delivered the opinion of the court.
That the officers and directors of a private corporation are in a fiduciary relation to the corporation and to the stockholders is elementary. Their duty, under the principles of equity, is to serve their trust beneficiaries honestly, faithfully and without negligence. They may not avail themselves of their position for their own gain, profit or advantage when to do so involves negligence of duty, loss of their service or other loss, injury, detriment or disadvantage to the beneficiaries of their trust. It is fundamental in the law of corporations that the majority of the stockholders shall control the policy of the corporation and regulate and govern the lawful exercise of its powers and conduct of its business. "Wheeler v. Pullman, 143 Ill. 197, 207. But as between one stockholder and another there is also a fiduciary relation and a duty to act honestly and in good faith, so far as the exercise of their powers within the corporation is concerned. In the common enterprise they may not form combinations among themselves to crush the pecuniarily weaker by the force of overwhelming financial power. Through the community of interest a relation has arisen and exists, affording opportunities of wrongdoing that otherwise would not exist. A majority combination may protect its own financial interests, but it may not exercise its powers for its own sole benefit at the expense of the minority nor designedly so conduct the corporation’s affairs as immediately or ultimately pecuniarily to benefit some stockholders at the unequal and, therefore, unfair and inequitable pecuniary loss on the part of others. Equity will not tolerate a majority combination in a joint financial undertaking to perpetrate a wrong and injustice upon the minority, where the combination is made possible merely by the nature of the relation. There is in such joint financial venture a limited fiduciary relation between the parties thereto. .
*96Yet, while such are the duties and obligations of officers, directors and stockholders, there is no duty on their part to use individual pecuniary means to assist the corporation in its money difficulties or by use of such means to shield it from financial destruction.
The principles above referred to have been announced frequently and under various circumstances: See Chicago Hansom Cab Co. v. Yerkes, 141 Ill. 320, 334 et seq.; Bixler v. Summerfield, 195 Ill. 147, 150; Hoffman v. Reichert, 147 Ill. 274, 279; Bruschke v. N. Chicago, etc., 145 Ill. 433, 445; Green v. Hedenberg, 159 Ill. 489, 493; Farwell v. Great Western Tel. Co., 161 Ill. 522, 606; Adams v. Burke, 201 Ill. 395; Brown v. De Young, 167 Ill. 549.
In Ervin v. Oregon Ry. & Nav. Co., 27 Fed. Rep. 625, 630, there was a controversy where a majority combination exercised its powers wholly according to the forms of the law, and yet a court of equity intervened to prevent injustice to the minority. Speaking of the majority, who were defendants, the court said:
“Plainly, the defendants have assumed to exercise a power belonging to the majority in order to secure personal profit for themselves without regard-to the interests of the minority. They repudiate the' suggestion of. fraud, and plant themselves upon their right as a majority to control the corporate interests according to their discretion. They err if they suppose that a court of equity will tolerate a discretion which does not consult the interests of the minority.”
And at p. 631, the court quotes Justice Blackburn in Taylor v. Chichester Ry. Co., L- R. 2 Exch., 356, as follows:
“As the shareholders are, in substance, partners in a trading corporation, the management of which is intrusted to the body corporate, a trust is, by implication, created in favor of the shareholders that the corporation will manage the corporate affairs, and *97apply the, corporate funds, for the purpose of carrying out the original speculation.”
And then continues:
“When a number of stockholders combine to constitute themselves a majority in order to control the corporation as they see fit, they become for all practical purposes the corporation itself, and assume the trust relation occupied by the corporation towards its stockholders. Although stockholders are not partners, nor strictly tenants in common, they are the beneficial joint owners of the corporate property, having an interest and power of legal control in exact proportion to their respective amounts of stock. The corporation itself holds its property as a trust fund for the stockholders who have a joint interest in all its property and effects, and the relation between it and its several members is, for all practical purposes, that of trustee and cestui que trust”.
We concur in these expressions as being equitable principles controlling stockholders in the exercise of their powers, as such, within the corporation.
In Farmers’ L. & T. Co. v. N. Y., etc. R. Co., 150 N. Y. 410, at page 430, the following quotation is held to be the law:
“The law requires of the majority of the stockholders the utmost good faith in their control and management of the corporation as regards the minority, and in this respect the majority stand in much the same attitude towards the minority that the directors sustain towards all the stockholders”.
Indeed, the foregoing legal propositions are not very seriously controverted by the defendants in the case at bar.
