action for money had and received to the company's use.69 The damages suffered by the corporation by reason of the fraud committed upon it by the promoters may be recovered in an action at law. It has even been said that such an action cannot be maintained in equity.70 Equity jurisdiction of an action of that character might, however, be sustained because of the fiduciary relation of the promoter to the corporation.71 A minority stockholder's suit is, whatever the nature of the complaint, or the relief demanded therein, always an action in equity.72 § 194. The same subject.-Rescission. The corporation may either bring its suit in equity for a rescis 69. Johnson v. Sheridan Lumber Co., 51 Or. 35, 40, 93 Pac. 470, 472, citing Thompson on Corporations, (1st ed.), § 457; Pietsch v. Milbrath, 123 Wis. 647, 658-660, 101 N. W. 388, 392, 102 N. W. 343, 68 L. R. A. 945, 107 Am. St. Rep. 1017; Limited Investment Assoc. v. Glendale Investment Assoc., 99 Wis. 54, 59, 74 N. W. 633. 70. Erlanger v. New Sombrero Phosphate Co., L. R. 3 App. Cas. 1218, 1278, 6 Eng. Rul. Cas. 777, 39 L. T. N. S. 269, 27 W. R. 65, affirming, New Sombrero Phosphate Co. v. Erlanger, L. R. 5 Ch. Div. 73, 25 W. R. 436, cited in Hutchinson v. Simpson, 92 N. Y. App. Div. 382, 400, 87 Supp. 369. See ante, § 171 note. 71. Maryland.-Booth v. Robinson, 55 Md. 419, 437-438. Massachusetts.-Old Dominion Copper, etc., Co. v. Bigelow, 188 Mass. 315, 329, 74 N. E. 653, 108 Am. St. Rep. 479; same v. same, 203 Mass. 159, 202, 89 N. E. 193, 40 L. R. A. N. S. 314; Warren v. Para Rubber Shoe Co., 166 Mass. 97, 104, 44 N. E. 112, and cases cited; Peabody v. Flint, 88 Mass. 52, 56. New Jersey.-Citizens Loan Association v. Lyon, 29 N. J. Eq. 110. New York.-Brinckerhoff v. Bostwick, 99 N. Y. 185, 193, 1 N. E. 663, and cases cited. Squiers v. Thompson, 73 App. Div. 552, 76 Supp. 734, 11 Ann. Cas. 160, affirmed without opinion, 172 N. Y. 652, 65 N. E. 1122. Rhode Island.-Hodges V. New England Screw Co., 1 R. I. 312, 340, citing authorities. See ante, § 171n, and post, § 236n. 72. Corning v. Barrett, 22 N. Y. Misc. 241, 48 Supp. 1013; Land, Log & Lumber Co. v. McIntyre, 100 Wis. 245, 255-256, 75 N. W. 964, 968, 69 Am. St. Rep. 915; Jenkins V. Bradley, 104 Wis. 540, 552, 80 N. W. 1025, 1028. As to the statute of limitations applicable to such suits, see People v. Equitable Life Assurance Society, 124 N. Y. App. Div. 714, 734, 109 Supp. 453. sion,73 or after giving notice of rescission and tendering a reconveyance, maintain its suit at law for the recovery of the moneys paid by it.74 If the action is brought in equity, a tender of a reconveyance need not, according to the weight of authority, be made before the commencement of the action. The complaint in such case does not proceed upon, but prays for, a rescission of the contract, and it is sufficient to make the offer of restoration in the complaint.75 It has even been held that an offer of restoration in the complaint is not necessary, as a court of equity would in any event, by its decree, make the reconveyance of the property a condition of the repayment of the purchase price.76 § 195. Joinder of actions. Great latitude in the joinder of causes of action arising out of 73. Commonwealth S. S. Co. v. American Shipbuilding Co., 197 Fed. Rep. 780; same v. same, 197 Fed. Rep. 797, affirmed, 215 Fed. Rep. 296, 131 C. C. A. 596; Vail v. Reynolds, 118 N. Y. 297, 302, 23 N. E. 301; Heckscher v. Edenborn, 203 N. Y. 210, 220, 96 N. E. 441; Hebgen v. Koeffler, 97 Wis. 313, 320, 72 N. W. 745, 747; Erlanger v. New Sombrero Phosphate Co., L. R. 3 App. Cas. 1218, 1278-1279, 6 Eng. Rul. Cas. 777, 39 L. T. N. S. 269, 27 W. R. 65, affirming, New Sombrero Phosphate Co. v. Erlanger, L. R. 5 Ch. Div. 73, 25 W. R. 436. 