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clusions reached upon other questions, they aeed not be examined. Decree affirmed.

(141 U. S. 475)

LEADVILLE COAL CO. et al. v. MCCREERY et al.

(November 9, 1891.)

JURISDICTION OF STATE AND FEDERAL COURTSPROPERTY IN HANDS OF RECEIVER-DISSOLUTION OF CORPORATIONS-DECREE-Failure to PROVE CLAIMS.

1. When a receiver appointed by a federal court takes possession of the property of a business corporation, and thereafter the court renders a decree ascertaining the sums due each creditor who has appeared and proved his claim, and directing a sale of the property, the fact that, pending an appeal from this decree, a court of the state which created the corporation, in a suit commenced after the bill was filed in the federal court, declares the corporation dissolved, and appoints a receiver to wind up its affairs, does not divest the federal court of jurisdiction to proceed with the execution of its decree, and effect a complete settlement of the corporation's

affairs.

2. When, in a suit against a business corporation, a receiver is appointed, and due notice given to all creditors to appear and prove their claims, a creditor who fails to appear until after final decree and order of sale, and gives no excuse for such failure, is concluded, and there is no ground for contending that the decree as to him is merely interlocutory.

44 Fed. Rep. 539, affirmed.

Appeal from the circuit court of the United States for the northern district of Ohio.

Bill by the Lake Superior Iron Company against Brown, Bonnell & Co., a corporation organized under the laws of Ohio, for the appointment of a receiver and the sale of its property. Heard below on exceptions to the master's report and on motion to confirm the sale. Decree of confirmation. 44 Fed. Rep. 539. The Leadville Coal Company and Charles S. Worden, creditors, and George M. Ayer and Amy G. Ayer, stockholders, appeal. Affirmed.

STATEMENT BY BREWER, J. The facts in this case are these: On February 21, 1883, a suit was commenced in the circuit court of the United States for the northern district of Ohio, by the Lake Superior Iron Company and others against Brown, Bonnell & Co., a corporation having large and extensive iron-works. A receiver was then appointed, who took possession of the property of the company; and such proceedings were thereafter had that in Feb-❘ ruary, 1886, a decree was entered ascertaining the claims of each creditor who had appeared and proved his claim, 176 in number, and directing a sale of the property. From that decree the defendant appealed to this court. On the hearing of the appeal the decree was affirmed, (Brown v. Iron Co., 134 U. S. 530, 10 Sup. Ct. Rep. 604,) and a mandate sent to the court below directing it to carry the decree into execution. An order of sale was thereafter issued, and the property sold, and purchased by the present appellees, acting as trustees for all the creditors who chose to enter into a proposed new corporation; and into such corporation nearly all the creditors, over 96 per cent. in amount, entered. On the coming in of the

report of the master, a decree was entered confirming the sale, (44 Fed. Rep. 539;) from which decree these appellants have taken this appeal. Two of the appellants. the Leadville Coal Company and Charles S. Worden, claimed to have been creditors of Brown, Bonnell & Co., and the other two to have been stockholders in that corporation.

Henry Crawford, for appellants. C. C. Baldwin and C. D. Hine, for appellees.

BREWER, J. The first contention of appellants is that by proper proceedings in the court of common pleas of Mahoning county, Ohio, the corporation defendant, Brown, Bonnell & Co., had been, on July 12, 1889, after the original decree in the circuit court of the United States, and before the hearing of the appeal by this court, judicially dissolved, and one Hallett K. Taylor appointed receiver, and charged with the statutory duties of holding, managing, and disposing of all the corporate assets, and distributing them among creditors; and that thereafter the circuit court of the United States ought not to have proceeded further, but should have turned the property over to such statutory receiver, in order that the property might be distributed under the direction of the state court. The argument is that the judicial decree of dissolution of the corporation, the sole defendant, was equivalent to the death of an individual defendant; and that all subsequent proceedings in reference to the disposition of the property and assets of this deceased defendant must be had according to the laws and in the courts of the state creating the corpora. tion. It is worthy of notice that the case in which the decree of dissolution was entered was not commenced till long after this suit was begun and the receiver had taken possession of the property; that the receiver thus appointed by the state court does not himself come into this court and ask possession of this property; and also that the state court, in its decree of dissolution, expressly recognized the possession of the United States court, and in the following words declined to interfere therewith: "But inasmuch as it appears to the court that the estate and effects of said Brown, Bonnell & Co. are at the present time in the hands of a receiver appointed by and acting under the orders of the circuit court of the United States for the northern district of Ohio, it is ordered that the receiver hereby appointed shall not interfere with the possession of the receiver appointed by said federal court of the effects and assets of said corporation." But we do not care to rest our conclusion on these circumstances. The circuit court takes its jurisdiction, not from the state of Ohio, but from the United States; and the extent of its jurisdiction is not determined by the laws of the state, but by those of the United States. Doubtless, while sitting in the state as a court of the United States, it accepts and gives effect to the laws of the state so far as they do not affect its jurisdiction and the rights of nonresident creditors. It nevertheless exercises powers independent of the laws of the state; and when, in pursuance of the

