UNIVERSITY v. THE BANK. property and right of disposing of goods, may be a conversion in itself, and render a demand and refusal unnecessary." Nor is it material to put the statute in motion, that the exercise of the dominion over the goods, and applying them to the wrong-doer's own use, should be known to the owner. Hamilton v. Shepperd, 3 Murph., 115; Blount v. Parker, 78 N. C., 128. The principle is thus well settled, that the goods of the owner may be converted so as to expose the party to an action, not only by taking an unauthorized possession, but by retaining it under an assertion of right to hold in defiance. of such owner, and this may be of public securities as well as of other property. Brickhouse v. Brickhouse, 11 Ire., 404. Reverting to the evidence, it is shown that the original deposit and delivery of the bonds to raise money, was an illegal and unwarranted use of them by the officer in whose custody they were placed, though then not known perhaps to the Bank, and when the fact was made known to it, the president claimed the right to hold and apply them according to the terms of the contract, as a collateral security for the loan, and in resistance of the claims of the University, and they were thus subsequently disposed of. Now, under these circumstances, was a formal demand needed to put the defendant in the wrong, and give the plaintiff a cause of action? The defiant attitude and claim of the Bank, in opposition, was itself a refusal to recognize the plaintiff's right, and with possession, an exercise of dominion over the bonds; and a demand for restitution was substantially denied in advance, and thus dispensed with. But the plaintiffs' counsel seek to escape from the legal consequences of the long delay, by treating the action as brought by the cestui que trust against the depositary as a trustee, calling for an account of the trust fund, to which it is insisted the statute does not apply. The distinction is well marked between trusts expressly created between the UNIVERSITY v. THE BANK. parties, and those declared by the Court, in respect to the operation of the statute of limitations. We refer to some of the many adjudications in this State pointing out the difference: "In Edwards v. University, 1 D. & B. Eq., 325, it is settled," remarks PEARSON, J., “upon principle and authority of the cases, that the statute of limitations protects one who has the legal title, and is sought to be converted into a trustee against his consent." Taylor v. Dawson, 3 Jones Eq., 86. In a previous case the same learned Judge had thus declared the rule: "Where a trust is not created by agreement of parties, but the person having the legal title is converted by a decree into a trustee on the ground of fraud, he may insist that his possession was adverse, and protect himself under the statute of limitations." Uzzle v. Wood, 1 Ired. Eq., 227. And again he says: "The relation between the heirs of Walker and Pannill was that of trustee and cestui que trust by agreement of parties. So Pannill's possession for no length of time would divest the title of his trustee, for the simple reason that it could not be adverse." Taylor v. Gooch, 4 Jones, 436. The fiduciary may, however, sometimes occupy a hostile relation, and then the statute begins to run. "If a trustee repudiate the trust by clear and unequivocal acts or words, and claims thenceforth to hold the estate as his own, not subject to any trust, and such repudiation and claim are brought to the notice of the cestui que trust, in such manner that he is called upon to assert his equitable rights, the statute will then begin to run." 2 Hill Trustees, $864. "When the trustee makes a conveyance of the trust property, in breach of the trust, and his grantee continues to hold adversely, the statute applies." 2 Dan. Ch. Prac., 1735. We cannot perceive how any express trust was created so as to form that relation between the present plaintiff, whose UNIVERSITY v. THE BANK. property has been diverted to the use of its treasurer by his own attempted tortious disposal of it, in disregard of his own obligation, and the defendant, who participates in the act and takes benefit under it. The fund may be pursued and recovered, because the property has not been changed by the hypothecation, and this by action at law as well, if this be a proper case for equitable interposition, as by suit in a Court of Equity. When the remedy is thus open by either mode of proceeding, no matter which is adopted, the statute is equally available as a defence. In Burgin v. Lenoir, 1 Car. L. Rep., 117, HALL, J., for the Court, says: "When suits are brought in this Court, over the subject matter of which Courts of common law, as well as this