14 L. ed. 753, 755; Mattingly v. North- | L. ed. 393, 395, 4 Sup. Ct. Rep. 337; western Virginia R. Co. 158 U. S. 53, Stearns v. Page, 7 How. 819, 828, 12 57, 39 L. ed. 894, 895, 15 Sup. Ct. Rep. L. ed. 928, 932; Wagner v. Baird, 7 725; Parker v. Ormsby, 141 U. S. 81, How. 234, 258, 12 L. ed. 681, 691; Burke 83, 35 L. ed. 654, 655, 11 Sup. Ct. Rep. v. Smith (Putman v. New Albany & S. 912; Metcalf v. Watertown, 128 U. S. C. Junction R. Co.) 16 Wall. 390, 401, 586, 32 L. ed. 543, 9 Sup. Ct. Rep. 173; 21 L. ed. 361, 365; Meath v. Phillips Continental L. Ins. Co. v. Rhodes, 119 County, 108 U. S. 553, 27 L. ed. 819, 2 U. S. 237, 30 L. ed. 380, 7 Sup. Ct. Rep. Sup. Ct. Rep. 869; Wood v. Carpenter, 193; Southern P. R. Co. v. United States, 101 U. S. 135, 138, 25 L. ed. 807, 808; 200 U. S. 341, 349, 50 L. ed. 507, 510, 26 Teall v. Schroder, 158 U. S. 172, 178, Sup. Ct. Rep. 296; Koenigsberger v. 39 L. ed. 938, 940, 15 Sup. Ct. Rep. 768; Richmond Silver Min. Co. 158 U. S. 41, Baker v. Cummings, 169 U. S. 189, 206, 46, 39 L. ed. 889, 890, 15 Sup. Ct. Rep. 209, 42 L. ed. 711, 718, 719, 18 Sup. Ct. 751; McGowan v. Elroy, 28 App. D. C. Rep. 367; Lewis v. Denison, 2 App. D. C. 387; P. H. Sheehy Co. v. Eastern Importing & Mfg. Co. 44 App. D. C. 111, L.R.A.1916F, 810.

196.

If the trial court intended to hold the jurisdiction concurrent, limitations should have been applied.

Boone v. Chiles, 10 Pet. 177, 223, 9 L. ed. 388, 404; Beaubien v. Beaubien, 23 How. 190, 207, 16 L. ed. 484, 488; Speidel v. Henrici, 120 U. S. 377, 386, 30 L. ed. 718, 719, 7 Sup. Ct. Rep. 610; Norris v. Haggin, 136 U. S. 386, 390, 392, 34 L. ed. 424, 426, 427, 10 Sup. Ct. Rep. 942; Boone County v. Burlington & M. River R. Co. 139 U. S. 684, 692, 35 L. ed. 319, 322, 11 Sup. Ct. Rep. 687; Alsop v. Riker, 155 U. S. 448, 460, 39 L. ed. 218, 222, 15 Sup. Ct. Rep. 162; Percy v. Cockrill, 4 C. C. A. 73, 10 U. S. App. 574, 53 Fed. 872; Scheftel v. Hays, 7 C. C. A. 308, 19 U. S. App. 220, 58 Fed. 457; Merrill v. Monticello, 66 Fed. 165; Miles v. Vivian, 25 C. C. A. 208, 51 U. S. App. 194, 79 Fed. 848; Nash v. Ingalls, 41 C. C. A. 545, 101 Fed. 645; Hall v. Russell, 3 Sawy. 506, Fed. Cas. No. 5,943; Hecht v. Slaney, 72 Cal. 363, 14 Pac. 88; McGaughey v. Brown, 46| Ark. 25; Pipe v. Smith, 5 Colo. 146; Wilmerding v. Russ, 33 Conn. 77; Maxwell v. Walsh, 117 Ga. 467, 43 S. E. 704; McClane v. Shepherd, 21 N. J. Eq. 76; Farnam v. Brooks, 9 Pick. 243; German American Seminary v. Kiefer, 43 Mich. 105, 4 N. W. 636; Weaver v. Leiman, 52 Md. 708; Marcotte v. Hartman, 46 Minn. 202, 48 N. W. 767; Yeoman v. Townsend, 74 Hun, 625, 26 N. Y. Supp. 606; Roberts v. Ely, 113 N. Y. 128, 20 N. E. 606; Lammer v. Stoddard, 103 N. Y. 672, 9 N. E. 328; Talmage v. Russell, 74 App. Div. 7, 76 N. Y. Supp. 854; Davis v. Hawkins, 163 Pa. 228, 29 Atl. 746; Ashhurst's Appeal, 60 Pa. 316; Watt's Appeal, 78 Pa. 370, 8 Mor. Min. Rep. 222; Newman v. Newman, 7 L.R.A. | (N.S.) 370, and note, 60 W. Va. 371, 55 S. E. 377; Merton v. O'Brien, 117 Wis. 437, 94 N. W. 340; Carrol v. Green, 92 U. S. 509, 23 L. ed. 739; Ware v. Galveston City Co. 111 U. S. 170, 175, 28