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jurisdiction conferred by the laws of the United States, it takes possession of the property of a defendant and proceeds to final decree, determining the rights of all parties to that property, its decree is not superseded and its jurisdiction ended by reason of subsequent proceedings in the courts of the state, looking to an administration of that property in accordance with the laws of the state. It would be an anomaly in legal proceedings if, after a court with full jurisdiction over property in its possession has finally determined all rights to that property, subsequent proceedings in a court of another jurisdiction could annul such decree, and disturb all rights once definitely determined. No such anomaly exists in the relative jurisdiction of state and federal courts. The latter, having once acquired full jurisdiction, and proceeded to a final determination, may rightfully proceed still further, and to an execution of that decree, irrespective of any proceedings in the courts of the state. The first and principal contention of the appellants must therefore be overruled.

Secondly, it is insisted that the circuit court erred in refusing to allow a contest of the adjudication of the rights of creditors made in its final decree, on the subsequently filed petition of these appellants; and also that it refused to allow the claim of one of these appellants, who now insists that he is a creditor and entitled to share in the proceeds of the sale. In the proceedings anterior to the final decree, it appears that notice was given to all creditors to prove their claims, and that this particular creditor had notice of those proceedings, but failed to make proof of his right. It is now insisted that the decree in respect to these several claims was merely interlocutory, and that the matter is open to further and subsequent inquiry. There is no pretense of want of notice, or ignorance of the proceedings, and no excuse given for failing to litigate all these matters when before the court prior to the decree. Under such circumstances we dissent entirely from the contention that this decree was, as to these matters, merely an interlocutory order. That decree determined the rights of all parties interested in the proceeds of this property, and if any one of these appellants after notice failed to assert his rights or to challenge the allowances then made by the court, his rights and challenge were lost. He has had his day in court, and is concluded by the final decree.

The final contention is that there were certain irregularities in the sale, and those irregularities are sought to be established principally by the affidavits of counsel for appellants, based upon bearsay testimony. So far as such affidavits rest on hearsay testimony, it is enough to say that they prove nothing; and, in so far as they refer to other matters, it is also enough to say that we see no substantial error in the proceedings of the sale. The defendant is not now contesting the sale, and, so far as any trifling matters are concerned, it does not lie in the mouth of these alleged creditors and stockholders to challenge the regularity of the proceedings. Indeed, we cannot fail to observe that the main

scope and purpose of this appeal seem to be to relitigate questions fully determined by the final decree appealed from and affirmed. We see no error in the record, and the decree of the circuit court is affirmed.

BRADLEY and GRAY, JJ., did not hear the argument or take part in the decision of this case.

(141 U. S. 429)

MCLEAN et al. v. CLAPP et al.

(November 2, 1891.)

MORTGAGES-DISCHARGE BY SETTLEMENT-RESCISSION OF CONTRACT.

1. A purchaser of lands from the government, being indebted to his two brothers, caused the patents to be issued in their names. After paying the debt, he caused them to convey the legal title to a third brother, in order that the latter might mortgage it to secure certain notes given by him, which was done. After maturity of these notes a foreclosure suit was commenced, but the mortgagor and mortgagee effected a settlement by which the notes were surrendered, and notes of other parties secured by conveyances of other lands accepted in their stead. The suit was then dismissed, but the mortgage was not formally canceled. The brother who originally purchased the lands remained in possession all the time, which fact was known to the mortgagee. Held that, as the mortgagor held only the naked legal title, a subsequent agreement by him to rescind the settlement could not operate to again set up the lien of the mortgage, as against this brother and subsequent purchas ers from him.

