Board, besides the original title, evidences of, peared before the commissioners with any derivative title, it has been held that the com-claim of their own. In that early day there missioners decided upon both, and that the must have been great ignorance among the confirmation operated as a grant to the claim- people, of the forms of legal papers. And ant, although his name was omitted in the this fact was, doubtless, considered by the comform of confirmation. This was expressly missioners in reaching the conclusion which ruled in Bissell v. Penrose, 8 How., 317. The they did. They treated the papers of Labeaume claim there was confirmed to Benito, Antoine, as a transfer to him of all the interest that Hypolite, Joseph and Pierre Vasquez, or their the heirs of Dodier had in the premises and, legal representatives, according to the conces- having the power to adjudicate the title to sion. Rudolph Tillier presented the claim for the claimant on such papers as he presented, confirmation and produced the concession, with their decision, having been confirmed by Conwritten evidence of his title, which would ap-gress, whether right or wrong, is final. pear to have been imperfect. It was argued An attempt was made in this case to show there, as here, that the Act of 1836 confirms that the persons from whom the plaintiffs seek only the Spanish concession in the abstract, to deduce their title were claimants before the but the court held otherwise, and decided that Board of Commissioners, but this attempt the title was confirmed to Tillier, the assignee, wholly failed. It is unnecessary to discuss the as claimant. Besides the general reasoning on piece of evidence introduced for this purpose, 262*] which this opinion is based the *decision for the Supreme Court of Missouri in their in Strother v. Lucas, 6 Pet., 772; 12 Pet., 458, opinion have said all that can be said on the and the usages of the Land Office are cited in subject. Connoyer v. Schaeffer, 48 Mo., 166. support of it. The judgment is affirmed. *ELIZA S. HOUSE et al., Appts., [*42 V. ANDREW MULLEN, et al. (See S. C., 22 Wall., 42-47.) ment. no interest of any kind in the suit, is fatal to the Shortly after the decision in Bissell v. Penrose, the case of Boone v. Moore, 14 Mo., 420, arose in Missouri. The confirmation in that case was to David Cole, or his legal representatives. The claim was filed by Jesse Richardson, who produced before the old Board his Proper parties-dismissal for want of—judgderivative title papers. The Supreme Court of Missouri held that the confirmation was to Richardson, and not to the legal representatives of Cole, on the authority of Bissell v. Penrose, and this, too, while evidently doubting the propriety of that decision. The same point was again presented to the Supreme Court of Missouri in Carpenter v. Rannells, 45 Mo., 584, with the same result. The record in that case shows that James Bankson, as assignee of John Butler, under an executory contract, 4. Where a bill is dismissed for misjoinder of claimed the land, and produced to the Board parties, the dismissal should be without prejudice the evidence upon which a confirmation was to another suit, or should state the grounds of disgranted. The judgment of confirmation, how-missal, and if it is dismissed generally, the decree will be reversed. ever, was to John Butler, or his legal representatives, but the court held, on the authority of Bissell v. Penrose and Boone v. Moore, that the legal effect of this confirmation was to vest the title in Bankson. The principles in this case are examined and adhered to in the case of the present plaintiffs against Labeaume's heirs, reported in 45 Missouri, 39. The case of Carpenter v. Rannells, ante, 77, was brought to this court, and it was held, substantially, that Bankson, having presented the claim and filed his paper title with it, the confirmation inured to him, and that no other representative of Butler, whether hereditary or by contract, had any right, legal or equitable, to the premises in controversy. 3. It does not conclude either party upon the merits of the matter in controversy, and the plaintiffs or anyone of them may bring another bill, with proper parties, in regard to the subject-matter of the first one. [No. 200.] Submitted Feb. 24, 1875. Decided Apr. 5, 1875. A United States for the Middle District of PPEAL from the District Court of the Alabama. The case is stated by the court. Mr. Justice Miller delivered the opinion of the court: This is a bill in chancery brought by Eliza House, Mary D. Hunter and Charles Hunter against the defendants, who are fifteen or The defendants demurred twenty in number. and the demurrer was sustained by the court. and the bill dismissed. The original bill was filed by Eliza House alone, but obtaining leave to amend before the demurrer was interposed, an entire new bill was filed to which the demurrer applies. It would seem that these cases should be decisive of the question at issue. Instead of this, the plaintiffs seek to overturn the authority of Bissell v. Penrose, on which all the cases rest. It is too late to question the soundness of that decision. To permit it to be done now would not only unsettle titles to which this decision is applicable, but weaken confidence The bill sets forth that, on the 16th day of in all titles in Missouri growing out of Span- March, 1838, the said Eliza, being then a mar263*] ish *concessions. There can be no hardNOTE.