after stating the case as above, delivered the opinion of the court.
The bonds were void. The stock subscription was void. The stock certificate was void. But the stock was not void. The 1,000 shares with respect to which the void subscription was made and the void certificate issued were a part of the authorized capital stock, were as existent and valid as any other of the shares, and were fully within the directors’ power to dispose of for value to any one who had capacity to contract. Under the construction contract, Chamberlain was entitled to the proceeds of the sale of these shares, if sold, or the shares themselves, if unsold. In payment for labor and materials that went into the road the company delivered to Chamberlain the void bonds it took from Perry county on the void sale of these shares. Perry county lacked authority to subscribe for the shares and to- issue the bonds as it did. The county and the railroad company, in exchanging the bonds and the stock certificate, were in pari delicto. But the railroad company and Chamberlain had capacity to make the construction contract. In executing this contract the railroad company took void bonds it had received from Perry county, and turned them over to Chamberlain in payment of a valid debt, and in this the railroad company and Chamberlain were not in equal fault. Chamberlain, like any other purchaser, was chargeable with notice of the condition precedent in the proposition adopted by the voters; but he did not participate in the proceedings underlying the bond issue, and it was not his, but the railroad company’s, duty to perform the condition precedent. The railroad company received the bonds as blank pieces of paper; but, in passing them to Chamberlain as good payment of its debt to him, it must be held to- have represented that the condition precedent had been performed or would be performed, and that, on its failure to perform, it would deliver to him the shares in lieu of which the bonds were paid to him. The issuance of bonds and the subscription for shares by the county being nullities, the first that anything of substance appeared in the transaction was when the railroad company paid for labor and materials with the void bonds, and the first that the labor and materials were paid for in money was when Chamberlain sold the bonds to appellants or their predecessors in interest. So the outcome *112was that appellants’ money paid appellee’s debt, for which appellee was bound by its contract to deliver, not void bonds, but the very shares in question, which have lain unsold and unsubscribed for, except as they were sold to and subscribed for by Chamberlain in his contract.
The case of Ætna Life Ins. Co. v. Town of Middleport, 124 U. S. 534, 8 Sup. Ct. 625, 31 L. Ed. 537, relied on by appellee, is not found to be controlling. The present is not a case of subrogation, as that doctrine is defined in the books. Nor is the case of Railroad Co. v. Wade, 140 U. S. 65, 11 Sup. Ct. 709, 35 L. Ed. 342, cited by appellants, a direct precedent. But the principle, variously stated, is fundamental in equity that no one should be permitted to retain a specific, identified thing which, ex aequo et bono, he should surrender to another. The limits of the application of this principle cannot and should not be attempted to be stated with precision and finality, but, as Mr. Justice Miller suggested with respect to what constitutes due process of law, should be left to the long processes of judicial inclusion and exclusion. The root of the matter is, however, that courts of equity were called into being to enforce, and should continue to apply and extend the application of, those standards of common honesty and natural justice which appeal to the conscience of right-thinking men. In this case, appellee has received full consideration for the shares of stock in question. The consideration cannot be returned, but the stock can be surrendered. Appellee should not be permitted to hold the shares by reason of the fact that it turned over void bonds when it should have delivered' these identical shares.
It remains to determine whether other considerations prevent the granting of appropriate relief.
It is said that one of the appellants should be defeated because he had actual notice of facts which should have led him to full knowledge of the illegality of the bond issue. The bonds were signed by the officers of Perry county and delivered to the railroad company after the constitutional amendment of 1870 went into effect. As the bonds contained no recitals, every person was bound, at his peril, to find out whether they came within the exception to the constitutional inhibition. Actual notice, no question of bad faith being involved, should not be -visited with more serious consequences than constructive notice.
Perry county was not a necessary party. The bonds and the stock subscription having been adjudged void, the county has no possible interest in this controversy.
The stockholders of appellee were not necessary parties. This case does not involve an overissue of stock. These shares are part of the authorized capital. The directors had authority to contract for their disposal for value. Chamberlain, under the facts of the case, subscribed and paid for them. The stockholders are no more concerned than in any case in which a subscriber for shares asks a. specific performance of his contract. And this also disposes of the motion to dismiss the appeal. No cause of action was stated against Stebbins or any other stockholder. As the order admitting him to defend was improvidently granted, it is immaterial how he was let out.
*113Chamberlain was not a necessary party. The void bonds were payable to bearer. He took them for value. He transferred them for value. He did not transfer any right on the bonds against Perry county, for there was none. If there had been, that right would have been in the bearer. The void bonds, when put in circulation by the railroad company, represented the right to these shares of stock. If the railroad company had given to Chamberlain its direct written obligation to issue to bearer a certain number of shares, Chamberlain could have transferred his right without indorsement. The right that arose in Chamberlain on the delivery of the void bonds to him (namely,, to demand the stock) passed by his delivery of the bonds to the bearer. As no one can assert the right except the bearer, it is not necessary to appellee’s protection that former holders should be made parties to this suit.
Appellee insists that appellants are not entitled to ask equity without doing equity, by bringing into court for appellee’s use the interest paid by Perry county. The county received nothing, was obligated to pay nothing, and parted with nothing except voluntary gifts. If the county had paid moneys to appellants or prior holders on some other-claim, or without claim, appellee would have as much right to demand those sums. The void bonds came into the hands of appellee as blank paper. Appellee, under the facts of the case, issued them as evidences-of the right to shares of stock, and they can now serve no purpose but to identify the persons entitled to the shares.
Appellants are not chargeable with lac.hes. The bonds were not finally declared void until 1895. The litigation concerning the validity of the stock subscription ended in 1897. Within a few months this suit was commenced. . Appellee was not the owner of these shares,, but held them as trustee, and no limitation upon the right of action would begin until appellee denied the trust.
The decree is reversed and the cause remanded, with instructions to-enter a decree requiring appellee to issue certificates of stock as prayed for.