We are convinced that- under the circumstances herein a demand that the corporation bring this suit would have been useless.
Counsel for appellants in their brief say “the findings of the master sustained by the court will be accepted by this court”, and they then proceed to as*98sume such findings “as established facts of the case”. The doctrine counsel seek to invoke, as to the conclusiveness of the master’s findings when confirmed by the chancellor, is, in reality, the common law doctrine of res adjudicata, for there is no applicable statutory enactment. Counsel, in their brief, continuously refer us to these findings, in diregard of the abstract and the record.' This plan of argument and presentation of the case has vastly increased the labor of this court. Conceiving, however, our duty in the administration of justice to be of a higher order than that of mere moderators between counsel for contesting parties, one or the other of whom may to a greater or less extent labor under a misapprehension as to practice or procedure, we have gone back of these findings into the abstract and, at times, into the record, in order to ascertain the facts. Counsel’s duty is to aid and assist the court; but when there is a misapprehension by counsel, either in matters of procedure or in matters of substantive law, we do not consider that in order to save ourselves labor, we may remain indifferent whether the result in the cause be justice or injustice.
Masters, in the proper exercise of their function, are exceedingly helpful to the chancellor. Under the law we are not, however, permitted to give any adjudicative effectiveness to their conclusions or their reports. The chancellor has no right to do so. He cannot, to any extent, delegate to the master his (the chancellor’s) duty to exercise and rely wholly upon his own judgment. The function of the master is to perform clerical and ministerial duties in the progress of a case. Ennesser v. Hudek, 169 Ill. 494; Hards v. Burton, 79 Ill. 504; De Leuw v. Neely, 71 Ill. 473.
The findings of a master on questions of fact must not be given the consideration and weight by a chancellor that the verdict of a jury is entitled to receive from the presiding judge in a common law case. Larson v. Glos, 235 Ill. 584.
*99A chancellor cannot, either upon his own motion or upon the request of a party, abdicate his function to determine, by his own judgment entirely, the controversy presented and devolve that duty upon one of his officers. Without consent of the parties it is not competent for the chancellor to refer the entire decision of a case to a master, for it is not within the general province of that officer to pass upon the issues in an equity case. Kimberly v. Arms, 129 U. S. 512; Garinger v. Palmer; 126 Fed. 906. The law does not even contemplate the preparation by the master of an opinion on the law in the case, and for a chancellor to allow a master to charge costs for writing such an opinion, stating his reasons and quoting authorities, is contrary to law. Manowski v. Stephan, 233 Ill. 409.
Appellants’ counsel contend in their brief, in effect, for power of decision in the master which would be of adjudicative effectiveness, i. e.: for power of decision in him to such an extent that his findings, when confirmed by the chancellor, would be res adjudicata and conclusive. They say: when the chancellor’s conclusions upon the facts are strengthened and reinforced by the master’s findings, then those conclusions are conclusive on tins court. They, however, in their reply brief, rather recede somewhat from this position. The law is that the master is not a judicial officer and hence he cannot, to any extent or in any degree, exercise power determinative upon the rights of the parties, i. e.: he may not exercise judicial power. Neither can the chancellor confer adjudicative power of decision upon him. Cowan v. Kane, 211 Ill. 572, 575; Hards v. Burton, 79 Ill. 504, 509; Ennesser v. Hudek, 169 Ill. 494; De Leuw v. Neely, 71 Ill. 473.
Indeed, the contention for power of 'decision in masters to any extent adjudicatory in its effectiveness is based upon a misconception of our judicial institutions and the source of judicial power. Adjudication, exertion of judicial power, is an exercise of the sover*100eign power of the state—the governmental power. A determination arrived at in the exercise of judicial power, when rightfully exercised, is res adjudicada, i. e., conclusive. The doctrine of estoppel in pais is another doctrine of conclusiveness, hut it rests upon other principles and is not applicable here. It has long since been held in this state that power of decision of adjudicatory effectiveness or conclusiveness comes only through the constitution from the people, and cannot otherwise be obtained, even by consent of the parties immediately concerned. The exercise of such power by a master or anyone not of the judicial branch of government is not permitted, and a law granting such power to any person or body other than as designated in the constitution is unconstitutional. Hall v. Marks, 34 Ill. 358; Hoagland v. Creed, 81 Ill. 506; People v. Chase, 165 Ill. 527; Hards v. Burton, 79 Ill. 504; People v. Altgeld, 43 App. 460.