74. American Shibuilding Co. v. Commonwealth S. S. Co., 215 Fed. Rep. 296, 131 C. C. A. 596; Getty v. Devlin, 54 N. Y. 403, 415; Vail v. Reynolds, 118 N. Y. 297, 302, 23 N. E. 301; Heckscher v. Edenborn, 203 N. Y. 210, 220, 96 N. E. 441; Second National Bank v. Greenville ScrewPoint Steel Fence Post Co., 23 Ohio C. C. 274, 281; Limited Investment 75. Maine v. Midland Inv. Co., 132 Iowa 272, 109 N. W. 801; Vail v. Reynolds, 118 N. Y. 297, 302, 23 N. E. 301; Heckscher v. Edenborn, 203 N. Y. 210, 220, 96 N. E. 441; Clarke v. Mercantile Trust Co., 110 N. Y. App. Div. 901, 902, 95 Supp. 1118, and cases there cited. Thompson v. Hardy, 19 S. D. 91, 102 N. W. 299, and cases cited. And see cases cited 24 Am. & Eng. Encyc. of Law, (2nd ed.), 621. See, however, Second National Bank V. Greenville Screw-Point Steel Fence Post Co., 23 Ohio C. C. 274, 281; Hebgen v. Koeffler, 97 Wis. 313, 320, 72 N. W. 745, 747-748, and Franey v. Warner, 96 Wis. 222, 235, 71 N. W. 81, 85. 76. See cases cited 24 Am. & Eng. Encyc. of Law, (2nd ed.), 621–622. promoters' frauds has generally been allowed by courts of equity. In See v. Heppenheimer,77 the receiver of an insolvent corporation brought suit in equity, claiming that certain bonds and shares of the corporation had been issued to the promoters without consideration. The action was brought to ascertain the amount of the valid bonds and to reduce the secured indebtedness of the company accordingly; to declare all those bonds that were issued without consideration void in the hands of the holders; to ascertain the amounts actually paid to the company for their shares by the respective stockholders, and to assess the amount needed to pay the creditors, against such stockholders as had not paid for their shares in full. A demurrer for multifariousness was overruled. In Shutts v. United Box, Board & Paper Co.,78 the promoters had by secret agreements with certain of the vendors to the company given to such vendors an advantage over others. These secret agreements were afterwards assumed by the company. It was held that a bill joining the corporation, the promoters, and all the favored vendors in an action for an accounting for their profits under the secret agreements was not multifarious. In Zinc Carbonate Co. v. First National Bank,79 the complaint alleged that the defendant promoters had conspired together to unlawfully obtain for themselves large secret profits, and had, in furtherance of their scheme, as officers of the fully organized corporation, allowed the defendant bank to obtain a judgment against it upon certain unfounded claims and to purchase the corporate property at a wholly inadequate price upon execution sale. The complaint of the corporation demanded an accounting by the defendants, the recovery of damages, and the nullification of the As to pleading in minority stockholders' suits, see ante, § 187. 77. 55 N. J. Eq. 240, 36 Atl. 966, (affirmed, sub nom. Naumberg v. See, 56 N. J. Eq. 453, 41 Atl. 1116), explained and followed in Shutts v. United Box, Board & Paper Co., 67 78. 67 N. J. Eq. 225, 58 Atl. 1075. 79. 103 Wis. 125, 79 N. W. 229, 74 Am. St. Rep. 845. judgment against it. The court held that the complaint did not improperly unite causes of action. In Barcus v. Gates,80 it was held that a bill against the corporation and its promoters praying for a rescission of the plaintiffs' contracts of subscription and the recovery of the moneys paid thereon, that the corporation be declared insolvent and dissolved, and that a receiver be appointed and the property remaining after the payment of its debts distributed, was not multifarious, as all the rights claimed and the relief demanded were based upon the same