Page:Federal Reporter, 1st Series, Volume 5.djvu/163

 BTEWART V. CHESAPEAKB & OHIO CANAL CO. 151 �inacle to appear by the trustees, — then the trustees might demand and should receive possession, and should appro- priate the tolls and revenue in the manner aforesaid. �The bill alleges, and the proof shows, that the last pay- ment of interest on complainant's bonds, and on ail bonds issued under this mortgage, was made in the month of De- ■cember, 1876, when the coupon which had fallen due July 1, 1864, was paid, and no payment bas since been made. This default, however, by the express terms of the mortgage, gives the complainant no ground to ask to have possession of the <!anal, either through the trustees, or by the appointment of a receiver, unless he has made it appear that the default in the payment of interest has been caused by some misappro- priation or mismanagement on the part of the corporation, and not by a failure of business without its fault, or else has shown to the court Buch corporate misconduct injurious to the bondholders as demonstratea the necessity of taking the property out of the hands of the corporation for the protec- -tion of their rights. The complainant alleges, and has en- deavored to show by testimony, that he is entitled to relief on both of these grounds, �The j5rst of the causes charged in the bill for the deficiency •of revenue is that the present management under President Gorman, who was elected in 1872, has been so entirely polit- ical that the canal bas been and now is used primarily aud mainly in the interest of partisan political objects, without regard to the rights of its creditors, and that the president, and those with him who control the management of the ca- nal, have, during the last three years, under pretence of em- ploying persons toperform service for the company, kept their political agents in its pay when not performing any service for the canal, and bave employed large numbers of uuneces- sary and useless employes for the purpose of promoting their own political schemes. Undoubtedly the fact that the state of Marylaud is the owner of a majority of the capital stock, and does, through her board of public Works, appoint the president and directors, has always connected tha manage- ����