NOTES IN THIS VOLUME Page Abandonment or Failure of Purpose of Subscription and Effect 7 Ratification by Municipal Corporations of Unauthorized or Illegal 86 Executive Construction as Aid to Construction of Statutes by 223 Suits by United States to Cancel Patents to Public Lands...... 305 Enforcement of Foreign Decree or Order for Alimony and Disposition of Property in Suit for Divorce.. Alienation of Indian Lands.... ... 457 572 CASES ARGUED AND DETERMINED IN THE UNITED STATES CIRCUIT COURTS OF APPEALS (224 Fed. 913) OLD COLONY TRUST CO. v. WICKARD BROS. FORT DODGE, D. M. & S. R. CO. v. SAME. Nos. 4128, 4180. SUBSCRIPTIONS 19-RAILROADS-DISCONTINUANCE OF LINE-RECOVERY OF DONATIONS UNDER IOWA STATUTE. * Code, Iowa, 1897, §§ 2092, 2094, provide that a court may authorize a railroad company to change or remove the line of its constructed road, but that such change or removal of a line shall not be made without repayment of "all moneys which were donated to the company building the same exclusively in consideration of said railroad being located and constructed on such line." Held, that to entitle persons to recover under such provisions on the discontinuance of a line of road, there must be substantial evidence that the money was paid to the company which built the road, and that it was given and received as a donation, and exclusively in consideration of the location and building of the road where it was. * For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 139 C.C.A.-1 *See note at end of case. Appeal from the District Court of the United States for the Southern District of Iowa; Smith McPherson, Judge. Suit in equity by Old Colony Trust Company, of Boston, Mass., and others against the Ft. Dodge, Des Moines & Southern Railroad Company, Wickard Bros., and about 150 others, interveners. From provisions in the decree in favor of interveners, complainants and the Railroad Company appeal. Modified. James C. Davis, of Des Moines, Iowa, for appellant Old Colony Trust Co. S. R. Dyer, of Boone, Iowa, for appellant Ft. Dodge, D. M. & S. R. Co. O. C. Meredith, of Newton, Iowa, for appellees: Before SANBORN and CARLAND, Circuit Judges, and AMIDON, District Judge. SANBORN, Circuit Judge. These are appeals from the decree of foreclosure of the mortgage of the Ft. Dodge, Des Moines & Southern Railroad Company to the Old Colony Trust Company rendered September 15, 1913. They do not assail the general terms of that decree, but they challenge those portions thereof which require the payment to Wickard Bros. and others, interveners in the foreclosure suit, and appellees here, of the sum of $2,450 on account of certain alleged donations they claimed to have made to the Newton & Northwestern Railroad Company, a corporation, which about the year 1904 constructed about 100 miles of railroad from Rockwell City in Calhoun county, Iowa, by way of Des Moines Junction, to Goddard and Newton in that state. About the year 1908 a mortgage made by the Newton & Northwestern Railroad Company, which had become insolvent, was foreclosed and under the foreclosure the Ft. Dodge, Des Moines & Southern Railroad Company became the owner of the railroad constructed by the former company. On June 4, 1910, the Old Colony Trust Company commenced a suit for the foreclosure of its mortgage of $3,500,000 on the property of the Ft. Dodge Company, receivers were appointed, and the suit culminated in the decree of foreclosure from which these appeals were taken. During the pendency of that suit the court below, on December 7, 1912, on the petition of the receivers, rendered a decree that they should abandon that portion of the railroad 27 miles in length between Des Moines Junction and Goddard, that they should sell the salvage thereof, and that they should also sell the 14 miles of the railroad extending from Newton by way of Goddard to Colfax. An appeal from that decree was taken to this court, where it was affirmed. Reference is made to the report, statement, and opinion in that case for a map of the railroad and a more extended history than it is thought necessary to set forth here. State of Iowa v. Óld Colony Trust Co., 215 Fed. 307, 311, 313, 314, 131 C. C. A. 581, 585, 587, 588, L. R. A. 1915A, 549. After the decree of abandonment of the 27 miles and of the separate sale of the 14 miles of the railroad had been rendered, Wickard 3 Bros. and others filed a petition of intervention in the foreclosure suit, in which they alleged that they donated to the Newton & Northwestern Railroad Company sums of money aggregating about $2,450 at the time the railroad from Rockwell City to Newton was constructed, that those sums were used in the construction of that railroad at the request of representatives of that railroad and in reliance upon their assurances that a line of railroad would be built and permanently operated between Rockwell and Newton. In answer to this petition the Old Colony Trust Company pleaded its mortgage from the Ft. Dodge Company, alleged that this mortgage was a first lien on all the property of that company, and denied any knowledge or notice of the alleged donations. The Ft. Dodge Company made a similar answer. The petition of the interveners is founded on these provisions of the statutes of Iowa: "Any railroad desiring to change or remove the line of its road, after the same has been permanently located and constructed, may file a petition in the district court in any county wherein the change or removal is proposed to be made, describing with reasonable accuracy that portion of