-Relief denied from lapse of time in ship in applying the doctrine of Bissell v. Pen-equity-see note to Pratt v. Carroll, 3 L. ed. U. S. rose to the facts of this case. After the lapse of more than sixty years Labeaume's title is disputed in behalf of persons who never ap 627. Statute of Limitations as applicable to equity cases-see note to Thomas v. Harvie 6 L. ed. s. 287. 1 ried woman, a conveyance was made by Rich, that the statement of this fact is omitted by a ard I. Lawrence and wife to Andrew Gibson, mere accident. But we have no evidence that for the consideration of $2,700, of the half or Mary Hunter is the child of Eliza House, exundivided moiety of lot 22 in the Town of Sa- cept the statement of appellant's brief; [*46 lem, Alabama; that, by mistake, this was re- nor could any evidence of that fact be adcorded as a conveyance of the half of the un-mitted under this bill. divided moiety of said lot; that the convey- The authorities are very clear that such a 43*] ance in terms *was in trust for the bene- misjoinder, or the bringing a suit by a plainfit of said Eliza, during her natural life, after tiff who shows no interest of any kind in the which the trustee was to convey in fee simple suit, is fatal to the bill if taken on demurrer to such child or children as she might have or answer. We must in this suit hold that living at her death. She alleges that Gibson they have no interest, as none is alleged, though died in 1841, and her husband, Richard House, it seems almost incredible that when this was in 1868; that. from the date of the deed from distinctly pointed out as a ground of demurrer Lawrence to Gibson, she lived on the premises the counsel did not ask leave to amend, either or received the rents and profits until 1846; by stating their interest or striking out their that during this time, her husband and her-names. self removed from Alabama to Florida; that The demurrer was, therefore, properly susdefendants are now in possession of the lot tained and the bill dismissed, as the presumpor parts of the same, claiming to own the tion must be that no leave to amend was asked. whole of it and asserting title under a deed Story, Eq. Pl., §§ 509, 544; Mitf. Eq. Pl., 6th which they allege to have been made by her Am. ed., 177 (marg.), 154; Page v. Townsend, husband and herself in 1846, to one Walker, which deed she says she did not sign and seal as her voluntary act and deed, freely and without compulsion of her said husband. She prays for the appointment of a trustee in place of Gibson, who is dead. She also prays for a partition with defendants, for an account of rents and profits and for such other and further relief as to equity belong. The grounds of demurrer set forth were: 1. That if complainants have any right, as shown by the bill, they are separate and distinct and cannot be joined in this suit. 2. That the bill does not show any interest of Mary and Charles Hunter in the subject matter of the litigation. 3. That the defendants are improperly joined, as they have separate and distinct interests which cannot be joined in one suit. 4. And that the claim is stale and barred by the Statute of Limitations, and by be long acquiescence of plaintiffs in defendant's possession as shown by the bill. This latter ground is sufficiently answered by the averment of the bill that the plaintiff, Eliza, was a feme covert, from the time she parted with the possession until the year 1868, the bill being filed in 1871. Sim., 395; King v. Machado, 4 Russ., 225; Cuff v. Platell, 4 Russ., 242; Bill v. Cureton, 2 Myl. & K., 503, 512. But when a bill is dismissed for misjoinder of parties, it settles nothing but that the suit cannot progress in that condition; and if parties will not or cannot amend so as to remove that difficulty, the court will go no further, but will dismiss the bill. It does not and cannot, in the nature of things, conclude either party upon the merits of the matter in controversy, and the plaintiffs or any one of them should be at liberty to bring another bill, with proper parties, in regard to the subject-matter of the first one. And the right to do this cannot be doubted when it appears plainly that the first bill was dismissed either for want of necessary parties or for a misjoinder of parties, or when by the terms of the decree the bill is dismissed without prejudice. Story, Eq. Pl., sec. 541. But neither of these things appear in the present case. There are grounds stated in the demurrer which would, if sustained, be a bar to any other suit, to wit: staleness of the claim, Statute of Limitations, and long acquiescence in the possession and claim of title by defendants. It does not appear by the decree, or by The third ground is equally indefensible, as the order sustaining the demurrer, on which of the bill shows that defendants all claim the grounds set out in the latter it was through a deed from her, which deed she al-*sustained, or on what ground_the_bill [*47 leged to be void for want of her free consent in