If the trial court intended to hold the jurisdiction purely equitable, laches should have been applied.

Elmendorf v. Taylor, 10 Wheat. 152, 164, 6 L. ed. 289, 294; Bowman v. Wathen, 1 How. 189, 193, 11 L. ed. 97, 99; McKnight v. Taylor, 1 How. 161, 168, 11 L. ed. 86, 88; Creath v. Sims, 5 How. 192, 204, 12 L. ed. 111, 117; Twin Lick Oil Co. v. Marbury, 91 U. S. 587, 23 L. ed. 328, 3 Mor. Min. Rep. 688; Brown v. Buena Vista County, 95 U. S. 157, 161, 24 L. ed. 422, 423; Hayward v. Eliot Nat. Bank, 96 U. S. 611, 618, 24 L. ed. 855, 858; Hammond v. Hopkins, 143 U. S. 224, 250, 36 L. ed. 134, 145, 12 Sup. Ct. Rep. 418; Fowler v. Fowler, 38 App. D. C. 476; Upton v. Tribilcock, 91 U. S. 45, 54, 23 L. ed. 203, 207; Godden v. Kimmell, 99 U. S. 201, 210, 25 L. ed. 431; Jones v. Perkins, 76 Fed. 82; Wagner v. Baird, 7 How. 234, 258, 12 L. ed. 681, 691; Sullivan v. Portland & K. R. Co. 94 U. S. 806, 24 L. ed. 324; Simmons Creek Coal Co. v. Doran, 142 U. S. 417, 437, 35 L. ed. 1063, 1072, 12 Sup. Ct. Rep. 239; Abraham v. Ordway, 158 U. S. 416, 422, 39 L. ed. 1036, 1039, 15 Sup. Ct. Rep. 894; Taylor v. Holmes, 14 Fed. 498; Willard v. Wood, 164 U. S. 502, 525, 41 L. ed. 531, 540, 17 Sup. Ct. Rep. 176; McQuiddy v. Ware, 20 Wall. 14, 22 L. ed. 311; Marsh v. Whitmore, 21 Wall. 178, 185, 22 L. ed. 482, 485; Broderick's Will (Kieley v. McGlynn) 21 Wall. 503, 518, 22 L. ed. 599, 605; Halstead v. Grinnan, 152 U. S. 412, 417, 38 L. ed. 495, 497, 14 Sup. Ct. Rep. 641; Hoyt v. Latham, 143 U. S. 553, 565, 569, 36 L. ed. 259, 264, 265, 12 Sup. Ct. Rep. 568; Pearsall v. Smith, 149 U. S. 231, 234, 37 L. ed. 713, 716, 13 Sup. Ct. Rep. 833; Credit Co. v. Arkansas C. R. Co. 5 McCrary, 5, 15 Fed. 46; Teall v. Slaven, 40 Fed. 774; Naddo v. Bardon, 47 Fed. 782; Jesup v. Illinois

