Page:Federal Reporter, 1st Series, Volume 5.djvu/162

 150 rEDBBAIi BEPOBTEB. �Johnson, Poe, Bryan, Stirling, and Marshall, for complainant^ �Wallis, Lanahan, Carter, Ex-Gov, Thomas, Williams, and Horwitz, for defendants. �Morris, D. J. This is an application for the appointment of a receiver to take possession of and operate the Chesa,- peake & Ohio Canal. �The complainant, an alien, is the holder of $150,000 of the preferred construction bonds issued by the canal company under the Maryland act of 1844, c. 281. By this act the state of Maryland, which held $5,000,000 of the stock of the corporation, — about five-eighths of the -whole capital, — and which had also loaned to the corporation about $5,000,000 on a first mortgage of ail its property, including tolls and revenue, agreed to waive and postpone its first lien in favor of the bonds to be issued under the above-mentioned act, and authorized the corporation to issue a first mortgage of its tolls and revenue to execute them. Accordingly the corpora- tion did execute such a mortgage, dated June 1, 1848, and issued about $1,700,000 of bonds thus secured. This mort- gage conveyed to certain trustees the revenues and tolls of the canal to secure, after paying the repairs of the canal and the salaries of its officers, the payment of interest on th» bonds so issued, and a sinking fund for their ultimate redemp- tion. By the terms of the mortgage, in case of failure of the corporation to fulfil its obligations to the holders of these bonds, and subject to the conditions hereafter mentioned, the trustees were given power and authority to collect the tolls and revenue of the canal, and, after applying sufùcient to put and keep the canal in good condition and repair, and to provide the requisite supply of -water, and to pay the sal- aries of the officers and agents of the corporation and its cur- rent expenses, they were to apply theremainder in satisfac- tion of the bonds and interest. It was further provided that the corporation should retain possession of the canal so long as it should comply with the agreements in the mortgage, and if it should fail to comply with these agreements froiri any cause, except a deficiency of revenue arising from a fail- uro of business, without fault on its part, — the default tobe ����