making it. If the case should come to a hearing the contest must turn upon the validity of this deed, in which all the defendants have a common interest. Besides, she asks to have her half divided or partitioned off to her. To obtain that she is not obliged to file a separate bill against each of the twenty defendants, if she is entitled to a half of the whole lot on partition. The first two causes of demurrer may be treated together. The bill is fatally defective in joining Mary E. D. Hunter and her husband, Charles Hunter, as plaintiffs, and making no allegation or averment of any interest whatever which they have in the matter. It is suggested by counsel for appellants that Mary Hunter is the child of Eliza House, and was dismissed. As the record stands, this decree might be pleaded successfully as a bar to any other bill brought by Eliza House, or by Mary Hunter, her child, in assertion of her right to this lot, though we are of opinion that the only defect in the bill is that it shows no interest in Mary Hunter, while it does show a good cause for equitable relief on the part of Eliza House. If the decree had dismissed the bill without prejudice (Story, Eq. Pl., sec. 541), or had stated as the ground of dismissal the misjoinder of parties, or want of interest in two of them, we would have affirmed it; but, to prevent what may be a great injustice, we must reverse the present decree and remand the case, with directions to allow plaintiffs to amend their bill as they may be advised, and if they fail to do this within a reasonable time, to dismiss it without prejudice. JOHN N. BAILEY, late Collector of Internal Revenue, Plff. in Err., บ. THE NEW YORK CENTRAL & HUDSON (See S. C., 22 Wall., 604-641.) Certificates of railroad company, when dividends liable to tax-consolidated company, when assumes debts of old company-assump tion of tax-serin dividends. certificate witness a dealing between the Company and its stockholders, based upon earnings theretofore made, in the course of which a written or printed instrument had been delivered by the Company to each of its stockholders as evidence of such earnings, and of their having been expended in constructing and quipping the road, and in the purchase of real estate and other property; also that they were to be reimbursed at some convenient future period; two different methods of redeemUnder that clause of the Internal Revenue Acting such instruments being left optional with which provides that road company, in scrip or money, are proper sub-the Company, viz.: its payment out of future jects of taxation, and that the company declaring earnings, or its conversion into stock, divisuch dividends in scrip or money shall pay a tax dends thereon being in the meantime payable of 5 per cent., certificates issued by a company to its stockholders declaring that such stockholders at the same rates and times as upon shares are entitled to 80 per cent. of the capital stock held of the capital stock. by them with dividends thereon, are dividends of scrip within the meaning of the Act levying the tax. (1) The paper, therefore, is, upon its face, evidence for each stockholder to persons with whom he may deal against the Company: (a) Of previous earnings. (b) Of the expenditure or investment of such earnings to a specified large amount in construction, equipment and purchase of prop 2. The new company formed by the New York Act of Consolidation of the New York Central and Hudson River Railroads, assumed all the obligations of the old companies, except mortgages, to the same extent as if such debts or liabilities had been incurred or contracted by such new Company: 3. The payment of a tax levied before consolidation, upon one of the consolidated Companies, un-erty; and, der the Internal Revenue Act, is one of the obliga- (c) That certain dividends will accrue pari tions which the new company assumed when the consolidation became complete. passu etc., upon the amount specified therein. (2) It is also upon its face notice to each stockholder and his assignees, that the Company has a right to call it in whenever it may choose, and either pay it off or convert it into stock. 4. Scrip dividends, as well as dividends in money are proper objects of taxation under that clause of the Internal Revenue Act. 5. The certificates possessed every quality of stock, except that they conferred no power to vote and may be redeemed by payment out of the future earnings of the Company. the same shall be payable. It is said that the holder of one or more of 6. By the terms of the Act, a dividend in scrip these certificates has no rights whatever except declared by such a Company as a part of its earn to the dividends mentioned; that for the prinings, etc., is subject to the described tax when- cipal sum mentioned in the certificate, he has ever or wherever or to whatsoever party or person no promise except the optional one specified 7. When an appeal has been granted and all therein and that, upon the whole, the certifi rights under it fully exercised and enjoyed, it is cate effected nothing more than the substitoo late to object that the notice of the assess-tution of two bits of paper for one, inasmuch 8. In an action against the Collector to recover