The exercise of the judicial power consists in ascertaining the facts, in determining what the law is, and what law. i e., legal principle or statutory enactment, is applicable to the particular facts, and in then applying the law to the facts. The conclusions upon the law and the facts and the application of the law to the facts by the master can in no degree be regarded as of adjudicatory or conclusive effectiveness until fully examined and passed upon by the chancellor, and then the conclusions if approved become the conclusions of the chancellor and his decree may be reviewed according to law.
We come, then, to the facts. We find that the evidence neither sustains the allegations of the bill charging or suggesting fraud nor does it show that either Peter, Ezra C. or William H. Fahrney in any wise committed any fraud upon the complainants or either of them. The evidence proves no breach or violation of any fiduciary duty or obligation arising, out of the relations that existed.
The evidence shows: That in 1892, William and *101John Kelly discovered a deposit of chalk and, adjoining it, a clay deposit, on Little River, in a part of Arkansas which some witness characterizes as a “howling wilderness”. The chalk deposit was not unusual in Arkansas and Texas but complainants claimed for their discovery a superiority in quality, which superiority is disputed. By several purchases and options the Kellys secured about 3,000 acres of land at a cost of about $40,000. In extent the chalk deposit was about 900 acres and the clay deposit about 600 acres. December 16, 1893, the Kellys and one Metesser organized the White Cliffs Portland Cement and Chalk Company, with capital stock as stated heretofore. William Kelly subscribed for all the stock except four shares, and of these four John subscribed for two and and Metesser for two. Metesser was elected president, William Kelly secretary and John Kelly treasurer. The stock was divided into 8,000 shares of preferred stock, which remained in the treasury of the company, and 32,000 shares of common which went to the Kellys and Metesser. The preferred was subsequently converted into common so that all the stock was placed on a level. The land went to the company for the 32,000 shares of stock. Whether the land was all paid for by Kelly is not made clear and does not seem to be material, for it has been all paid for at some time. William J. Kelly testifies that he had spent $15,000 in preliminary work. At the annual meeting, on Fébruary 4, 1895, David B. Coulter, from whom considerable of the land had been bought and who had not been fully paid when the Fahrneys were first approached, was substituted for Metesser as director.
In the fall of 1895 William J. Kelly came to Chicago with a prospectus, reports of analyses by chemists, samples of chalk, plans for the erection of a plant for the manufacture of cement from the chalk and clay, a statement of the company’s offer for the sale of a bond issue of $125,000 at eighty cents on the *102dollar with an amount of stock, as a bonus, equal to the amount of bonds taken, etc. The proposed plant was estimated to cost fifty to sixty thousand dollars so that about forty thousand dollars would be left for working capital. It was stated in the statement that the works would have a capacity of 500 barrels per day. One John W.- Bead, with whom Kelly had a previous acquaintance, was a bookkeeper with the Dr. Peter Fahrney Sons Company. Bead interested himself in Kelly’s matter and introduced Kelly to Ezra C. Fahrney and some of his friends and associates; of the latter A. 0. Cooper and John E. Scully became interested. Kelly had a subscription list to be signed by subscribers for the bond issue and he obtained some subscriptions of $5,000 each, among them being E. C. Fahrney’s subscription for that amount; but these subscriptions were all dropped. Early in December, 1895, Kelly, Ezra C. Fahrney, Cooper and Scully went to White Cliffs and looked over the ground. The nearest post-office to White Cliffs was Johnston, five or six miles away, where there were a small general store and two or three huts. While in Arkansas they stopped at the house of David B. Coulter, who is now one of the complainants. Meetings of the directors and stockholders were held in Texarkana on December 16, 1895, and a bond issue of $125,000 was there authorized, to he secured by a trust deed on all the company’s property. Accordingly bonds were issued of $1,000 each, dated December 31, 1895, and bearing interest at 6% per annum, payable half-yearly on the first days of January and of July in each year, and a trust deed to the Title Guarantee and Trust Company of Chicago, to secure those bonds, was executed and recorded. The trust deed contained a provision that, if default in interest continued for six months after demand, the principal should become due and payable.
