This is the important question in this appeal. If the Sackett action was in truth a representative action, fairly brought, and honestly and regularly conducted, for the benefit of all the bondholders, the judgment therein is conclusive against these plaintiffs. Kerr v. Blodgett, 48 N. Y., 62. Representative actions are a recognized method of equity procedure and the rule is thus codified: "Where the question is one of a common or general interest of many persons; or where the persons who might be made parties are very numerous, and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of all." Code Civil Pro., § 448.

Of course if Sackett did fairly, honestly and regularly bring and conduct his action for the benefit of these plantiffs, then he brought them and their interest in the subject-matter as fully before the court as if they themselves had brought precisely the same action; what he did in it, they did; these plaintiffs in such case, therefore, put all their interests mentioned in the complaint in the hands of the court and asked the court to take jurisdiction of them and dispose of them. This the court did, and no matter what irregularities in procedure or defects in parties there may have been, these irregularities and defects are chargeable to these plaintiffs, and in the absence of unfairness they are estopped to escape from the consequences of their own conduct, or if they wish any relief they must seek it in the action of Sackett v. Root itself, and not in a collateral action. It follows, therefore, that if the plaintiffs, through their representative, Sackett, did not choose to bring Hull and Lincoln, or Park and Duncan, or their own trustee, the Union Trust Company, or the trustees of the New York, Boston & Montreal Railway Company's mortgage into court in order to cut off whatever lien or title any of these might have or claim, the law imputes the omission to the plaintiffs, and refuses to relieve them, at the expense of third parties, from the consequences of their

own acts.

Plainly they could, if they would, cut off their own interests in the railroad, whether legal or equitable, whether they cut off that of any one else or not; and they were not obliged to cut off the interest of any third party in order to cut off their own. If the Sackett suit was a true representative suit, fairly brought and conducted for the benefit of all the Lebanon Springs bondholders, the judgment in it bars the plaintiffs from maintaining this action, except possibly with respect to that part of the railroad situate in the state of Vermont. If these plaintiffs wrecked their own interests, they must abide the consequences.

But if it was not fairly conducted for the benefit of all the Lebanon Springs bondholders; if the plaintiff Sackett and his associate in its management, Tilden, used the suit to acquire an advantage for themselves and others at the expense of the interest of those whom they assumed to protect, the latter are not bound by it. Kerr v. Blodgett, supra; Campbell v. R. R. Co., 1 Woods, 368. An appeal in the Sackett action would only bring up for review errors of law or fact committed by the court. N. Y. STATE REP., VOL. XXXIII

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A bill of review impeaching the action and judgment for fraud brings up the fraudulent practices of the plaintiff or suffered by him in the action, whereby he wronged those he assumed to protect. Such is this action. It is a direct attack, not upon any alleged error of the court, but upon the fraud of the plaintiff. Hackley v. Draper, 60 N. Y., 88, 92; Dobson v. Pearce, 12 id., 156; State of Michigan v. Phoenix Bank, 33 id., 9, 27.

The importance of the finding that the Sackett action was a representative one, has induced us to examine with care all the evidence bearing upon the question. The conviction is forced upon our minds that the finding cannot be sustained, and that the finding requested by the plaintiffs, namely: "That said suit of Sackett v. Root, was neither brought nor conducted for the purpose of realizing the property to the owners of the Lebanon Springs bonds," ought to have been made.

Assuming that Sackett and Tilden, his associate, in bringing and conducting the action, contemplated the natural and probable consequences of their management of the action of Sackett v. Root, they cannot be acquitted of deliberate spoliation of the Lebanon Springs bondholders.

What has already been said suggests the delicate and highly responsible trust which a representative plaintiff assumes in bringing such an action as Sackett brought. He impliedly guarantees that he will not allow his private interest to conflict with his discharge of duty. Here we find Sackett and Tilden obtaining from the fund, which it was their duty to protect for the bondholders, $27,784.21 upon their private claims, which, if valid, were behind the bonds. No suggestion of these claims was made in the complaint.

