Chesapeake & Ohio Canal Co. v. Blair

Alvey, J., delivered the opinion of the Court. There is no question in this case as to the ownership and loss of the bonds. The proof as to those facts is full and complete. There are two questions presented by the record. 1st, Whether the State is a necessary party defendant; and, 2dly, Whether such relief can be granted as was decreed by the Court below. 1.

We think the State was not a necessary party defendant. It is admitted that bonds, such as those described in the appellee’s bill, were issued and sold by the Chesapeake and Ohio Canal Company; and that such bonds were included among those authorized to be issued under the Act of 1844, ch. 281. There is no question therefore as to the liability of the Canal Company on the bonds, if produced, nor is there any question as to the extension or enlargement of the State’s waiver of priority under the Act of 1844. The State’s prior lien was waived only to the extent of the bonds that were issued under the Act of 1844, and the certificates of indebtedness decreed ¹⁰⁹ to be issued by the Canal Company were designed to, and can only, stand in lieu of the lost bonds ; and if the bonds, or any of them," should hereafter be discovered, or be produced by parties entitled to hold them, the corresponding certificates would at once cease to be obligatory.

Such certificates will have no negotiable quality, and if they should be assigned, the assignee would take them subject to all the equities and defences that the Canal Company would have as against the original holder. The State, therefore, has no such immediate and direct interest in the matter as to require it to be made a party. The distinction between a proper and a necessary party may well be taken here, in view of the non-liability of the State to be sued. We only decide that the State is not an indispensable party to the present bill. 2.

As to the second queston, we think that, upon the allegations and proof, the appellee is entitled to the relief that was decreed him by the Court below. The relief invoked is administered by a Court of equity in the exercise of its jurisdiction to relieve against accident. Among the most ordinary instances of relief furnished under this head of equity jurisdiction are those in respect to lost bonds and negotiable securities. It is a jurisdiction, as applied to lost bonds and negotiable securities, long and well established, and it will be exercised and relief granted whenever the loss or destruction of the instrument has happened without the negligence or fault of the party applying, provided such relief can be given without derogating from any positive agreement, or violating any equal or superior equity in other parties.

Sto. Eq. Juris., secs. 81, 85, 86. The foundation of the equity jurisdiction, in respect to lost bonds and negotiable securities, has been the superior powers and facilities possessed by the Courts exercising that jurisdiction over those possessed by the common law Courts, for doing full and complete justice between the parties; the Courts of equity making ¹¹⁰ it a condition of the relief granted that full and secure indemnity should be given the defendant against all risk.

Walmsley vs. Child, 1 Ves., 341; Ex parte Greenway, 6 Ves., 812 ; East India Co. vs. Boddom, 9 Ves., 464; Hansard vs. Robinson, 7 B. & Cr., 90; Byles on Bills, 302. ■ The reason for the exercise of the jurisdiction with respect to lost bonds was somewhat different from that upon which the Court assumed jurisdiction in the case of lost negotiable securities not under seal; hut this case involves the exercise of the jurisdiction as'it-applies both to lost bonds and to lost negotiable instruments. The bonds in question were coupon bonds, in the usual form of such securities, and intended to pass by manual delivery, -and which, if not destroyed, have the qualities of negotiable paper, notwithstanding they were issued under the seal of the corporation. Such bonds are treated as negotiable by the commercial usages and understanding of the country, and their negotiable quality has been fully recognized, not only by many of the State Courts, hut by the Supreme Court of the United States; in repeated decisions; and being negotiable, the rules applicable to negotiable paper apply to them. White vs. Vermont & Massachusetts R. Co., 21 How., 575 ; Mercer County vs. Hackett, 1 Wall., 83 ; Gelpcke vs. City of Dubuque, 1 Wall., 175 , 206 ; Murray vs. Lardner, 2 Wall., 110; Thompson vs. Lee County, 3 Wall., 327 ; Aurora City vs. West, 7 Wall., 82 .

The coupons, when severed from the bonds, are also negotiable and pass by delivery. From the time they are severed they cease to he incidents of the bonds, and become in fact independent claims, negotiable, and upon which separate actions may be maintained, without