Mr. Justice Brandeis delivered the opinion of the court:

Smith and Wilson were sued in the supreme court of the District of Columbia by the receiver of the First Co-operative Building Association of Georgetown, District of Columbia, for the amount of profits made by them and a former re

C. R. Co. 43 Fed. 483; Dugan v. O'Don-, L. ed. 836, 838; Harwood v. Cincinnati nell, 68 Fed. 983; United States Trust & C. Air Line R. Co. 17 Wall. 78, 21 Co. v. David, 36 App. D. C. 549; Burke L. ed. 558; Wollensak v. Reiher, 115 U. v. Smith (Putman v. New Albany & S. S. 96, 102, 29 L. ed. 350, 352, 5 Sup. Ct. C. Junction R. Co. 16 Wall. 390, 401, 21 Rep. 1137; Ware v. Galveston City Co. L. ed. 361, 365; Johnston v. Standard 146 U. S. 102, 115, 36 L. ed. 904, 909, Min. Co. 148 U. S. 360, 370, 37 L. ed. 13 Sup. Ct. Rep. 33; Hardt v. Heidwey480, 485, 13 Sup. Ct. Rep. 585, 17 Mor. er, 152 U. S. 547, 558, 38 L. ed. 548, Min. Rep. 554; Taylor v. South & North 552, 14 Sup. Ct. Rep. 671; Taylor v. Ala. R. Co. 13 Fed. 152, 4 Woods, 575; Holmes, 14 Fed. 498; Jones v. Perkins, Rugan v. Sabin, 3 C. C. A. 578, 10 76 Fed. 82; Thompson v. German Ins. U. S. App. 519, 53 Fed. 415; Lewis v. Co. 77 Fed. 258; Hubbard v. Manhattan Denison, 2 App. D. C. 387; De Mares Trust Co. 30 C. C. A. 520, 57 U. S. App. v. Gilpin, 15 Colo. 84, 24 Pac. 568; 730, 87 Fed. 51; Fowler v. Fowler, 38 Hendrickson v. Hendrickson, 42 N. J. App. D. C. 476; Quirk v. Liebert, 12 Eq. 657, 9 Atl. 742; Harwood v. Cin- App. D. C. 394; Lant v. Manley, 71 Fed. cinnati & C. Air Line R. Co. 17 Wall. 7; Wetzel v. Minnesota R. Transfer Co. 78, 21 L. ed. 558; Boone County v. Bur- 12 C. C. A. 490, 27 U. S. App. 594, 65 lington & M. River R. Co. 139 Ü. S. 684, Fed. 23. 693, 35 L. ed. 319, 322, 11 Sup. Ct. Rep. 687; Foster v. Mansfield, C. & L. M. R. Co. 146 U. S. 88, 100, 36 L. ed. 899, 903, 13 Sup. Ct. Rep. 28; Evers v. Watson, 156 U. S. 527, 535, 39 L. ed. 520, 523, 15 Sup. Ct. Rep. 430; Teall v. Schroder, 158 U. S. 172, 178, 39 L. ed. 938, 940, 15 Sup. Ct. Rep. 768; Rhino v. Emery, 65 Fed. 826; Lant v. Manley, 71 Fed. 7; Levis v. Kengla, 8 App. D. C. 230; Bar-ceiver of the Association in the purchase ton v. Long, 45 N. J. Eq. 841, 14 Atl. at a foreclosure sale and subsequent re565, 566, 568, 19 Atl. 623; Johnson v. sale of land mortgaged to secure a note Atlantic, G. & W. I. Transit Co. 156 U. owned by the Association. The supreme S. 618, 647, 39 L. ed. 556, 566, 15 Sup. court held them liable for the full amount Ct. Rep. 520; Felix v. Patrick, 145 U. S. of the profits, $743.68, with interest and 317, 329, 36 L. ed. 719, 725, 12 Sup. Ct. costs. The court of appeals of the DisRep. 862; Leavenworth County v. Chi-trict reversed the decree and ordered that cago, R. I. & P. R. Co. 18 Fed. 209; Norris v. Haggin, 28 Fed. 275; Percy v. Cockrill, 4 C. C. A. 73, 10 U. S. App. 574, 53 Fed. 872; Swift v. Smith, 25 C. C. A. 154, 49 U. S. App. 181, 79 Fed. 709; De Walt v. Doran, 21 D. C. 175; Naddo v. Bardon, 2 C. C. A. 335, 4 U. S. App. 642, 51 Fed. 493; Richards v. Mackall, 124 U. S. 183, 188, 31 L. ed. 396, 399, 8 Sup. Ct. Rep. 437; Larkin v. Sierra Buttes Gold Min. Co. 25 Fed. 337; Coon v. Seymour, 71 Wis. 346, 37 N. W. 243; Penn Mut. L. Ins. Co. v. Austin, 168 U. S. 685, 696, 42 L. ed. 626, 631, 18 Sup. Ct. Rep. 223; James v. James, 55 Ala. 533.