as the stockholder who received it gained nothback the tax as illegally exacted, the annual Re-ing by it which he had not before, under his ports of such Companies were admissible in evi- certificate of stock. dence, to show that the interest certificates were merged in the capital stock, and that dividends were declared and paid on them, the same as on the capital stock. ment was irregular. [No. 528.] Argued Mar. 23, 24, 25, 1875. Decided Apr. 5, 1875. N ERROR to the Circuit Court of the United States for the Northern District of New York. The reduction of a transaction having so solemn an exterior, to a substance so vanishing as this, devolves a great burden of argument, as it seems, upon those who have assumed the task. We submit that, on the contrary, this double option as to dealing with the subject-matter of the certificate, does not exhaust the duty of the Company to its holder; but that, over and beyond such option, it owes to such holder a duty arising out of the nature of the transacfully tion, a duty which is, indeed, not technically a debt or an implied absolute assumpsit, but is Messrs. George H. Williams, Atty. Gen., of like sort with that implied in behalf of and S. F. Phillips, Solicitor Gen., for plain-those who hold stock, viz.: that, at all events, tiff in error. The history and facts of the case are stated by the court. he shall have a pro rata share in the distribution of whatever assets may remain at the dissolution of the Company. Some question seems to have arisen below as to the effect to be allowed to a scheme devised in evasion of a statute, it being suggested that In this connection, we submit that the court upon its face the above certificate was shaped below, in dismissing at the outset any distinein order to evade at once a New York Statute, tion between scrip and stock, and thereupon, which allows the Legislature to intervene in in treating the case of the collector as if it decase the dividends of a corporation exceed ten pended upon whether the transaction were a per cent., and the United States Revenue Stat-dividend of stock, fell into an inadvertency ute upon dividends in scrip. We admit that which is a main cause of the error which we there may be such a thing as successful eva- allege. Nevertheless, reserving for a later part sion. Schemes of evasion must, however, be technically perfect, or fail entirely. No equity arises thereupon to rectify mistakes or supply omissions. The equities are all upon the other side. 1. Putting aside disputed terms, we suppose that it will be admitted that the resolution and of this brief the drawing of the distinction which exists between these things, let us first ascertain the characteristics of a dividend of stock, such ascertainment lying in the way to a definition of the transaction in question. It being admitted upon the other side, and being to all appearances indisputable, that if this transaction had been a dividend of stock, the present action must fail, it seems true that if incidents to this transaction which are objected to as inconsistent with the requisites of the Revenue Act, are equally incidents to a stock dividend based upon earnings, such inconsistency is so far only imaginary. If a stock dividend having incidents like those of this transaction, be within the Act, so also may the transaction itself be. We admit, in passing, that the question before the court turns upon the transaction of Dec. 19, 1868, as it stood upon that day, and that matters happening thereafter in consequence thereof, have no interest except so far. as they reflect light upon what then happened. (a) It is said by the court that the transaction did not vest in its stockholders any greater interest in the earnings or capital of the Company than they had before. The same would have been true in the same sense had it been a dividend of stock based upon earnings. The stockholders who had a beneficial interest in a tenth part of the capital, would, after receiving a dividend of stock, still have no more than a tenth. After receiving a dividend of a tenth part of the stock, he would also still have had no greater interest in the road, rolling stock or other capital of the Company than he had before. This would all have remained the property of the Company, and no part of it have become, because of such dividend, property of the stockholder. Van Allen v. Assessors, 3 Wall.. 584, 18 L. ed. 234. We submit, that the proposition that dividends transferred to stockholders property which previously belonged to the Company, is true only of ordinary dividends, and never of dividends of stock. The subject-matter of a stock dividend is a thing created, not transferred, by the declaration. It is a chose taking the place of an aliquot share in the capital. Frazer v. Seibern, 16 Ohio St., 620. That which a stockholder obtains is not a thing previously held by the Company; but is only a definite and formal partition of some beneficial interest in the capital of the Company, which previously he had held indefinitely, and in common with other stockholders. Of this the certificate is evidence. or lessen with its diminution. We cite in this connection the very learned and well reasoned opinion of that eminent