Upon the return of the Fahrney party to Chicago E. C. Fahrney took $25,000 of the company’s bonds, *103which were paid for by Peter Fahrney’s check dated December 27, 1895, to the order of Ezra C. and by the latter indorsed to the company. This check was paid through the Chicago Clearing House on January 3, 1896. About the same time Kelly succeeded in obtaining for the company $25,000 more from North & Taylor by the sale of $5,000 and the hypothecation of $50,000 of the bonds to them. North & Taylor was a private banking firm which shortly thereafter failed and all its bonds came to the Fahrneys later. As part of the bargain for the sale of the $25,000 of bonds to Ezra C. Fahrney he was given the $200,000 of treasury stock, some of which he distributed among his friends. Kelly, of his stock, gave to John W. Bead $50,000 and to Ernest Dale Owen, his lawyer, $25,000. A stockholders’ meeting was held in Chicago on December 30, 1895, at which the board of directors of the company was increased from three to five, and to make up the number Ezra C. Fahrney and John W. Bead were elected directors. According to the by-laws the company’s annual meetings were held on the first Monday in February each year. February 3, 1896, William J. Kelly was elected president, E. C. Fahrney vice-president, John Kelly secretary and treasurer, and John W. Bead assistant secretary and treasurer.
About April 7, 1896, Kelly, as president of the company, arranged with Peter and Ezra C. Fahrney to take the remaining bonds, amounting to $45,000. Stock of an equal amount went with these bonds and by August 11,1896, these had all been paid for by checks issued from time to time. Another $25,000 of the bonds was turned over to E. C. Fahrney in August, 1896, to secure him for an advance of $20,000 on August 20, 1896. The company’s note, payable in one year, was given him to evidence this advance. This $25,000 of bonds was part of the $50,000 deposited with North & Taylor as collateral.
By means of negotiations between William J. Kelly *104and E. C. Fahrney, during November and December, 1896, as his checks show, Peter Fahrney purchased $25,000 more of the bonds of the company. These were the last bonds of the company that the Fahrneys obtained and the bond holdings of the Fahrneys thus amounted to $120,000 out of the $125,000 issue. There were some transactions between Kelly or the company and the Fahrneys respecting smaller amounts, but they are not' material. In connection with this last $25,000 of bonds complainants make what they evidently regard as one of the most serious of their charges of breach of fiduciary duty and obligation against the Fahrneys. Kelly has even brought a personal suit in connection therewith, wherein he has been defeated. Kelly testifies that the arrangement for the sale of this $25,000 of bonds was made with Ezra C. Fahrney and that, as part of the transaction, Fahrney was given $25,000 of stock by him, Kelly, personally, and he, Fahrney, promised to make the company a loan of $75,000 for ten years on its unsecured note for that period, and that subsequently, when it came to the point of making that loan, Fahrney refused to make it. Kelly states that Fahrney told liini he could not procure the money from his father except upon conditions he did not think Kelly would accept. Fahrney denies making any such promise. Kelly also says that, upon Fahrney’s assurance, “we naturally built a very much larger plant than we would have done if we had figured on a small amount of money”, and that Fahrney participated in the plans for a larger plant. • We believe that on account of his hopeful and sanguine, if not visionary, temperament, Kelly possibly exaggerated some casual remarks by Fahrney, to the effect that he would endeavor to raise that amount, or see that it was raised, for the company, into a promise to loan it. Kelly’s several statements of what Ezra C. Fahrney said on the subject and not consistent. Considering all the circumstances we do not believe any promise was made to make any such loan. *105It does not even appear that Ezra C. Fahrney was at that time personally able to make any such loan or that Kelly had any information upon which he supposed or whereupon he was justified in supposing that Ezra C. Fahrney had the ability to make a loan of that amount. At all events, taking either Kelly’s or Fahrney’s view, there is nothing in this incident upon which fraud or breach of any trust duty or obligation can be predicated, be the incident considered alone or in connection with other facts in the case. Furthermore, there is no evidence tending to show that Peter Fahrney or William H. Fahrney authorized such promise by Ezra C. Fahrney or was in anywise connected therewith. Were there a breach of fiduciary duty, we could not assume or presume fraudulent participation on their part. Kelly places the occurrences in connection with this promise and refusal to carry it out in December, 1896, and January, February and March, 1897. The charge in the bill of complaint that the Fahrneys, in respect to the making of this promise and the refusal to carry it out, were actuated by the motive or purpose of securing the property of the company for themselves is not sustained by the evidence.