Court, have jurisdiction, this Court will consider itself as much bound by the statute of limitations as a Court of Law. But in cases where it has exclusive jurisdiction, as in all cases of trusts, the statute does not stand in the way," referring to the class of trusts denominated express, in opposition to those created by decree. As the action would at once lie against the Bank, when, advised of the plaintiff's claim, it retained and exercised dominion over the bonds and disavowed any right in the plaintiff inconsistent with that derived from the hypothecation made by its faithless officer, it seems to us manifest the statute then began, at least, to run its course, for it is the right to sue, and the failure to sue, within the prescribed time, that give efficacy to the statute. The jury find upon issues submitted to them, that Lassiter had no right to hypothecate the bonds, which then, as defendant knew, belonged to the plaintiff, and were held in trust, and that three years did elapse before the cause of action accrued and before suit was brought as to some of the bonds, to-wit, those sold in 1875. The Court refused to give an instruction asked, that the statute was put in motion by what transpired between the president of the Bank and SCOTT v. BRYAN. Treasurer Battle, and in this there was error, for reasons already stated. We do not understand why the finding of the application of the bar to the claim for the bonds sold in 1875 is disregarded in the giving of final judment for all, but this could be rectified, if it were the only difficulty in the case, by reforming the judgment. We have not deemed it necessary to inquire into the measure of damages, nor to consider other interesting questions debated at the bar, as our opinion. the defence arising out of the lapse of time, renders it unnecessary. upon There is error, and there must be a new trial. Reversed. JOHN W. SCOTT v. ELIAS BRYAN. Parties Partnership-Pleading-Counter-claim. 1. Where four copartners joined in a note to purchase property for the partnership account, and after the dissolution of the firm, the plaintiff paid more than his proportion of the note, and brought suit against the defendant for contribution; It was held, that the other partners were not necessary parties where they were all insolvent, one of them dead with no representative, and another a non-resident of the State. 2. Where one partner pays more than his share towards a partnership debt, he can only recover from his copartner one half of the excess paid. 3. Although a counter-claim to a counter-claim is not allowed, yet when it is pleaded at an early stage of the action, and no objection is made to it, this Court will not strike it out when the action has been long pending, but will consider it as an amendment to the complaint. SCOTT v. BRYAN. CIVIL ACTION, heard before Clark, Judge, upon exceptions to the report of a referee, at May Term, 1886, of CHATHAM Superior Court. This case, commenced in 1872, and after repeated references and reports, and one appeal to this Court, (73 N. C., 582,) has been protracted, and is now before us for final adjudication, very much narrowed in its scope. The referee finds to be due the plaintiff, on March 16th, 1874, the sum of $1,307.53, in making up which amount is a charge of $2,000 for a debt belonging to the plaintiff, and used in paying off a judgment recovered by one Harris against the parties to this suit, in the Superior Court of New Hanover. The indebtedness thus reduced to judgment, consisted in three several notes, each for $1,050, made on January 1st, 1857, and payable with interest, at short intervals, and executed under seal by the plaintiff, the defendant and three others, I. S. Banks, L. A. Williams and W. P. Elliott. The notes were given in purchase of the steamer Enterprise, intended to be run on the joint account of the copartners, on the Cape Fear river, between Wilmington and Lockville. She was so run for a time without profit, and was finally burned and destroyed. The referee was ordered at Spring Term, 1879, to report the partnership account of the Steam-boat Company, and he reported that there was no such copartnership. Upon defendant's exception, the matter was recommitted, and the referee directed to ascertain whether such copartnership did not in fact exist; and at Spring Term, 1883, he reported that it was formed of the parties to the note in the year 1856 or 1857; and he was then required to take and state the partnership account. The referee failed to carry out the order, in consequence of the defendant's objection, that the other three members of the firm were not parties to the action. At Spring Term, 1883, the defendant's objection was overruled, |