magistrate, Hornblower, in Taylor v. Griswold, 2 Green (N. J.), 222. The above is an objection to the views of the court on this point, entirely distinct from one analogous to that above, as to the proportion of property held by stockholders who have received a dividend of stock, viz.: that supposing it to be proper to take notice of the various charter provisions upon this subject, the proportion of their weight as voters is not disturbed, at least is not increased, by such dividend. (c) It seems also that the test applied by the court, i. e., a deduction or withholding of the tax paid by the Company from all payments to the stockholder on account of any dividend, etc., would have the same bearing upon a stock dividend as upon the transaction under consideration. In any conceivable case of a dividend in scrip, that which is due to the tax gatherer is a thing of a different sort from that which has been divided among the stockholders. There can, therefore, be no deduction in time. Still, a prosperous business by the Company, which is implied in such dividends, and a previous notice to its authorities of the amount of the demands of the government because of the transaction given by the revenue law, make this solution of the question a matter of no difficulty in practice. (d) The only point in which, as occurs to us, it seems questionable whether what is objected to the present transaction as a subject of taxation, is not to be objected as well to a dividend of stock, is that of the rights of the holder of the certificate, as such, to a share in the assets after a dissolution of the Company. Even here it seems not difficult to maintain that the holder of such certificate is entitled, upon such dissolution, in case the assets remain as at the time of its issue, or be increased to the $80 mentioned upon its face. Whether upon the diminution of such assets the certificate holders would be postponed to the stockholders, seems unnecessary to discuss. All that seems material is, to maintain that such certificate holders had at their issue a trust which attached upon the assets and business of the Company, as well for principal as for in(b) Again; dividends of stock do not, per se, terest, just as if they had been holders of stock. as intimated by the court, entitle the holder to "Certificates of stock are simply muniments any additional vote in a company. Whether and evidence of the holder's title to a given they do so in any particular case, depends up-share in the property and franchises of the on the charter. The question now before the corporation of which he is a member." court cannot turn upon matters merely in- The Mechanics' Bank v. N. Y. & N. H. R. cidental to stock, but depends upon the nature Co., 13 N. Y., 627. of stock per se. We take it that this means evidence to affect Angell & Ames define a share of stock to be persons outside of the Corporation, as the Cor"A right to partake according to the amount poration and its stockholders hardly need such of the party's subscription, of the surplus prof-evidence, having in their hands already the its obtained from the use and disposal of the capital stock of the Company to those purposes for which the Company is constituted." 9th ed., sec. 557. So This, as a general definition, would be defective, if it included the non-essential peculiarities of one or other sort of stock. Nothing is said of the supposed right to vote. far as a stockholder is a member of the Company, he has such a right, but this does not, necessarily, increase with an increase of stock, original documents, i e., the Corporation books and papers, from which the certificate is, as it were, only a deduction. Bank v. Burr, 24 Me., 256. The "resolution" before the court, speaks of the stockholders as being entitled to these certificates, as evidence that certain earnings of the road had been invested to a certain amount in that property which ordinarily constitutes railroad capital. We understand that this evidence was intended to be, like that above, evi dence to parties outside; evidence upon which bargains might be made, and trading done. This interpretation of the provision in the resolution is borne out by the insertion of a transfer clause in the certificate. all such dividends or profit, whenever or wherever the same may be payable, and to whatsoever party or person the same may be payable, including non residents, whether citizens or aliens, and said companies are hereby authorized to deduct and withhold from all payments, on account of dividends due and payable as aforesaid, the tax of five per centum; and the payment of the said tax so deducted from the dividends, etc., shall discharge said company from that amount of the dividend." The resolution provided not only for evidence of the expenditure, but for its re-imbursement at some convenient future period. We submit that it is always convenient in law for companies that are being wound up, to apply their assets to the re-imbursement of those from whom they were obtained; it may be convenient Under this statute a dividend in scrip deat other times, it must be so then; i. e., that clared by a railroad company as part of its the above certificates are at all events payable, earnings, is subject