At the regular annual meeting of the stockholders of the company, held at White Cliffs, Arkansas, February 1, 1897, William J. Kelly, Ezra C. Fahrney, W. H. Fahrney, David B. Coulter and John Kelly were elected directors. The Fahrneys with some of their friends were then present. Shortly before there had been a public exhibition of starting the machinery and starting the company for business; but this starting was only a pretense, for the company’s plant was in an unfinished condition and required more money for its completion before cement could be manufactured. At this time the company was in financial distress and apparently continued so until its activity terminated by the foreclosure of its property on August 3, 1901. The Fahrneys wisely, as the evidence shows *106and as they certainly rightfully might, refused to put any more money into the company.
In April or May of 1897, Kelly while endeavoring to raise money for the necessities of the company when Fahrney refused to provide money therefor, told Fahrney: “I have got to have this money and you had better put this money in. You have got big interests here at stake; if you don’t, I will get somebody else”. After that Kelly (without the Fahrneys knowing whom he was negotiating with) procured William Edenborn, president of the American Steel and Wire Company, to furnish money for the company. Kelly endeavored to get $75,000 from Eden-born, but he would only loan $50,000. The loan was made by Edenborn upon a note and second mortgage dated May 21, 1897, running for one year. As part of the terms for making the loan Edenborn required $300,000 of the company’s stock absolutely and $300,-000 as collateral security, and that he should he president of the company. E. C. Fahrney had previously loaned Kelly $2,000 upon a judgment note and advanced the company $5,500 for machinery upon its note. On May 19, 1897, learning of the negotiations with Edenborn, Fahrney put his $2,000 note into judgment. He also insisted that the $5,500 note should be included in the Edenborn mortgage, which was acceded to. A directors’ meeting was held on May 21, 1897, at which Coulter resigned and Edenborn was put in his place. Edenborn was elected president, William J. Kelly was made secretary and John Kelly remained treasurer. The Edenborn mortgage was then authorized.
The evidence in the record does not sustain the allegation of the bill that the Fahrneys approached Edenborn with a proposition that he join them in a conspiracy to wreck the company so they might obtain all the property of the company for themselves.
The money obtained from Edenborn was used to pay past interest due on the Fahrney bonds and in *107discharge of other indebtedness of the company; and $18,000 or $19,000 remaining was expended in improvements or enlargement of the plant. But this additional money did not place the company upon a dividend-paying basis and it continued in financial distress. The interest days came around with regularity.
The vague charges in the bill of fiduciary misconduct on the part of the Fahrneys in connection with one Bartol are unfounded. It is true, however, as charged, that in 1897 the financial condition of the company was desperate. Edenborn became anxious to get his money back and to get out of the company.
In the early part of 1898 the company concluded to make an issue of $250,000, of what was called “consolidated bonds”. Kelly testified that at this period he and his friends “had control of the Board of Directors”. Mr. Kelly negotiated with one DeGoeijen, a Hollander, and induced him to take $108,000 of these bonds. As part of this transaction, consummated July 25, 1898, De Goeijen required and obtained from Mr. Kelly a bonus of $502,500 of the company’s stock. Of the remainder of this consolidated bond issue sufficient was reserved—about $115,000—to take up the Fahrney bonds when due, and $27,000 was put up in trust with the Guardian Trust Company of Kansas City under some arrangement between Kelly and De Goeijen. It was also a condition of the arrangement with De Goeijen that the “Kellys were to have and retain the active management” of the company’s business.
The stockholders’ meeting of 1898 was, for want of a quorum, not held in February, but was held April 30 of that year, at White Cliffs. The consolidated bonds and form of mortgage were at that meeting approved. The board of directors was then changed from five to seven and Edenborn, E. C. Fahrney, William J. Kelly, John Kelly, C. P. Murray, Edgar Drain and Coulter were elected directors. Edenborn, Fahr*108ney and William J. Kelly continued in their respective offices of president, vice-president, secretary and treasurer.
The charge in 'the bill against E. C. Fahrney that he, on December 26, 1897, had agreed with Kelly to give him $110,000 of the Fahrney stock if he, Kelly, succeeded in obtaining $100,000 for the company on the consolidated bonds, is denied by Fahrney and is an absolutely immaterial matter, except that it explains Kelly’s conduct in instituting certain lawsuits against Fahrney in Arkansas. Through connivance between William J. Kelly, Owen, Coulter and Jones, who was the company’s local attorney, an attachment suit was brought in Arkansas by Coulter, upon a note he held against Kelly for $10,000. Substantially all the Fahrney stock in the company was then levied upon in order, as substantially conceded, to get it into hands friendly to the Kellys. The ground for levying on the Fahrney stock for Kelly’s debt was that when Kelly transferred the stock to the Fahrneys there had been a failure to comply with some registering requirement of the Arkansas statute. Kelly had stock which was not levied upon.