When fraud is alleged, and delay in the assertion of the rights infringed is apparent on the face of the bill, plaintiff must plead strictly, setting forth the impediments to earlier prosecution, in order to excuse delay and escape the enforcement by the court of the bar of laches, and the dismissal of the bill.

Stearns v. Page, 7 How. 819, 828, 12 L. ed. 928, 932; Beaubien v. Beaubien, 23 How. 190, 208, 16 L. ed. 484, 488; Badger v. Badger, 2 Wall. 87, 95, 17

the bill be dismissed with costs. 48 App. D. C. 565. A writ of certiorari was granted by this court. 250 U. S. 655, 63 L. ed. 1192, 40 Sup. Ct. Rep. 10. The question before [587] us is whether the respondents are liable upon the following facts, and, if so, in what amount:

In 1908 the supreme court of the District appointed William E. Ambrose, a member of its bar, receiver of the First Co-operative Building Association of Georgetown, District of Columbia. Among the assets of the Association so intrusted to the receiver was a note of Schwab for $2,700, secured by a mortgage deed of trust of land. The note being in default, Ambrose, as receiver, requested the trustee under the deed of trust to advertise the land for sale at public auction. auction sale was held, and a bid of $350 was made by Edwin L. Wilson, a member of the bar; but the trustee withdrew the property from sale because the bid was inadequate. Thereafter it was arranged between Wilson, Ambrose, and another lawyer, John Lewis Smith, who was counsel of the receiver, that the trustee should again advertise the property for sale;

