came parties to the suit in the court in Lee county, and subject to the jurisdiction of that court, before that suit went to trial. At the trial of that suit, Wilcox and Angel were present and testified. Some of the Adrian parties at that trial defeated a claim made by Stone for several thousand dollars which he had expended, and which he asked to have refunded to him, and obtained the allowance of a claim for several thousand dollars upon a lien the assignees of the car company held, which was opposed by Stone. On September 9, 1878, the court in Lee county rendered a decree in that suit which determined that the Keokuk Company was liable to Stone for $514,177.45, and to others for $171,402.71, on account of the extension of the railroad to Clarksville, and its equipment; that all the bonds applicable to the 90 miles of railroad then constructed, to wit, $1,800,000 in amount, of the $2,700,000 secured by the mortgage, were pledged to secure these liabilities; and that each of the appellants, and all others who joined in the purchase under the master's sale of April 14, 1875, were the owners of such a proportion of the property of the Keokuk Company, subject to these liabilities and pledges, as the value of the bonds and liens and the cash each furnished to make the purchase bore to the entire purchase price. The fractional portion of this property to which each of these appellants was entitled was fixed in the decree, and the capital stock of the Keokuk Company was divided between the appellants and the other parties to that suit in accordance with the terms of this decree. The appellants received their respective shares of this stock, and no appeal has ever been taken from that decree, nor has it ever been modified. After the decree was rendered, Stone was still unable to sell the bonds, and the road to Clarksville was unable to earn much more than its operating expenses; and thereupon, as the agent of the railroad company, he proceeded to extend it to St. Peters, so that it might have a connection with St. Louis. In January, 1879, it was estimated that money to the amount of 50 per cent. of the face of the bonds would pay the debts of the company, and complete the road to St. Peters. For this purpose, pursuant to a resolution of the board of directors of the railroad company, Stone offered to each of the appellants and to each of the other stockholders of the company, at 50 per cent. of their face value, such a proportion of the bonds of the company as their stock respectively bore to the entire capital stock of the company, on condition that, if any of them failed to purchase within 30 days, their shares of these bonds would be offered to other stockholders at the same rate, and, if not at the time bought, they would be sold at not less than that rate to any purchasers that could be found. The appellants declined to purchase any of the bonds, and Stone and others of the stockholders did purchase all of them but about 125, which the company had previously disposed of in the settlement of a claim of one Fallon. They paid for these bonds an amount sufficient to pay the debts of the company and to complete the road to St. Peters, and this amount was more than 50 per cent. of the face value of the bonds. On December 14, 1880, the appellee Perkins made a contract to purchase from Stone and his associates, for the appellee the Chicago, Burling. ton & Quincy Railroad Company, a corporation, these bonds to the amount, in face value, of $2,585,000; and he subsequently bought of others, for the same company, bonds of the Keokuk Company to the amount of $114,000. Before he paid for any of these bonds he employed an attorney at law to examine their validity, and the security for them furnished by the mortgage. This attorney made an examination of the records of the Keokuk Company, and of the proceedings in the suit in the district court of Lee countv, and reported to him that the bonds were authorized and valid, and were secured by a first mortgage of $2,700,000 on the property of the company. After receiving this report, Perkins paid for the bonds. There is a dispute in the testimony regarding the notice he had of the claims of the appellants. Default was made in the payment of the interest on these bonds, and on July 7, 1887, a decree of foreclosure of the mortgage Securing them was rendered at the suit of the trustee, Eells, in the circuit court for the Southern district of Iowa, which declared that mortgage to be a first lien on the property of the Keokuk Company, and directed the sale thereof to pay the debts Secured by the mortgage. The appellants filed their bill in this case in September 1887. They had in 1881 brought a like suit, in which their bill was dismissed on the merits in the circuit court; and in the supreme court of the United States the decree of the circuit court was reversed, and their suit was dismissed, for want of jurisdiction. 