This Coulter attachment of the Fahrney stock was not a fraud. But a court of equity, guided by conscience, does not regard the taking of one person’s property to pay another’s debt, or an effort to coerce one person to pay the debt of another, as commendable. If Coulter had included in his levy all the Kelly stock, he would have occupied a better position before a court of equity. As it is, he was evidently combining with Kelly against the Fahrneys rather than merely attempting to collect a debt justly due him.
At this time E. C. Fahrney was in Arkansas to attend the directors’ meeting held April 30, 1898, and immediately after the meeting he was served with process in the attachment suit and in three suits then instituted by Kelly. One was a suit for damages for not making the $75,000 loan, another was an action *109at law to recover damages for refusal to deliver the $110,000 of the company’s stock to Kelly, and the third was a bill to compel specific performance of the agreement to deliver to Kelly the $110,000 of stock. Thereafter the relations between the Fahrneys and the Kellys were not friendly. All the E. C. Fahrney stock was sold in the Coulter attachment suit and litigation in respect thereto followed. Fahrney returned to Chicago early in May and Ernest Dale Owen took occasion to call upon him. Owen then informed Fahrney that his stock had been attached, that for some technical legal reason the Fahrney bonds were worthless, and said: “They (the Kellys) have got you tied up in such a manner you can’t move a hand. The best thing you can do is to settle and settle at once.” Apparently what was desired of the Fahrneys was that they should give up their stock to the Kellys. A letter written by Kelly to John W. Bead, dated August 4, 1898, also indicates this. E. C. Fahrney attended no meeting of the company after April 30, 1898, until February 5,1900. Kelly, by extremely unwise conduct, detrimental to the welfare of the company, had compelled the Fahrneys to believe that their interests as bondholders were at stake, and that they must fight for their rights as bondholders—and this while he was in control. The Fahrneys, after this, took no part in the management of the corporation during a long interval of time, perhaps a year and a half or more. The arrangement with De Goeijen was made by Kelly and he and De Goeijen thereafter controlled the majority of the stock. For a long time after De G-oeijen became interested the Fahrneys knew nothing of him or his interest in the company. Nor did they have any communication with him or come in contact with him until December 26, 1899. On that date McDougal Hawkes, who represented De Goeijen, telegraphed the Fahrneys from New York, asking for a meeting in Chicago.
In the meantime there had been some change in the *110directorate by Owen, Scott, Vaughan and Hawkes having been elected in the places of Coulter, Drain, Murray and Edenborn. John Scott had also become president in place of Edenborn. These changes were made by the Kellys and the De Goeijen interests. Out of the $108,000, Edenborn had been paid but the Fahrney’s $5,500 note was not paid. The remainder of the $108,000 had been expended under the Kelly regime, and Kelly was short of money again. He endeavored to raise $12,000 by hypothecation of the $27,000 of bonds placed with the Guardian Trust Company, but was prevented by DeGoeijen. The Fahrneys had no connection with his being so prevented, and it does not appear that they even knew of the fact. True it is, as alleged in the bill, that during this interval when the Fahrneys took no part, the affairs of the company got into “a critical and desperate” financial condition, but this was under Kelly’s management and in nowise was it brought about by the breach of any trust, duty or obligation on the part of any of the Fahrneys.
The Kelly-Fahrney litigation continued during the latter part of 1898, during 1899, and even thereafter. Kelly, it seems, ultimately failed in his suits. Foreclosure proceedings were instituted July 13, 1897, by W. H. Fahrney in a state court in Arkansas upon the Fahrney $5,500 note, secured by the same mortgage which secured the Edenborn $50,000 note. This suit was prosecuted for some time, and in January 1900 was transferred to the United States Circuit Court and consolidated with the De Goeijen foreclosure suit, to which we shall refer presently. In the Coulter attachment suit, no defense was made and the Fahrney stock levied upon was sold at a sheriff’s sale August 28, 1898. Mr. Coulter bought it in. Upon a bill filed by Fahrney in the United States Circuit Court this sale of the stock was set aside on May 21, 1900, and a re-sale ordered. A re-sale was made by the sheriff on August 11, 1900, and at this sale Coulter *111again bought in the stock. With reference to these sales of the Fahrney stock the appellants insist that, “The sale having been made to Coulter in August, 1898, confirmed by the state court in that month, the title to this stock in Coulter was complete and effectual from that day.” We are inclined to agree with that contention. And if the contention is correct the stockholder relation between the Fahrneys and the other stockholders as well as between the Fahrneys and the corporation itself, then terminated. If that be so, then the fiduciary relation arising out of the holding of stock with its duties and obligations toward other stockholders terminated on August 28, 1898. We have already seen that there was no breach of any such duty or obligation before that point of time. At all events the relation terminated by the re-sale of the stock and purchase thereof by Coulter on August 11, 1900.
