as they please, and it is impossible to redress the wrongs which the corporation may have received at their hands, unless some stockholder is willing to undertake the labor and expense of an action therefor. Such cannot be the rule. Where directors are faithless to their trust, and have acted without any authority, the corporation may repudiate the acts so done, because the stockholders not only may claim but must claim their rights by and through the corporation, unless the corporation refuses to assert such rights. The directors are the agents of the corporation, and if they act without authority in making a contract for their principal, or fraudulently, certainly the principal may repudiate it. That it is the same principal who made the contract that seeks to repudiate it, is no bar to the relief.

The next preliminary objection is, that because the plaintiff claims that the agreement and leases of May 20, 1879, which it seeks to reinstate, were a nullity, being made without authority of law.

I understand that the claim that the agreements and leases of May 20, 1879, were void was abandoned upon the argument, it being conceded that under the statute of 1839 a corporation may lease its road.

But this is not at all necessary to answer the objection made. The plaintiff by its complaint does not seek to reinstate anything; it simply asks that the agreement of October 22, 1881, may be declared null and void; whether such judgment will reinstate anything or not is not a question involved in this action.

The next preliminary objection is, that the October agreements have never been disaffirmed by the stockholders of the Metropolitan Co. in any way, nor even by the directors, by any direct vote. If the directors had no authority to make the October agreements without the consent of the stockholders, then certainly no expression of dissent was necessary by the stockholders, because the agree