Page:Federal Reporter, 1st Series, Volume 2.djvu/884

 THOMAS V. B., P. K. te P. BY. 00, 877 �Thomas, Trustee, v. The Browkville, Fort Keaeuey & Pacific Eailway Co. and others. �(Oireuit Court D. Nebraika. May, 1880.) �CONTRACT— Pabtibb — Railroa» Dibectobs. — A contract between a rail- road and a construction company is void where any of the directors of the railroad are merabers of the construction Company. �Bame — EsToppEi. — Hatipication. — The stockholders of the railroad are not estopped by long acquiescence in auch contract, nor can the same be ratifled by a board of directors composed in part of members of the construction company. �Bamb — liQuiTABLB Kelibf — PuBLic PoLiCT. — Publie policy will not per- mit a court to grant equitable relief under such contract, where it fur- ther appeared, upon the face of the contract, that each director of the railroad received a pecuniary consideration for entering înto the contract. �In Equity. Mortgage foreclosure. �J. M. Woolworth and J. R. Webster, for complainant. �J. H. Broady, for defendants. �McCeaby, C. j. The defendant railway company is a cor- poration organized under the laws of Nebraska, and had authority to construct a railroad from Brownville weaiward to the west Une of Gage county, Nebraska. It possessed cer- tain property and assets which, on the eighteenth day of Sep- tember, 1871, according to the report of the master herein, amounted to $117,042.56. Said company having commenced the construction of said railroad, and being unable to complete it without securing capital from other parties, on the said eight- eenth day of September, 1871, entered into a contract with Benjamin E. Smith and William Dennison, of Ohio, and J. N. Converse, of Indiana, and such others as might thereafter be associated with them, whereby the latter, for certain consid- erations named, agreed to complete the construction of the the road over and àlong the route above named. �The mortgage sued on in this case was executed to Joseph �T. Thomas, trustee, to secure the payment of certain bonds �issued under the said construction contract for the purpose of �building the road. The validity of this contract is assailed �upon the ground that subsequently to its execution, and before �any work was done under it, two of the stockholders and di- 18* ����