But whatever the date of severance of the relation of the Fahrneys to the company as stockholders, by the act of complainant Coulter, we do not find that the evidence in this record justifies a decree against the Fahrneys for breach of any duty or obligation arising from their relation as stockholders or officers of the company. It must at all times be borne in mind that the Fahrneys had a first lien upon the company’s property for a sum of about $115,000 cash put into the company. As holders of this first lien they had •certain paramount rights which all the stockholders and officers were, at the time the money was advanced, very willing to acknowledge and which they have ever since been in duty bound to acknowledge and concede, both at law and according to the principles of equity. No effort by the Fahrneys with a view merely to collect the money due them from the company, by means or according to methods provided by law, can be regarded as a breach of any fiduciary relation.
During the interval that the Fahrneys were not actively participating in the management of the com*112pany’s affairs, De Goeijen evidently became desirous of withdrawing. In September 1899 he gave Kelly an option on the DeGoeijen interests at principal and five per centum per annum interest. If the Kellys were unable to avail themselves of the option by January 6,1900, they were to withdraw from the management of the property.
During this interval Kelly also brought about a leasing of the entire plant and property of the company. The Kellys with their adherents, held stockholders’ and directors’ meetings on December 9 and 16, 1899, at which neither the De Goeijen nor the Fahrney interests were present. There is some contention as to the notices for these meetings, but certainly Scott, the president, was notified, yet he was not present. At these meetings Coulter voted the Fahrney stock which he had purchased at the sheriff’s sale. But in view of subsequent events precisely what took place at these meetings is not now very material. However, a lease of all the company’s property to the Arkansas Portland Cement Company was considered and authorized. The lease bears date December 16, 1899, and the lessee company was organized on that date with a paid in capital of $40,000 to take that lease. On the part of the White Cliffs Company it is executed by W. J. Kelly, president, and attested by John Kelly. The term of the lease is five years from December 16, 1897, with a renewal option for five years more. The rental specified is $20,000 per year. There is a controversy as to the amount of the company’s fixed charges per annum. The complainants claim $15,000 per year and the defendants considerable more. There was no provision made for the pending $5,500 forclosure.
It is more than probable that Hawkes, who represented De Goeijen, heard of the making of this lease immediately, and that such information induced him to send the telegram of December 26, 1899, already spoken of, and the De Goeijen and the Fahrney inter*113ests were "brought in touch with each other. Previously there had been no concert of action between them, but from this time on they acted in conjunction, until the Fahrneys received back the money they had loaned the company.
Acting in concert they filed two bills in equity in the Federal court in Kansas. One of these bills, entitled Cooper v. "White Cliffs Company, was to set aside the above mentioned lease made by the company to the Arkansas Portland Cement Company as fraudulent. The other bill nominally entitled Guardian Trust Company v. White Cliffs, etc., Company, was filed on behalf of the De Goeijen interests, to foreclose the mortgage securing the consolidated bonds of which De Goeijen held $108,000. These bills were filed January 6, 1900. The lease controversy, so far as it concerned the Arkansas Portland Cement Company, was settled with that company by the De Goeijen and the Fahrney interests and the Cooper bill was dismissed in a very short time. It appears from the evidence that in the settlement the Arkansas Cement Company was repaid a few thousand dollars that it had laid out or expended for the "White Cliffs Company. In the foreclosure suit there was a sharp controversy.
