Page:Federal Reporter, 1st Series, Volume 2.djvu/305

 298 FEDERAL EBPORTEB. �not doubtful, and the bill must stand, unless there is no equity stated therein, and this brings me to the consideration of the other ground of demarrer. �2, The defendants demur for want of equity in the bill. The bill alleges, in substance, that the trustees, in the deed to secure the $3,000,000 issue of bonds, in May, 1874, at the instance of John S. Kennedy, one of the defendants in this suit, and the agent of a eommittee of Amsterdam bond holders, having in their hands and under their control a majority of the bonds of this series, commenced a suit against the First Division of the St. Paul & Pacific Kailroad Company and othera to foreclose the trust deed, and that after the commence- ment' of the suit Kennedy, the agent, entered into an agree- ment with the defendant company for the suspension of the prosecution of the suit, and the trustees who instituted it, at his instance, suspended the prosecution of the same for sev- eral years, and until requested by him to proceed; that some- time in 1878 one of the trustees resigned, and Kennedy was appointed as trustee and co-complainant in said foreclosure suit, and thereafter acted in the capacity of trustee in said trust deed and foreclosure suit, and as the special agent of the eommittee, and of the bond holders who had placed their bonds in the hands of the eommittee for control and manage ment; that on the ninth of October, 1876, the trustees, in- cluding Kennedy, under the authority conferred in the deed of trust, took possession of the railroad appurtenances and property covered by the trust deed, and operated the road, and that in 1876 or 1877 Donald A. Smith, George Stephen, N. W. Kittson, James J. Hill and others formed a syndicats for the purpose of acquiring the Une of railroad, etc., covered by the mortgage, under the foreclosure proceedings and a sale, and made a proposition, through Kennedy, to the eom- mittee of Amsterdam bond holders for the purohase and con- trol of the bonds in their hands, and that Kennedy, the agent of a eommittee of bond holders, and trustee for ail the bond holders, entered into an agreement with Smith, Stephen, Kitt- eon and Hill for the purchase and control of the bonds held by the eommittee, and into negotiations which contemplated the ����