121 U. S. 631, 7 Sup. Ct. 1010. In the bill in the case now before us they alleged that they had a lien on the property of the Keokuk Company superior to that of the $2,700,000 mortgage, and they sought an injunction to restrain the confirmation of the sale under the decree of foreclosure of July 7, 1887. Instead of contesting the application for an injunction, the appellee Perkins filed a bond in this suit, conditioned that he would pay the amount for which the courts should finally decree that the appellants had a Superior lien to that held by the owners of the bonds secured by the $2,700,000 mortgage, and no injunction was issued. The history of these railroad companies and their obligations has been long and tedious, but its review was necessary to a proper appreciation of the character of this suit. It is an application to a court of equity by a part of the purchasers of the property of the old Mississippi Valley & Western Railway Company at the master's sale in 1875, who furnished about 4 per cent. of the purchase price; who have never furnished a dollar to improve the property thus purchased; who, under the decree of the district court of Lee county, received the same proportionate share of the property purchased and improved that their copurchasers in like situation received; who were offered in 1879, and who refused to buy, the bonds of the purchasing company that extended the railroad, at a price less than their copurchasers were obliged to pay for them in order to defray the necessary expenses of completing and equipping the railroad,— to obtain a decree that they have a lien for the share of the purchase price they furnished in 1875, on the finished railroad, which was completed and equipped, at an expense exceeding $1,300,000, after their purchase, and on the faith and pledge of the $2,700,000 mortgage made by the new company, and that this lien of theirs is superior to that of the bonds secured by this mortgage in the hands of subsequent purchasers. On the face of it, the case does not appeal to the conscience of a chancellor with compelling force. It has the appearance of an attempt to reap the fruits of the labor of others, who bore the heat and burden of the day while the applicants rested supinely in the shade. The only parties in interest before this court in this case are the appellants and the appellees Perkins and the Burlington Railroad Company. The only question is whether or not the appellants were entitled to a lien on the property of the Keokuk Company superior to that of the bonds held by the appellees, and secured by the mortgage for $2,700,000. In the history of this case which we have given above, we have stated only the undisputed facts. If the case was to be determined upon these facts alone, there could be but one answer to this question. The appellants could not maintain their lien (1) because their contract of June 8, 1875, was the personal contract of Stone to the ef. fect that Eells, the trustee, would hold an amount of the notes secured by the $600,000 mortgage equal to the amount of cash they paid towards the purchase in 1875, as collateral security for the repayment of that money, and that promise created no lien on any of the notes; (2) because Stone was their agent to secure these notes, and to place them with Eells as collateral security for this money, and if he failed to do so, and caused the notes to be canceled and the mortgage to be discharged, they must suffer the consequence of the acts of their agent, and not the purchasers of securities, who had a right to rely on those acts; and (3) because the decree of the district court in Lee county, Iowa, in 1878, completely settled the liens, rights, and interests of these appellants, as against Stone and his associates, in the purchase and construction of the railroad, and the question now presented is res adjudicata, and cannot be again litigated by the appellants, either with Stone and his associates, or their privies, the appellees. The appellants seek to escape from this conclusion by allegations that are denied, and testimony that is contradicted. They claim that under the agreement of June 8, 1875, in which Stone promised them that Eells should hold a part of the $600,000 in notes as collateral security for the purchase money they supplied, under the terms of the sale by Stone to the Keokuk Company, which provided that the bonds and mortgage for $2,700,000 should be first used to pay and satisfy the $600,000 mortgage, and under the execution of the two mortgages, they acquired a first lien upon all the property of the Keokuk Company for the value of all the bonds, liens, and money they furnished to make the purchase, and that the holders of the bonds secured by the mortgage for $2,700,000 took their rights subject to this lien, because Eells discharged the $600,000 mortgage without payment and without authority, and because the mortgage for $2,700,000 was, by the terms of the sale to the Keokuk Company, to be first used to pay the $600,000 mortgage. Their witnesses testified that Stone and Edmunds, his attorney, told them in June, 1875, that the mortgage for $600,000 was to be made to secure the purchasers for the bonds, liens, and money they advanced for the purchase, and that Stone did not give the agreement of June 8, 1875, to enable them to borrow the $30,844.12 in money which they were to furnish, but solely to secure them for its repayment. On the other hand, Stone and his attorney testified that the agreement was given to them solely to enable them to borrow this money, and that the $600,000 mortgage was made, not to secure the repayment of the purchase price, but to obtain money to extend the railroad. They are corroborated by the testimony of Eells that he never heard of the contract of June 8, 1875, until after the $600,000 mortgage was discharged, and that he understood that that mortgage was made, not to secure the purchasers for the purchase price, but to raise money for construction purposes. The Written contract of June 8th recites that Wilcox and others desire to borrow the $30,844.12 cash they were to furnish, and that Stone makes the agreement to enable them to do so, and in it Stone promises that Eells will hold an equal