W. J. Kelly and Ernest Dale Owen, complainants, testify herein that Mr. Owen and his local associates, Jones & Hudgins, were not permitted to make a defense for the White Cliffs Company in this foreclosure suit. The record thereof is against them. So far as the present suit is concerned,, it is only necessary to ascertain whether fraud in the making of the above mentioned lease and the right to bring the suit for foreclosure at the time it was brought, were in issue. It appears from the record that on February 3, 1900, an answer to this foreclosure bill on behalf of the White Cliffs Company was filed by Jones & Hudgins and Ernest Dale Owen as its solicitors. This answer was sworn to by W. J. Kelly. Allegations appear in the *114bill charging fraud in the making of the lease. In this answer the validity of the lease is asserted, the allegations of its fraudulent nature denied and assertions made tending to show its bona fides and the absence of all fraud in connection therewith. The answer also denies that there was any interest due upon the $108,000 of bonds which alone could authorize the filing of the bill. Ernest Dale Owen in his testimony herein admits that he was permitted to appear in the suit and make arguments and that he filed a brief therein. A decree of foreclosure was rendered May 17, 1901, and therein it appears that it was rendered upon argument of counsel including “Paul Jones and E. D. Owen representing the defendants." The decree provides for the payment of costs including “the allowance heretofore made to Messrs. Jones and Owen by the court as counsel for the defendant", which counsel fee, it appears, was $2,000. In view of these facts no amount of assertions by Mr. Owen and Mr. Kelly of the discharge of Jones and Owen as attorneys for the company would establish as a fact that Jones and Owen did not appear and make a defense for the company upon these questions of validity of the lease and the existence of a right to foreclose. Furthermore, Mr. Owen does not particularize and specify as to what he did in court at all the various times he attended in the matter of the foreclosure after his discharge as attorney for the company. He seeks to evade inquiry into that subject by stating his conclusion that he was refused a hearing. Evidently there was a real litigation, a real defense and a real contest upon the two defenses above referred to. The decree entered May 17, 1901, held the lease fraudulent in law and invalid and interest on the De Goeijen bonds past due when the bill was filed. It is a well-established principle of law that counsel, as well as the parties, are conclusively bound by the decree of the court. In Guardian Trust Company v. White Cliffs Portland Cement & Chalk Company et al., 109 Fed. Rep. 523, *115appear the grounds upon which the lease was set aside and the right to file the bill was held to exist. We do not, however, regard that case or opinion as being in evidence herein.
As between the complainants herein and the Fahrneys the lease must be regarded as fraudulent and conclusively so. Therefore, all the concert of action between the Fahrneys and the De Goeijens with a view to having it set aside was perfectly proper and lawful; although such concert of action may appear as' a combination against the complainants and may, to them, appear as against the interests of the company.
It is perfectly apparent why the Fahrneys acted in concert with the De Gloeijens. The Fahrneys had prior and superior liens and they wanted their money back and not the property.
At first, January 2, 1900, a reorganization scheme was considered and a reorganization agreement made. The evidence shows that this scheme and agreement were not acted upon. Dr. Peter Fahrney would not have been very wise if he had entered into that scheme. He had the prior liens and he wanted his money, why should he join in reorganization? At all events he did not. To the extent of bringing about a forclosure sale of the property so that he would get his money through the De Gloeijen interest, he did join with the De G-oeijen interests. For that purpose he had an equitable and lawful right to do so. To obtain for the Fahrneys any more, or any interest in the property after the sale, they would have had no equitable or legal right to join with De Goeijen. The complainants have absolutely and totally failed to connect the Fahrneys, who are the only defendants before the court, with the property of the company after the sale. The evidence is convincing to the contrary. Complainants are shooting far wide of the mark when they argue: “What we complain of is not as to who got the property, or what became of it, but that we are deprived of it and the value of our stock destroyed.”
*116February 5, 1901, a bill of foreclosure was filed on behalf of the Fahrneys to foreclose on their bonds. That bill is entitled Title Guarantee & Trust Company v. White Cliffs Company. The suit was consolidated with the Guardian Trust Company’s bill foreclosing the De Goeijen bonds. Under the decree entered in the consolidated suit on May 17, 1901, the property of the company was sold on August 3, 1901. At that sale the Fahrneys bid $150,000, supposedly sufficient to cover their liens. A representative of the De Goeijens bid $160,000 and the property was struck off to him. On August 20, 1901, the sale was confirmed by the court. The Fahrneys obtained a return of the money they had loaned the company. Under the law of Arkansas it appears there is no period of redemption.
We find in this record no evidence of breach of fiduciary duty or obligation on the part of the Fahrneys. The facts in this case required a decree of dismissal for want of equity.
The decree of the chancellor is affirmed.
Affirmed.