U. S. 466, 18 Sup. Ct. 418, 42 L. Ed. 819; Prout v. Starr, 188 U. S. 537, 23 Sup. Ct. 398, 47 L. Ed. 584; Mississippi Railroad Commission v. Illinois Central Railroad Co., 203 U. S. 341, 27 Sup. Ct. 90, 51 L. Ed. 209.

Complainants Entitled to Preliminary Injunction. A preliminary injunction must issue against the defendants in each of the cases enjoining the execution of the statute, forfeiting complainants' rights, in consequence of suing in this court, to do domestic business, and the statutes reducing the passenger rate, and classifying and fixing the maximum rates upon 110 articles, until the final decree, upon complainants giving bond, to be fixed by the court, conditioned to pay, or cause to be paid, all loss or damage caused by the issue of the preliminary injunction, including overcharges or excess rates or charges, to every person, firm, company, or corporation which shall sustain any such loss or damage, or pay any such overcharge, excess rate, or charge.

resort to an action for damages; that he was entitled to maintain a suit in equity to enforce the trust by compelling defendant to transfer the stock to him or to pay the value of such part, if any, as he could not so transfer.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 47, Trusts, 88 153,

559.] 4. SAME-PARTIES.

To such a suit neither the corporation nor the former owner of the stock is a necessary party. In Equity. On demurrer to bill. .

It is alleged in the bill that the defendant, Knapp, then vice president of the Tonapah Home Mining Company, on the 10th day of March, 1903, held, under a pooling agreement, certain stocks issued by said company belonging to Adolf Longabaugh. The terms of the agreement are not disclosed, other than the condition that the stock should be delivered to Longabaugh on August 12, 1904. March 11, 1903, Longabaugh, for a valuable consideration, assigned this stock to the complainant. March 15, 1903, the defendant was duly notified of the assignment. April 1, 1903, the defendant refused to permit this stock to be transferred on the books of the corporation to complainant, unless he was paid $100, which he claimed was due him, the defendant, from Longabaugh. April, 1904, the defendant, Knapp, brought suit against Longabaugh in the justice court of Tonopah township, Nye county, Nev., and caused the stock to be attached, and, although he knew that Longabaugh was in the state, he caused services to be made by publication of summons. Judgment for $239.20 damages, and $29.70 costs, was obtained May 27, 1904. Thereafter the stock was purchased on execution sale by the defendant, Knapp, for the amount of his judgment and costs, the stock certificates were surrendered and canceled, new certificates in lieu thereof were issued, some to Knapp, soine to his wife, some to his son, and some to other persons in privity with him. The stock so issued was issued without consideration other than the judgment, and is all under the control of Knapp. It is alleged in the bill that said claim of indebtedness from Longabaugh was fraudulent, and had no foundation in law or in fact, and was not owing by Longabaugh. The stock was worth at the time of the sale $3,608, and at the time suit was commenced it had increased in value to $8,118. The complainant, Brissell, demanded this stock of Knapp prior to its conversion, but was refused.

McIntosh & Cooke, for complainant.
Key Pittman, F. A. Stevens, and W. B. Pittman, for defendant.

FARRINGTON, District Judge (after stating the facts). The first question raised by the demurrer is as to whether complainant's remedy is barred by laches. The rules controlling the application of the doctrine of laches are among the most characteristic in equity jurisprudence. If unreasonable delay in seeking relief is the only element to be considered, courts of equity will usually follow the statute of limitations, if there be one which is applicable. The statute of limitations is an arbitrary rule.

rule. The doctrine of laches is flexible. Its application depends upon the circumstances of each case. It will not, save in exceptional cass, be applied unless there are conditions other than mere lapse of time which render the maintenance of the suit inequitable and unjust. Laches is not merely a matter of time. It is a question of equity or inequity, of justice or injustice. Kelley v. Boettcher, 85 Fed. 55, 62, 29 C. C. A. 14; Williamson v. Monroe (C. C.) 101 Fed. 322, 330. “Laches,” says the Supreme Court of the United States in Galliher v. Cadwell, 145 U. S. 368, 373, 12 Sup. Ct. 873, 875, 36 L. Ed. 738, “is not, like limitation, a mere matter of time, but principally a question of the inequity of permitting the claim to be enforced-an inequity founded upon some change in the condition or relations of the property or the parties.”