its line which it seeks to have changed or removed, and asking the court to grant authority to make such change or removal." Code of Iowa 1897, § 2092. "No railway company shall be allowed to change or remove its line of road, after a permanent location and construction, without repaying all moneys, and restoring all property, or its value, which were donated to the company building the same exclusively in consideration of said railroads being located and constructed on such line, to the parties donating the same, their heirs or assigns." Section 2094. Evidence was introduced, a final hearing was had, and the court. inserted in subdivision 11 of paragraph 10 of the decree of foreclosure provisions to the effect: (a) That if the 14 miles of railroad from Newton to Colfax should be dismantled, or if it should not be operated by September 15, 1914, $2,457.50 should be paid to the interveners; and (b) that in selling this part of the railroad $2,457.50 should be deposited in the registry of the court for the interveners as a condition of the confirmation of the sale, and it inserted in section 6 of paragraph twenty-fifth of the foreclosure decree a provision that out of the proceeds of the sale of the other parts of the property of the Ft. Dodge Company nothing should be paid on the debt secured by its mortgage to the Old Colony Trust Company or on certain other claims until the $2,457.50 had first been paid to the interveners. Counsel for the Old Colony Company and for the Ft. Dodge Company challenge these provisions of the decree on the grounds: (1) That the evidence fails to prove the facts essential to the right of the interveners under the statute to the repayment of any moneys; (2) that no proceedings have ever been taken for the abandonment of the 14 miles of railroad between Colfax and Newton; (3) that the abandonment of the 27 miles of railroad from Des Moines Junction to Goddard pursuant to the decree of the court in the foreclosure suit because under the general principles and practice in equity its farther operation was inequitable and inexpedient, was not a proceeding under the statutes, nor of the nature of such a proceeding, and therefore entitled the interveners to no repayment; and (4) that the lien of the mortgage to the Old Colony Trust Company is superior in equity to the claim of the interveners. There The interveners demand the repayment of moneys under section 2094 as a condition of the change or removal by the Ft. Dodge Company of a portion of its line of railroad. It is, however, moneys "which were donated: (1) To the company building the same (the railroad); (2) exclusively in consideration of said railroad being located and constructed on such line," and such moneys only that may be repaid under this statute. The petition of the interveners alleges that they donated their money to the Newton & Northwestern Railroad Company. This averment is denied by the answers. were only two witnesses in the case. C. F. Morgan, a merchant, who was president of the Commercial Club or Business Men's Association of Newton in the years 1902, 1903, and 1904, testified that Hamilton Brown called on him in January, 1903, "and said they were contemplating building a road, as I remember it, to either Oskaloosa or Newton," and he wanted to know if the citizens of Newton would contribute something to secure the coming of the road to Newton; that he wanted $3,000; that Mr. Hindorff collected about $2,500, and caused a draft to be issued on July 1, 1904, for $2,457.50 which he "signed over to Hamilton Brown," and sent to him. On cross-examination he testified that there was a written subscription, setting out the terms and conditions under which this money was subscribed, which was circulated around, but that he did not know where it was unless the bank had it; that the point the people of Newton were anxious for was that the railroad should run into Newton; that he did not recall what company constructed the road, whether it was a construction company or a railroad company; that all he knew about it was that the people of Newton contributed $2,500 to Hamilton Brown; and that the impression was that Hamilton Brown was the construction man, or the man who did construct the railroad, or was the general manager of construction, but that he knew nothing about that personally. A. E. Hindorff testified that he was not interested personally in the subscription; that he did not know what became of the original subscription paper; that his understanding is that it was turned back to Mr. Morgan, or the officers of the association; that a paper which he presented and introduced in evidence contained a list of collections which he made for the benefit and construction of the Newton & Northwestern Railroad Company; that he was hired and paid $50 for making the collection; that he was assistant cashier of the Jasper County Savings Bank at the time he made this collection, and was cashier of that bank when he testified; that on July 1, 1904, he issued a draft No. 113,238 on the Commercial National Bank of Chicago issued by the Jasper County Bank of Newton for $2,457.50, payable to the order of C. F. Morgan; that that draft was cashed on the Commercial National Bank of Chicago by Hamilton Brown; that the draft came back from Chicago to the Jasper County Bank; that he turned it over to J. C. Cross; that J. C. Cross was at one time secretary of the Commercial Association, and when he testified was an attorney in Newton; that he had made search to ascertain the whereabouts of the |