fraudulent scheme upon the part of the individual defendants. A prayer by the corporation for the rescission of a purchase from the promoters, may be joined with a demand for the damages sustained by reason of such purchase.81 It was held in Camden Land Co. v. Lewis 82 that a bill to compel certain defendants to account for shares of stock unlawfully received by them, to compel another defendant to account for the proceeds of certain other shares unlawfully received and sold by him, and to compel still another defendant to convey to the corporation two certain farms purchased by him for it and paid for wholly or partly with its funds or with the proceeds of its shares unlawfully issued and sold, was multifarious. It was held in Schlesinger v. Fisk 83 that an action against the promoters for the conversion of the shares and bonds of the corporation could not be joined with an action against the directors based upon their neglect and misconduct. It does not clearly appear whether or not the misconduct of the directors related to the transfer of the shares and bonds to the promoters. If it did, the directors might well have been held jointly liable with the pro 80. 89 Fed. Rep. 783, 32 C. C. A. 337, 61 U. S. App. 596. See also Ashmead v. Colby, 26 Conn. 287. 81. Old Dominion Copper, etc., Co. v. Bigelow, 188 Mass. 315, 330, 74 N. E. 653, 108 Am. St. Rep. 479. 83. 60 N. Y. Misc. 442, 113 Supp. 578. moters on the theory that they had assisted the latter in perpetrating their fraud upon the company. Causes of action arising out of separate and distinct frauds, some committed by certain defendants, some by others, cannot be joined in the same complaint.84 A demand personal to the plaintiff, cannot in general be joined with a demand made by him as a minority stockholder suing on behalf of the corporation.85 This is particularly so, if the personal demand is one for a rescission of the plaintiff's subscription, for such a demand is inconsistent with the assertion of the plaintiff's right to sue as a minority stockholder.86 § 196. Actions against promoters, transitory. An action to enforce a promoter's liability is transitory in its nature, and may be instituted wherever the defendant can be served with process.87 This is equally so whether the action be main 84. Winsor v. Bailey, 55 N. H. 218; Camden Land Co. v. Lewis, 101 Me. 78, 63 Atl. 523; Brown v. Bedford City Land & Improvement Co., 91 Va. 31, 20 S. E. 968. See post, § 243. 85. Whitney v. Fairbanks, 54 Fed. Rep. 985; Metcalf V. American School-Furniture Co., 108 Fed. Rep. 909, affirmed, 113 Fed. Rep. 1020, 51 C. C. A. 599; Pietsch v. Krause, 116 Wis. 344, 93 N. W. 9; (explained in Simon v. Weaver, 143 Wis. 330, 127 N. W. 950); Weatherbe v. Whitney, 30 Nova Scotia 104; and see Ward v. Smith, 95 N. Y. App. Div. 432, 88 Supp. 700; Stroud v. Lawson, 1898, 2 Q. B. Div. 44. See, however, some of the cases cited in the next note. In Brewster v. Hatch, 122 N. Y. 349, 350, 25 N. E. 505, 33 N. Y. St. R. 527, the trial court required the plaintiffs to elect whether they would seek to recover for the benefit of the corporation, or to recover their personal damages. 86. Brown v. Bedford City Land & Improvement Co., 91 Va. 31, 20 S. E. 968, and authorities cited. Day v. National Mutual Building & Loan Assoc., 53 W. Va. 550, 44 S. E. 779 Cf. Barcus v. Gates, 89 Fed. Rep. 783, 32 C. C. A. 337, 61 U. S. App. 596; Ashmead v. Colby, 26 Conn. 287; City Bank of Macon v. Bartlett, 71 Ga. 797. See post, § 242. 87. See Bigelow v. Old Dominion Copper, etc., Co., 74 N. J. Eq. 457, 509, 71 Atl. 153, where it was claimed that the general rule that the plaintiff may choose his own forum in any jurisdiction where the defendant may be found, does not |