The questions which must be asked and answered in deciding each case are: Has the delay been unreasonable? If so, have the conditions or the relations of the property, or of the parties, so changed that it would be inequitable and unjust to permit the plaintiff to enforce his claim? If, during the long delay, important testimony has been lost or destroyed, and the memory of the original transaction become hazy and indistinct, a court of equity may refuse to grant relief because of its inability to do certain and complete justice. Speidell v. Henrici (C. C.) 15 Fed. 753, 756; Selden's Ex'r v. Kennedy, 52 S. E. 635, 104 Va. 826, 4 L. R. A. (N. S.) 944. If, during the delay, the property in dispute has passed into the hands of innocent purchasers, or the defendant has been lulled into doing something which he would not have done, except he had been led to believe that the claim was abandoned, the rule of laches may be applied. Tazewell's Ex'r v. Saunders, 13 Grat. (Va.) 354, 362. If the defendant has risked large sums of money developing the property, as a result of which it has greatly increased in value, and the plaintiff has suffered this to be done, intending if the venture proved profitable to assert his claim, but, if unprofitable, to allow the defendant to pay all the losses, then in such a case the court will be justified in saying to the plaintiff: You have been guilty of laches, your delay was not without a motive, and that motive was not good. You were silent while the defendant was risking his money and his labor, but now, when there are no chances to take, you are willing to come in and share the profits.” The dominant idea in cases where the doctrine of laches has been applied is that the delay has been productive of changes which render it unjust and unfair to prosecute the suit. If the delay has not prejudiced the defendant, there is no laches. Pacific R. R. V. Atlantic & P. R. Co. (C. C.) 20 Fed. 277; Bartlett v. Ambrose, 78 Fed. 839, 24 C. C. A. 397; Williamson v. Monroe (C. C.) 101 Fed. 322, 329; London & San Francisco Bank v. Dexter Horton & Co., 126 Fed. 593, 601, 61 C. C. A. 515; Galliher v. Cadwell, 145 U. S. 368, 373, 12 Sup. Ct. 873, 36 L. Ed. 738; Cahill v. Superior Court, 78 Pac. 467, 469, 145 Cal. 42; Cook v. Ceas, 82 Pac. 370, 147 Cal. 614; Hawley v. Von Lanken (Neb.) 106 N. W. 456; Daggers v. Van Dyck, 37 N. J. Eq. 130; Rozell v. Chicago Mill & Lumber Co., 89 S. W. 469, 76 Ark. 525; Demuth v. Bank, 37 Atl. 266, 85 Md. 326, 60 Am. St. Rep. 322. In Daggers v. Van Dyck, 37 N. J. Eq. 137, the rule is thus stated:

"It is only when the complainant has slept over his wrongs so long that, if relief be given to him, great and serious wrong will be done to the defendant, that laches constitute a complete defense. Here the parties are in almost exactly the same position now that they were at the time the wrong for which redress is sought was done, and relief may be given to the complainant without doing any harm whatever to the defendant."

In Hawley v. Von Lanken (Neb.) 106 N. W. 458, the court says:

“Where it is sought to apply the doctrine of laches independent of the statute of limitations, the true inquiry should be whether the adverse party has been prejudiced by the delay in bringing the action, and whether a reasonable excuse is offered for the delay, because, if the delay has resulted in no injustice to the adversary, or if it can be excused upon reasonable grounds, then equity will not refuse relief.”

In Pacific R. R. v. Atlantic & P. R. Co. (C. C.) 20 Fed. 277, it was held that where the defendant had suffered no prejudice by delay in bringing the suit, and the demand was not barred by the statute of limitations, a demurrer would not lie for laches. In this case at this time laches can only be predicated on the facts stated in the complainant's bill. Under the pooling agreement, as recited in the record, neither complainant nor his grantor was entitled to a delivery of the stock in question until August 12, 1904. This suit was commenced June 7, 1906. While the stock does not all stand in the name of the defendant, it is alleged that a portion of it does, and the remainder was reissued, without consideration, to Mr. Knapp's wife and son, and to other persons in privity with Mr. Knapp. It does not appear that the nature and character of the transaction are obscured, or that any evidence which would have been available to defendant immediately after the alleged conversion of the stock has been lost. So far as the pleadings show, there has been no change in the condition or relations of the parties, or of the property, during the interval of delay, except that the stock has increased in value from $3,608 to $8,118. The doctrine of laches has been applied more rigorously in mining cases than in any other, because such property is liable to great and sudden fluctuations in value; but, even in such cases, courts of equity never lose sight of the rule which requires them to follow the statute of limitations, unless some extraordinary circumstances or conditions are presented which render it inequitable to permit the suit to be prosecuted. There is nothing in the nature of mining property which changes the essential character of the equitable doctrine of laches. In mining suits where laches has been held a sufficient bar, with very few exceptions, it will be found that the controlling fact was not lapse of time, or increase in the value of the property, or its liability to great and sudden fluctuations in value, but the fact that it would be unfair and unjust to permit the complainant to push his claim.