2. One who has accepted conveyances of certain lands in settlement of a prior indebtedness cannot afterwards set up a repudiation of the settlement on the ground of fraud, when it appears that, subsequent to the alleged repudiation, he made conveyances of part of the lands, and that he is still in possession and collecting rents from the remainder.

Appeal from the circuit court of the United States for the northern district of Illinois.

Suit to set aside a settlement and foreclose a mortgage brought by Julia H. McLean and George E. McLean against Ruggles W. Clapp, Abigail L. Haskell, Sarah A. Clapp, administratrix, and Fletcher D. Clapp, Eva K. Mink, and Mary L. Shaw, heirs at law of Henry Clapp, deceased, William E. Ives, Jeremiah Tondrew, and others. Affirmed.

Edwin B. Smith, for appellants. Sherwood Dixon and S. H. Bethea, for appellees.

*BREWER, J. In December, 1855, Edwin W. McLean, owning a store and stock of goods in Amboy, Ill., sold the same to Ruggles W. Clapp, in payment for which he received four notes, amounting in the aggregate to $5,918.66, drawing 10 per cent. interest, and secured by mortgage on 480 acres of land. The first of these notes, for $500, due in 25 days, was paid; the others were not. The last of the notes became due in May, 1857. Soon thereafter suit was commenced in the state court on them, and to foreclose the mortgage. In this suit the defense of usury was pleaded. A settlement was made with Clapp, in pursuance of which the three unpaid notes were surrendered; and in lieu there. of there was taken a draft for $1.000, drawn

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on his brother, Alfred Clapp, of New York city; and eleven notes, five for $200 each, dated June 10, 1857, made by William Jones to Ruggles W. Clapp, three made by Cyrus Craig, November 29, 1856, to Ruggles W Clapp, two for $1,000 each, and one for $1,400; and three made by Curtis Cannon, August 1, 1857, to Ruggles W. Clapp, for $433.33 each. These notes were all indorsed "Without recourse, "and were nominally, at least, secured by conveyances of real estate. Also, to secure the draft, on which only $250 was ever paid, a conveyance was made of a lot and building in the town of Amboy. There was no formal release of the mortgage, but the suit to foreclose was dismissed. This settlement was consummated some time in the latter part of 1857, or the fore part of 1858; and was consummated on the part of McLean by W. E. Ives, his attorney at Amboy, McLean himself having moved after the sale of the store to Great Barrington, Mass., though it is claimed by the defendants that the terms of the settlement were agreed upon between McLean and Clapp in the summer of 1857, when McLean was on a visit to Amboy. In the summer of 1861, McLean, dissatisfied with the conduct of Ives as his attorney, discharged him, and placed his business in the hands of one M. L. Arnold. While Arnold testified that in the same summer he notified Clapp that McLean repudiated the settlement, nothing was in fact done looking towards a repudiation until May, 1872, when this suit was commenced in the circuit court of the United States, by McLean, to set aside the settlement, and foreclose the mortgage, as though it still remained security for the orignal notes. Answers were filed, and some preliminary steps taken in the case during one year, and up to May, 1873. From that time no order was made or proceedings had in the case until July, 1882, when it was dismissed for want of prosecution. In the November following the order of dismissal was set aside and the case reinstated, and leave given to file a bill of revivor in the name of the widow and heirs of McLean, who had died in 1875. The case thereafter proceeded regularly till May, 1887, when, upon final hearing, the bill was dismissed. The contentions of defendants are substantially-First, that McLean himself arranged the terms of the settlement of 1857; that he did this understandingly, and without any fraud or misrepresentations on the part of Clapp, and hence cannot now repudiate it; secondly, that, if he did not himself arrange such terms, he was in 1861 fully informed of the character and value of the paper and securities received by his agent in the settle. ment, and that with such full information he thereafter acquiesced in and ratified it; and, thirdly, that his laches and delay in asserting his rights forbid any recovery against the present holders of the property conveyed by the original mortgage.