The

that Wilson should, at the second sale,, 741. To this end it was his duty to enuse his own judgment whether to bid, deavor to have the land, when sold under and, if so, what amount; and that, if he the trust deed, bring the largest possible should happen to become the purchaser, price. J. H. Lane & Co. v. Maple Cotton the three should be jointly liable for the Mill, 146 C. C. A. 415, 232 Fed. 421. purchase price and any expenses incident When he agreed with Smith and Wilson to the purchase, and should be jointly to join in the purchase if Wilson should interested in the property purchased. The become the successful bidder, he placed second sale was duly advertised. Smith himself in a position in which his personal and Ambrose were present, but gave no interests were, or might be, antagonistic instructions or directions in regard to the to those of his trust. Michoud v. Girod, sale, either to the trustee or to his auc- 4 How. 503, 552, 11 L. ed. 1076, 1098. tioneer. Wilson also attended, and, in It became to his personal interest that the the exercise of his own judgment, and purchase should be made by Wilson for without previous conference with either the lowest possible price. The course Smith or Ambrose, bid $491, and became taken was one which a fiduciary could not the purchaser of the property. There legally pursue. Magruder v. Drury, 235 was no evidence of any improper in- [589] U. S. 106, 119, 120, 59 L. ed. fluence at the sale to prevent competition, 151, 156, 35 Sup. Ct. Rep. 77. Since or to close competitive bidding, or to bring he did pursue it and profits resulted, about the sale to Wilson in preference to the law made him accountable to the anyone else. On the contrary, it affirm- trust estate for all the profits obtained atively appears that the sale was fairly by him and those who were associated conducted; that there was competitive with him in the matter, although the bidding; and that the property was finally estate may not have been injured thereknocked down to the highest bidder. by Magruder v. Drury, 235 U. S. 106, 59 L. ed. 151, 35 Sup. Ct. Rep. 77. And others who knowingly join a fiduciary in such an enterprise likewise become jointly and severally liable with him for such profits. Emery v. Parrott, 107 Mass. 95, 103; Zinc Carbonate Co. v. First Nat. Bank, 103 Wis. 125, 134, 74 Am. St. Rep. 845, 79 N. W. 229; Lomita Land & Water Co. v. Robinson, 154 Cal. 36, 18 L.R.A. (N.S.) 1106, 97 Pac. 10. Wilson and Smith are therefore jointly and severally liable for all profits resulting from the purchase; the former, although he had no other relation to the estate; the latter, without regard to the fact that he was also counsel for the receiver.

Within a few days after the second sale Wilson and [588] Smith found, through the aid of real estate agents, a purchaser named Kite, who was willing to pay $1,400 for the land. In order to convey a good title it was necessary to clear the land of tax liens and an outstanding tax title. This required $550,-that is, $59 more than Wilson had bid. He voluntarily raised his bid by that amount. The land was conveyed by the trustee to Wilson, and by Wilson to Kite, the deeds being recorded simultaneously when Kite paid the $1,400. Of this amount $652.32 was used to discharge taxes, tax liens, and expenses of sale. The balance, $743.68, was divided equally between Wilson, Smith, and Ambrose individually. Wil- It is said that, at a sale made under a son had paid out, in making the purchase, mortgage deed of trust, the duty to obtain no money of his own or theirs. The the highest possible price rests not upon estate of which Ambrose was receiver got the note holder, but upon the trustee nothing, as the amount required to dis- under the deed of trust, and that the charge the tax liens exceeded the amount creditor may bid at the sale or refrain bid by Wilson. Much later the facts from so doing, as he may see fit. Richard were brought to the attention of the su- v. Holmes, 18 How. 143, 148, 15 L. ed. preme court of the District. Ambrose 304, 306; Smith v. Black, 115 U. S. 308, resigned as receiver; Jackson was ap- 315, 29 L. ed. 398, 401, 6 Sup. Ct. Rep. pointed in his stead; and as receiver 50. This is true so far as it concerns brought this suit against Wilson and Smith to recover the profits which had been made by them and Ambrose. Ambrose had, as receiver, the affirmative duty to endeavor to realize the largest possible amount from the Schwab note. Baker v. Schofield, 243 U. S. 114, 61 L. ed. 626, 37 Sup. Ct. Rep. 333; Robertson v. Chapman, 152 U. S. 673, 681, 38 L. ed. 592, 595, 14 Sup. Ct. Rep.

the duty of the note holder to the debtor or other owner of the mortgaged property. But the many cases cited to this effect in Smith's and Wilson's behalf do not bear upon the question before us. Smith and Wilson are held liable for knowingly confederating with one who, as receiver of the estate of the note holder, owed a duty to it, and who put himself

porations is of such a fiduciary nature that, the relief sought by minority stocktransactions between boards of directors holders against a sale of the entire corhaving common members are regarded as

See same case below, 157 C. C. A. 417, 245 Fed. 225.