Twin-Lick Oil Co. v. Marbury, 91 U. S. 587, 23 L. Ed. 328, Johnston v. Standard Mg. Co., 148 U. S. 360, 13 Sup. Ct. 585, 37 L. Ed. 480, and Curtis v. Lakin, 94 Fed. 251, 36 C. Č. A. 222, are leading cases on this subject, and in each of them the delay was prompted by speculative reasons; in other words, the plaintiff was waiting to see whether the developments undertaken by the defendant would be successful before he decided whether to assert his claim. In each of these cases the developments and discoveries which made the property valuable were at the risk and expense of the defendant. It is true the bill shows the stock has more than doubled in value, but there is nothing in the record which even suggests that this increment of value was created or earned by the defendant. It does not appear that complainant was waiting the result of any expenditure of money or labor by defendant, or that defendant during the delay devoted any money or labor whatever to the property. The pleadings show simply a fraudulent acquisition of mining stock, an increase in the value of the stock, delay short of the period fixed by the statute of limitations and that the stock still remains in the name of or under the control of defendant. It does not appear that the delay has injured defendant. The mere fact that mining property or mining stock, obtained by fraud, has since become immensely valuable, is not sufficient to justify an application of the doctrine of laches. The profitableness of a fraudulent transaction can never be its justification, and it can never shorten the arm of this court. The circumstances disclosed by the pleadings are not sufficient to constitute laches.

The defendant also contends that the complainant has an adequate remedy at law, and that he has not stated facts sufficient to entitle him to equitable relief. These objections will be considered together. The allegation of the bill is that the certificate of the Tonopah Home Mining Company's stock was duly issued and subsequently placed in the hands of defendant, as vice president of said company, to be held in trust under a pooling agreement for the use and benefit of Longabaugli. The defendant appears to have been charged with no other duty under the agreement than the mere custody of this stock until August 12, 1904, when it was to be delivered to Longabaugh or his assigns. It is alleged that Knapp had full control of the stock, and that it was held in trust; but otherwise it does not appear that he had any other title or interest than the possession of the certificate, or that he had any power to dispose of it. The stock was issued in the name of Longabaugh, and stood on the books of the company in Longabaugh's name. Knapp had neither the legal nor the equitable title. Both titles were vested in Longabaugh. There is nothing in the pleadings indicating a relation of confidence on one side and discretion on the other. Knapp was therefore a bailee, rather than a trustee. Brown v. Spohr

Brown v. Spohr (Sup.) 84 N. Y. S. 998; Young v. Mercantile Trust Co. (C. C.) 140 Fed. 61.

It is alleged that on March 11, 1903, this stock was duly sold, transferred, and assigned by Longabaugh to complainant for a valuable consideration, by written indorsement to that effect on the pool certificate, and also by a separate instrument of conveyance. The original certificate of stock remained in the pool in the name of Longabaugh. Four days after the assignment defendant was duly notified of the transaction. The stock was never transferred on the books of the company from Longabaugh to Brissell. Such a transfer defendant, being then the vice president of the company, as well as the custodian of the stock, refused to permit. It appears from the pleadings that the stock never stood in the name of complainant. He had given a valuable consideration, and received an instrument of conveyance, but there was no indorsement or delivery of the stock certificate, or transfer on the books of the company. The Tonopah Home Mining Company is an Arizona corporation, and, under the laws of that territory, no transfer of stock is valid except as between the parties thereto, until the same is regularly entered upon the books of the company.

Rev. St. Ariz. 1901, § 773. By this assignment from Longabaugh complainant did not acquire the legal title to the stock, the legal title remained in Longabaugh, and he held it in trust for