We notice only the second of these contentions. If the settlement by which the original notes were surrendered was made under such circumstances that McLean had a right to repudiate it, it was his duty to do so as soon as advised of all the cir

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cumstances justifying such repudiation; and he also must have repudiated it in toto. The settlement was a new contract between him and Clapp, and the law is clear that he cannot take the benefits of that contract and repudiate its burdens. The rule is thus stated by this court in the case of Grymes v. Sanders, 93 U. S. 55, 62: Where a party desires to rescind upon the ground of mistake or fraud, he must, upon the discovery of the facts, at once announce his purpose and adhere to it. If he be silent, and continue to treat the property as his own, he will be held to have waived the objection, and will be conclusively bound by the contract, as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsisted. These remarks are peculiarly applicable to speculative property like that here in question, which is liable to large and constant fluctuations in value. Thomas v. Bartow, 48 N. Y. 200; Flint v. Woodin, 9 Hare, 622; Jennings v. Broughton, 5 De Gex, M. & G. 139; Lloyd v. Brewster, 4 Paige, 537; Railroad Co. v. Row, 24 Wend. 74; Minturn v. Main, 7 N. Y. 220; 7 Rob. Pr. c. 25, § 2, p. 432; Campbell v. Fleming, 1 Adol. & E. 41; Sugd. Vend. (14th Ed.) 335; Diman v. Railroad Co., 5 R. I. 130.”

If McLean did not himself arrange the terms of this settlement, if he was not at the time it was made fully informed of the character and value of the securities taken in exchange, he did become so fully informed in 1861, when he visited Amboy, and, discharging Ives, transferred his affairs to the control of Arnold. This appears distinctly from his own testimony. Now, if he desired to rescind his contract, his duty was at once to return what he had received, and repudiate wholly and forever: the transaction. So far from doing this, he did exactly the contrary; he retained' all the notes and securities received under the settlement, and has never yet returned one of them. He took and held possession of all the real estate. As late as March 12, 1868, he conveyed a part of it to Cephas Clapp for $850. In November, 1867, he deeded to his agent Arnold another tract for $150. It is true that Arnold testifies that he was to have this land to help him pay the expense of prosecuting this suit if unsuccessful, and that he was to hold it so as to tender it back to the defendants if successful. The letters, however, which accompanied this transaction, indicate that it was an absolute sale, with no such conditions; and it appears, also, that a note of $150 was sent by Arnold to McLean in payment for the land. Further, he collected rent for the building in Amboy, which was conveyed to him as security for the draft, until it burned down, in 1865. He also paid taxes on other tracts of land conveyed in this settlement, and collected rents therefrom-some rent being collected by Mr. Arnold for the benefit of the present complainants, as late as 1881 and 1882-after McLean's death and the commencement of this suit. So, even if we credit the testimony of his agent, that in 1861 he notified Clapp of an intent to rescind, (and Mr. Arnold's integrity as

a witness is strongly impeached by many witnesses,) still the conduct of McLean in reference to the property for a series of years, long after 1861, is &t variance with the idea of rescission, and was plainly a ratification of that settlement, and brings the case clearly within the rule laid down by this court in the case just cited. He acted as owner, and assumed all the rights and burdens of ownership. He became owner only through that settlement. His conduct, after full knowledge, ratified and affirmed the settlement, and by it the original notes were paid, and the lien of the mortgage in fact discharged.

Were this all that appeared in the case, there would be nothing rising to the dignity of a question. But it is said-and this is the strong point made by the complainants in this respect-that in 1883 Ruggles W. Clapp consented to a rescission, and directed McLean to do just what he did in reference to this property; that at that time Lot Chadwick, the ancestor of those defendants who are making the contest, had acquired no interest in the realty, but the title stood as it did when the mortgage was given; that the mortgagor and mortgagee bad a right to rescind that settlement, and authorize the latter to do just what he did with the property conveyed in the settlement without prejudice to the continuance of the lien of the mortgage; and that, as the latter was never in form released, Chadwick purchased with full notice. The consent of Ruggles W. Clapp to this arrangement is evidenced, as is claimed, by two letters, as follows: "New York City, May 15th, 1863. M. L. Arnold, Amboy, Ill.Dear Sir: Your letter of 20th ult. is received, and contents noted. About those notes and securities left in your hands by McLean, you write that they are worthless, or nearly so. I think something can be made off from them. You sell them, and make the most you can; apply on mortgage I gave McLean. Any arrangement you can make with my brother Henry to compromise the matter will be satisfactory to me. I have some land in Whiteside county which I would like to let you have. I cannot now say when I will be in Amboy; will try and see you when I am there again. If you compromise the matter with Henry, have McLean release the mortgage from record. Yours, truly, R. W. CLAPP. Fountain Hotel, Eighth Street, Baltimore, Md., June 20th, 1863. M. L. Arnold-Dear Sir: Your favor of 10th inst. I received at Washington. In reply, I would say that I wrote you from New York about the middle of last month, giving you full particulars how to proceed. I think it would be well to sell the Craig property, get the most you can, and apply on the McLean mortgage. The notes, you say, are worthless, or nearly so, except what can be made off the Craig property. I see no other way for you to do in the case but to make what you can out of the securities, and apply on mortgage, and fall back on the land to make up deficiency. I think it would be well for you to see my brother Henry again, and see if you can in any way effect a compromise. He has written to me recently stat