Presumably the other bondholders, if they had not been kept out of court by the plaintiff's intrusion as their self elected representative, would have opposed their priority. If aside from the bondholders there had been made parties defendant those who as we shall hereafter show, were entitled to claim an interest in the action, they presumably would have opposed such priority. There were no parties to the action interested to oppose these claims. Sackett and Tilden represented both sides of their own case. Not content to leave out of the action those who would naturally oppose these claims, they successfully opposed and kept out such of them as tried to come in. Under a pretense of protecting the common and general interests of the bondholders, Sackett and Tilden sacrificed them to their own interests. This was a fraud, and, of itself, is sufficient to establish the non-representative character of the action and its misrepresentative character. Sackett's omission to make the Union Trust Company, Park and Duncan, and the trustees of the New York, Boston & Montreal Railroad Company parties to the action is significant. When a party brings an action for himself he can select his own defendants, but when he volunteers to sue as the representative of others, he should sue those who ought to be sued.

If the railroad was to be sold, the common interest of the bondholders required that all outstanding liens and clouds upon the

title behind the bonds should be cut off to the end that there should be no diminution of price upon account thereof.

Now the Union Trust Company was the plaintiff in the original judgments and of course their legal owner. As there had been no satisfaction of those judgments, the Union Trust Company was the party entitled to seek satisfaction.

The bonds held by the bondholders were merged in the judg ments. See cases cited in O'Brien v. Young, 95 N. Y., 436; Matter of European Central Railway Co., L. R., 4 Ch. D., 33; S. C., 19 Moak's Eng., 642, and cases cited in note thereto. The bonds were of no further value than as evidence of their holder's equity in the judgments, or in whatever the trustee could obtain towards their satisfaction. Whether the Union Trust Company was to be deprived of its legal title to the judg ments, or of its right to pursue all available remedies, or was to be used as an instrument through which the bondholders could work out their equities, its presence as a party was necessary. Hallett v. Hallett, 2 Pai., 17-22; Western R. R. Co. v. Nolan, 48 N. Y., 513; Greaves v. Gouge, 69 id., 154.

The Union Trust Company was also the trustee of the Harlem Extension railroad bondholders, and the owner of the foreclosure judgment whereby their rights were made second only to those of the Lebanon Springs bondholders. Certainly these bondholders were interested in the fund to be realized by the sale of the railroad; they were entitled to oppose Sackett and Tilden's priority upon their unsecured claims, to oppose the other charges whereby the entire fund was consumed, and therefore were entitled to be represented in the Sackett action by their trustee. As the trustee represents the bondholders, its presence as a party is in legal effect their presence, and if the trustee is a party, the bondholders are not necessary parties, except in case of the trustee's neglect or refusal to become a party or act properly as such, in which case one or more bondholders, acting as the representatives of all, may bring the action and make the trustee a party and compel its proper action as such. Cases supra.

It would seem to follow that the action by one cestui que trust as the representative of all is not proper where the trustee is alive and not brought into court. He who seeks to procure the representation of all the bondholders should perform the condition precedent to such representation, namely, bring in as a party to the proper action their legal representative, their trustee. Where the trustee is dead the cestuis que trust, through one or more, as their representative, can bring the action, since no trust shall fall for want of a trustee. Galveston R. R. v. Cowdrey, 11 Wall., 459.

It is plain that if the Union Trust Company is not cut off, and these plaintiffs are not cut off, by the Sackett suit, then no bar exists to the present action.

Park and Duncan held the $5,000,000 mortgage given to them as mortgagees by Hull and Lincoln. That mortgage should either have been cut off or wielded to cut off the French bondholders under the New York, Boston & Montreal Railway mortgages. In either case Park and Duncan and the trustees of the New York,

Boston & Montreal bondholders should have been made parties. The constitution, as it is judicially construed, provides that no person shall be deprived of his rights or property by any judg ment unless he is actually or constructively a party to the action in which the judgment is rendered. It is urged that the Union Trust Company was constructively a party because it did not ask to become one, and because it must have known of the existence and object of the suit. The evidence of its knowledge of the character of the action is too feeble to support a finding to that effect. It is a novel proposition that a person may lose his prior acquired property by hearing that other parties have become involved in a law suit about it. Even lis pendens only affects claims acquired after the suit is commenced. It is said that the plaintiffs might have come in if they had applied. Their application to do so would have been a concession of the point of their contention here, that the action was not a representative one. If they had come in they would have been bound, and if they had applied and been refused they would have been told in effect that their rights would be just as well protected if they were kept out as if they were let in, and thus they would have been bound except as against fraud. If they had come in, of course, they would have had an opportunity to resist the applications of Sackett and Tilden to spoliate the fund, but being out, they could not know of such spoliation until after it was accomplished, and then if they knew the law they knew they could not be made accessories after the fact by failing to seek to reclaim what was so effectually lost. Whatever might have been their duty if the action had been fairly conducted for the benefit of all we need not inquire, since in such case they probably would have been without the causes of complaint which they now set forth.