amount of the notes to be secured by the $600,000 mortgage, not to secure the repayment of the value of the bonds, liens, and cash they were to furnish, but to secure the repayment of the cash only. If, as appellants witnesses testify, the Adrian parties did not declare to Stone and his attorney that they desired to borrow this money; if all parties, including Eells, the trustee, knew that this $600,000 mortgage was to be, and that it was, issued to secure these purchasers for the value of all they furnished, including bonds, liens, and cash,—it is incredible that Stone should have made, and that these appellants should have accepted, an agreement which recites that they want to borrow the money they are to furnish, that the agreement is made to enable them to do so, and which promises them collateral security, from the $600,000 in notes, for the repayment of the money they furnished only, and, by the strongest implication, excludes them from any security under that mortgage for the value of the bonds and liens they supplied. On the issue as to the purpose for which the mortgage for $600,000 was made, the written evidence is equally decisive. The terms of the sale by Stone, the agent of the purchasers and the holder of the title, to the Keokuk Company, which the purchasers formed and owned, were in writing, and are before us. That contract provided that the two mortgages,—one for $600,000, and the other for $2,700,000,—and the notes and bonds they were to secure, should be made by the Keokuk Company; that the bonds secured by the latter mortgage should be used first to pay off and satisfy the former mortgage; that all these notes and bonds secured by both mortgages should be placed in the hands of Eells, as trustee, and should be sold and disposed of as Stone should direct; and that the proceeds thereof should be used in the construction of the incomplete railroad, until it was completed. The conclusion from these writings is irresistible that the mortgage for $600,000 was made for construction purposes, and not to secure the repayment of the purchase money, and that the agreement made by Stone on June 8, 1875, with the Adrian parties, 1-3

was a mere personal contract of his, made to enable them to borrow the money they were to furnish, and that it could have no effect upon the securities issued by the Keokuk Company, unless it was executed. The fact is undisputed that the Adrian parties never borrowed any of this money, and that they themselves furnished it. Stone never caused Eells to hold any of the $600,000 in notes as collateral security for the repayment of this money, and never notified Eells that he agreed to do so. The agreement of Stone accordingly created no lien upon any of the notes or bonds issued by the Keokuk Company, and if it was broken the remedy of the appellants was an action against Stone for the breach. It is an established fact in this case that none of the notes secured by the mortgage for $600,000 were used or sold for purposes of construction or equipment of the railroad, and that by direction of Stone, the financial agent of the company that made them, the notes were canceled, and the mortgage was discharged by Eells, the trustee. It is contended that this action was without authority. It may be conceded that, if the notes secured by this mortgage had been sold or pledged, the trustee would not have been authorized to discharge the mortgage without the consent of the holders of the notes. But, until they were pledged or sold, Eells, the trustee, held them as the agent of their maker alone, and he was authorized and bound to dispose of them as that maker directed. Before they were sold, pledged, or used in any way, the maker of the notes, through its financial agent, Stone, directed Eells to cancel the former and to discharge the latter. In our opinion, this not only gave him the power, but imposed upon him the duty, to do so. Moreover, as there never was any debt secured by the mortgage for $600,000 to pay or to satisfy, none of the bonds secured by the mortgage for $2,700,000 were required to be used first, or at all, for the purpose of satisfying any such debt, and there was no lien on the property of the Keokuk Company superior to that of the holders of these bonds. A more conclusive answer to the claim of the appellants, if that were possible, is found in the decree of the district court of Lee county rendered in 1878. Stone brought that suit to settle all questions relating to the liens and interests of ail parties interested under the original purchase, and of all who had furnished money or materials on pledges of the bonds of the Keokuk Company. All of the appellants in this suit were parties to that suit. The appellant Wilcox verified one of the answers to the bill, was one of the complainants in the cross bill, and with Angel, the other active representative of the appellants, attended and testified at the trial. Stone's petition contained an allegation that the mortgage for $600,000 had been made, that it had not been used, and that it had been discharged. It set forth all the debts of the Keokuk Company, and stated What bonds were pledged to secure them. It stated in detail the value of the liens and bonds and the amount of the money furnished by each of the purchasers to buy the property at the master's sale. It prayed that the interests of all the parties to the suit in the property of the company might be determined; that all of is assets might be distributed among them according to their re

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