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ing that you had been to see him, and had offered to settle for fifty cents on the dollar, but that you had effected no settlement, although he thought he would be able to do so. As I wrote in my last, do the best you can, and any compromise you can make with Henry will be satisfactory to me. I want the matter closed up. I remain, respectfully, yours, R. W. CLAPP."

It is urged by defendants that these letters were not written on the dates they bear, but long after Lot Chadwick had acquired his interest in the realty, and for the purposes of bolstering up this suit; and there is some reason to believe that their contention is correct. But we do not deem it necessary to rest upon this, and for reasons which will become apparent when other facts disclosed by the record are stated. Preliminary thereto it may be well to notice that these letters do not in terms either propose or assent to a rescission of the settlement. It is true that may be implied from the direction to sell the securities and apply on the mortgage; but each letter refers the matter of settlement to his brother Henry,-suggests compromise with him,-and in advance assents to any arrangement that may be made with Henry. If Ruggles W. Clapp was the only party interested in the property mortgaged, the letters might fairly be construed as a consent to the rescission and a reinstatement of full liability under the original mortgage; but the language is that of one who felt that he had no interest in the property, and was willing that the mortgagee should do whatever he could to secure full payment, with all the time a clear reference to his brother Henry as the party really interested. Now, it appears from the record, that in 1852 or 1853 Henry Clapp bought these lands from the government; built a house thereon, and entered into occupation of them; and remained in open and notorious occupation of them until 1869, the time he sold them to Lot Chadwick. Because he was in some financial embarrassment, and because he had borrowed money of Edwin and Jason Clapp, he caused the patents to be issued in their names, they holding the legal title as security for the money they had advanced. In 1855, Ruggles W. Clapp proposed to purchase the store and stock of goods referred to from McLean, for the joint benefit of himself and his brother Henry, and, in order to furnish security for this purchase, Henry caused Jason and Edwin to deed the lands to Ruggles, in order that he might execute this mortgage to McLean. Prior to this conveyance the claim of Edwin and Jason had been paid, so that the legal title was placed in Ruggles simply for the purpose of the mortgage, the equitable title remaining in Henry; and as he was living on the place, and in full, exclusive, and open possession, notice of his equitable interest in the property was thereby given to McLean, as to every one else. Landes v. Brant, 10 How. 348; Lea v. Copper Co., 21 How. 493; Noyes v. Hall, 97 U. S. 34, the latter an Illinois case. Ruggles never had any equitable interest in the property. He took the legal title simply

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as a condult, through which the mortgage lien might pass. When, therefore, by the settlement, the notes were paid and surrendered, Ruggles held only the naked legal title, with no power to further incumber the land for any purpose. These letters of Ruggles, if written on the dates they bear, were not written until two years after McLean had full knowledge of the character and value of the securities, and when, by his conduct in retaining possession, paying taxes, and receiving rents, he had ratified and approved the settlement. Ruggles W. Clapp could not then, even if he were ever so much disposed, by any arrangement with McLean, replace an incumbrance on the real estate. He might bind himself, but he could not bind Henry, nor burden Henry's full, unincun. bered, though only equitable, title to the property. In January, 1861, Ruggles W. Clapp quitclaimed the land to Henry, and in March, 1869, Henry deeded to Lot Chad. wick, whose heirs are the real defendants here, and in whom the legal title now rests.

road was built by the W. C. Co., under a con. tract by which it received all the railroad company's stock. The C. Co. also made a contract with the St. L. Co. to build the same road, for which it was to receive stock and bonds of the St. L. Co. After the Frankfort road was completed, and its stock delivered to the C. Co., in whose hands it was about to be attached by subcontractors, the St. L. Co., to prevent such stock passing to hostile parties, resulting in that company's loss of control over an integral portion of its line, gave its own notes to such subcontractor for their claims, upon payment of which the Frankfort stock was to be delivered to it. Held that, though the St. L. Co. had not the legal title to the Frankfort road, there was an equitable lien thereon in favor of bondholders secured by mortgage on the whole of the St. L. Co.'s line, including that road.