jealously by the law as are personal deal-porate property, authorized by the ings between a director and his corporation, owners of the majority of the capital and where the fairness of such transactions stock. Reversed and remanded for furis challenged the burden is upon those who ther proceedings. would maintain them to show their entire fairness, and where a sale is involved, the full adequacy of the consideration, and this is especially true where a common director is dominating in influence or in character. [For other cases, see Corporations, V. d; Evidence, II. f, in Digest Sup. Ct. 1908.] Appeal

findings.

review of facts -concurrent

7. In suits in equity a concurrent finding by the two lower courts on a question of fact will be accepted by the Federal Supreme Court unless it be clear that their

conclusion is erroneous.

sale of property -conconsideration failure

[For other cases, see Appeal and Error, 4931-
4959, in Digest Sup. Ct. 1908.]
Corporations
firmation
to obtain higher bid at public sale.
8. The highest cash offer for the prop-
erty of a corporation at a public sale is
not such a measure of its value that the
failure to obtain a bid at such sale for
more than the consideration fixed in a
private sale of such property, authorized
by the owners of a majority of the capital
stock, should be accepted by the courts as
a sufficient reason for confirming such sale
when attacked by the minority stockholders,
where the courts found such consideration
on other evidence to be inadequate.
[For other cases, see Corporations, VI. f, in
Digest Sup. Ct. 1908.]
Judgment

conformity to pleadings.

9. A court of equity must set aside,

at the instance of minority stockholders, a sale of all the corporate property, authorized by the owners of a majority of the stock, if the consideration for the sale is found to be inadequate, and may not confirm such sale upon condition that no higher price be obtained at public sale, where, under the pleadings, the court had power to confirm the sale if it was found to have been lawfully made, but only upon the terms on which the parties had contracted to make it, and neither the offer to purchase nor the acceptance contemplated any public offer of the property, or a sale at a higher price if offered.

[For other cases, see Judgment, II. f, in Digest

Sup. Ct. 1908.]

[No. 25.]

Argued April 25 and 28, 1919. Restored to
docket for reargument December 8, 1919.
Reargued March 3 and 4, 1920. Decided
January 24, 1921.

The facts are stated in the opinion.

Mr. Thomas J. Walsh argued the cause and filed a brief for appellants: Appellants admit that it is within the power of the directors and a majority of the stockholders of an insolvent corporation, or a corporation in danger of insolvency, to convert all of its property into cash, with a view to the division of the remainder among the stockholders, and the dissolution of the company.

Treadwell v. Salisbury Mfg. Co. 7 Gray, 393, 66 Am. Dec. 490.

But, in this connection, a distinction must be drawn between a losing corporation and one that is insolvent or threatened with insolvency. The bare fact that, in the way the business of the company has been conducted, it does not produce a profit, does not justify the majority of the stockholders in abandoning the purpose for which the corporation was organized and winding it up.

Noyes, Intercorporate Relations, § 112; Butler v. New Keystone Copper Co. Salisbury Mfg. Co. 7 Gray, 393, 66 Am. Del. 93 Atl. 380; Treadwell v. Dec. 490.

If the affairs of a corporation get into such a condition that a sale of all of its property is justified, that sale must be made for a pecuniary consideration, as a step towards the liquidation of the company.

Noyes, Intercorporate Relations, 118; Tanner v. Lindell R. Co. 103 Am. St. Rep. 548, note.

Even a general power to buy, sell, or exchange property would not authorize an exchange of all the property of a corporation for the stock of another.

Forrester v. Boston & M. Consol. Copper & S. Min. Co. 21 Mont. 563, 55 Pac. 229, 353; Kean v. Johnson, 9 N. J. Eq. 401.

There was neither a sale nor an exchange in any just or legal sense. Forrester v. Boston & M. Consol. Cop

APPEAL from the United States Cir- per & S. Min. Co. 21 Mont. 563, 55 Pac.

229, 353; Morris v. Elyton Land Co. 125 Ala. 263, 28 So. 513.

cuit Court of Appeals for the Ninth Circuit to review a decree which affirmed a decree of the District Court for the Even if the right to sell all of its District of Montana, granting a part of property under the circumstances ap