The plaintiffs, as we have already said, could have assented to the action and all that was done in it, and thus by their assent precluded themselves from complaint. But there is no presumption that a principal consents to the acts of his agent whereby his agent defrauds him. Quite the reverse. The absence of affirmative evidence that the plaintiffs did not consent is not the equivalent of evidence that they did.

We point out what was done and omitted, not for the purpose of declaring the rights of third parties, who may not now care to assert them, but to show how far Sackett and Tilden trifled with and subordinated the rights of the bondholders to procure priority for their own unsecured claims. Unless the plaintiffs can be held to have consented to the Sackett action, then whatever rights they could work out for themselves under the Union Trust Company's judgments, or the Park and Duncan mortgage, can be worked out in this action, since neither they nor the Union Trust Company nor Park and Duncan were parties to the Sackett action, and all necessary parties are made defendants in this action.

Sackett neglected for four years to bring the action to trial. Indeed, the trial seems to have been brought on and conducted by those who were interested to realize upon the claims which had been created during the four years of its pendency. There was

apparently some danger that further delay would imperil, by further accumulations, the par value of the claims already accumulated. Certainly Sackett waited until the wreck of the railroad, so far as the bondholders were concerned, was complete. Such an action, thus instituted, controlled, and resulting, cannot be upheld. It was not a representative suit in fact; if it was such in form and regularity, then it is effectually impeached for fraud.

The plaintiffs are entitled to a reversal of the judgment, and to a new trial, in which they will be entitled to relief substantially the same as if the Sackett action had never existed. They were in no sense parties to that action, and therefore their rights remain untouched. It is said that they are bound by the receiver's certifi cates, which were declared to be a first lien upon the property. This cannot be so without a violation of constitutional protection. The court acquires jurisdiction of the parties and of the subject matter before it, but, from the nature of the case, can only acquire jurisdiction of so much of the subject-matter as all the parties before it hold. When parties are unknown, equity provides for bringing them in, or reserving or securing their rights. A decree binds the parties to it. In railroad cases the courts have gone. further than in other cases in displacing prior liens in order to preserve and operate the railroad, but only as between parties to the action, actual or constructive. They can create no lien against persons not such parties, and can displace none. Raht v. Attrill, 106 N. Y., 423; 11 N. Y. State Rep., 9, and cases there cited.

As said in Union Trust Company v. Illinois Midland Co., 117 U. S., 460, "Those who take receiver's certificates must be deemed to have taken them subject to the rights of parties who have prior liens upon the property, and who have not been, but should have been, brought before the court. While this court, under some circumstances and for some purposes and in advance of the prior lien-holders being made parties, may have jurisdiction to charge the property with the amount of the receiver's certificates issued by its authority, it cannot without giving them their day in court deprive them of their priority of lien. When such prior lien-holders are brought before the court they become entitled, upon the plainest principles of equity, to contest the necessity, validity, effect and amount of all such certificates, as fully as if such ques. tions were then for the first time presented for determination."

The trial court refused to find as the plaintiffs requested that the receiver realized only $236,500 upon the $350,000 of certificates issued, but failed to find what sum he did realize.

The evidence shows that he did receive that amount, and we think fails to show that he received any more. Thus the loss or waste of $113,500 or more than 32 per cent. of the issue of certificates, would, if the certificates are first paid at par, be charged to the bond-holders. There may be an equity in favor of the purchasers of certificates that the reasonable cost of the permanent betterment of the railroad be charged to all the bond-holders, and thus ratably against the plaintiffs. Miner v. Beekman, 50 N. Y., 337.

The Central National Bank of Boston, a large holder of these