2. This stock was pledged for the payment of the notes, and on default of payment, when the stock was about to be sold, the court, on petition of its receiver theretofore appointed for the St. L. Co., directed the issue of receiver's certificates for the subcontractor's claims, on condition of the release of the pledged stock, which certificates were to be a first lien on the whole line. The first mortgage bondholders, by their trustees, were parties to this proceeding. Afterwards, on foreclosure of the mortgages, these certificates were directed to be first paid out of the proceeds of sale. Held, that the bondholders, having failed to appeal from this decree, and having purchased the road under it, are estopped to deny the priority of the receiver's certificates.

Appeal from the circuit court of the United States for the district of Indiana.

*Summing up this matter, it appears that this alleged rescission by consent was made five or six years after the settlement, and two years after McLean had been fully informed of all the circumstances which justified a rescission; and after he, with full knowledge, had ratified and affirmed it. Under those circumstances, though binding upon Ruggles W. Clapp, the party consenting thereto, it was not binding upon others who did not consent; and especially not on Henry Clapp, the owner of the full equitable title, who neither knew of nor consented to this rescission. After the lien had once been discharged, under such circumstances that it was beyond the recall of the mortgagee, no act or consent of Ruggles W. Clapp, the mortgagor, could renew the incumbrance upon the lands. Henry Clapp's full equitable title was therefore not disturbed or incumbered by this alleged voluntary rescission. Our conclusion, therefore, is that the decree of the circuit court was right, and must be affirmed. It may also be a question wheth-firmed. er the delay and laches in bringing this suit would not bar a recovery; but we do not care to enter into any consideration of this question, as the equity of the matter we have considered is clear. Decree affirmed.

The CHIEF JUSTICE, Mr. Justice BRADLEY, and Mr. Justice GRAY did not hear the argument nor take part in the decision of this case.

(141 U. S. 491)

KNEELAND v. LUCE et al.

(November 9, 1891.)

RAILROAD COMPANIES

FORECLOSURE OF MORTGAGES- PRIORITY OF RECEIVER'S CERTIFICATES -EQUITABLE LIEN OF Bondholders.

1. The T., C. & St. L. R. Co. was formed by the consolidation of several local railroad companies engaged in constructing roads from Kokomo, Ind., to East St. Louis, Ill.; but one company, the F. & S. Line,-which formed a link in the continuous line between those points, was allowed to maintain its separate organization until completed, in order to avoid the forfeiture of local aid subscribed for its construction. This

This was a suit by the Central Trust Company against the Toledo, Cincinnati & St. Louis Railroad Company, the Frankford & State Line Railroad Company, and Thomas A. Hendricks, to foreclose mortgages on defendants' roads. There was a decree of sale, and an order appointing a master to determine claims to the proceeds. His report gave priority to certain receiver's certificates held by appellees, C. L. Luce & Co., John T. Newton, the National State Bank of Mt. Pleasant, Iowa, and others. Sylvester H. Kneeland, for the first mortgage bondholders of the St. Louis Company, excepted to this report. His exceptions were overruled, the report confirmed, and he appeals. Decree af

R. G. Ingersoll and J. M. Butler, for appellant. Charles Pratt and W. I. Babb, for appellees.

BLATCHFORD, J. The Toledo, Cincinnati & St. Louis Railroad Company (hereinafter called the "St. Louis Company") was organized about June, 1881, and was formed by the consolidation of 10 local railroad companies, which were engaged in building lines of narrow-gauge railroad in Indiana and Illinois, between Kokomo, Ind., and East St. Louis. A construction company, known as the "Western Construction Company," (hereinafter called the "Construction Company, ") before that, and in 1880, had entered into contracts with these local railroad companies for the construction of their roads, whereby the Construction Company was to receive for the work all the stock and bonds of the several railroad companies, and, in some cases, in addition, certain local aid which had been raised along the respective lines. The lines had been located, and the work was in progress, when, in the

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