to a tax wherever or whenas its stock is, at the dissolution of the Cen-ever and to whomsoever it may be payable. tral Railroad Company, or of such company as That which is required to be due, is the scrip; may be its successor and representative. not money or proceeds of it. Scrip is due at It seems that the word "option," usual in all events, when delivered without any procontracts of this sort, suggests a like conclu- vision postponing its effect. Scrip is not stock, sion. It is said, in effect, on the other side, nor necessarily a certificate of stock. It may that this word reserves to the Company a be a certificate of what may be termed "inchoice of being bound. We think that the choate stock," and it may be a certificate of choice reserved is that of being free, at least that which is substantially in the nature of comparatively-i. e., that, but for an exercise stock and no more. The reports present to of the option, some other obligation as to this our attention many varieties of scrip and will, $80 binds the Company, relief from which was, no doubt, continue to present many new ones at the inception of the contract, contemplated in the future. We submit, that any document by the latter as a thing which, in the progress which confers upon its holder some of the of events, might become desirable and, there- principal fruits of stock, as the latter is defore, was reserved. Our views upon this point fined in the books, is at least scrip. This in full are, that the Company, finding that by proposition seems to be beyond dispute where the application of previous earnings its capi- such document is issued to parties already tal had increased in substance by eighty per stockholders, especially in case it expressly cent., not having that amount in hand in contemplates its own contingent conversion incash, and not being authorized to issue addi- to stock. Inasmuch as this certificate contional shares of stock, pressed also by some ferred upon those to whom it was issued a motive for enlarging the area of the dividend right which is regarded in the books as a test yielding subject, devised this method of ap- of stock (Angell & Ames, above), it seems beportioning amongst its stockholders such addi-yond all reasonable doubt to be scrip. tional capital, distributable in the end as its It is said by the court, that if the tax had other capital; subject, however, to a condition, in favor of the stock, of being paid off before. This condition might effectually preclude certificate holders from questioning the right of the stockholders to the exclusive benefit of any subsequent increase of capital, at the same time that it allowed the value of the certificate to fall as such capital became diminished. been assessed upon the profits of such company, carried to the account of any fund, or used for construction, it might have been enforced for the amount actually carried to the fund, or used for construction since 1862, etc. Admitting, for the sake of argument, the truth of this proposition, we submit with confidence, that where a fund composed of earnAs another view of the obligation of the ings expended, i. e., invested, in construction, Company, arising out of this transaction, we etc., or carried to any account whatever, is submit that, while there exists an option to made the basis of scrip, distributed amongst pay the certificate off out of future earnings, the several stockholders of a company, whatand another option to convert it into stock, ever other term in the revenue law may be apthe Company is bound to do either one or the plicable thereto, the transaction creates also other. This suggestion seems to us more rea- a partition or distribution, i. e., a dividend, a sonable than that made on the other side, al-dividend in scrip. Although we have met with though we rely mainly upon the previous in terpretation submitted to the court. no case which bears much resemblance to the present, we refer to two or three which seem to throw light upon one or the other of the points under discussion. We will now proceed to submit an interpretation of the revenue provision of the United States in question, viz.: that in § 9 of the Act of July 13, 1866, 14 Stat. at L., 138 (bot-ance with numerous cases therein quoted, it is tom.) Laying aside irrelevant matters, this provision is, "That any railroad company that may have declared any dividend in scrip or money due or payable to its stockholders, including non residents, whether citizens or aliens, as part of the earnings, profits, income or gains of such company, and all profits of such company carried to the account of any fund or used for construction, shall be subject to and pay a tax of five per centum on the amount of In Minot v. Paine, 99 Mass., 101, in accordheld that stock dividends, even when based upon the income of a corporation, become at once a part of the capital of the stockholder, not of the income. This indicates that difficulties suggested by a consideration of how a tax specifically imposed upon dividends in scrip affects the income of the stockholder are not important. In Boston & Lowell R. Co. v. Com., 100 Mass., 399, the directors of a company voted, Nov. 26, 1866, a dividend payable in accordance |