Page:Federal Reporter, 1st Series, Volume 5.djvu/168

 156 VEDEHi-ïi BSPOBTEB. �from the earnings of the canal of extravagant Iiotel biïla, incurred by the president and directors, and charged bj them to the corporation, without warrant or authority. These bills, so far as ascertained and proved, amount, for the six years from 1874 to 1878, to Over $12,000. The items show that the charges are for personal expenses and extravagant entertainments of these officers, and indicate certainly a dis- position on their part to use their officiai position for their personal gratification, in disregard of the creditors they were appointed to protect — conduct in the managers of an insolv- ent corporation well calculated to excite suspicion and dis- trust with regard to the fidelity of their general management of its concerna. The excuse offered — that it had been for years the custom of the directors to extend such "hospitali- ties" at the expense of the canal — is, of course, no defonce of so unwarrantable an expenditure of creditera' money, and is some proof of the averment made by the complainant that years of abuse have sanctioned methods of conducting the afiFairs of the canal which waste its revenue and deprive them of money which should be paid to them. But while it is true that these proven bills do tend to excite distrust, they do not actually prove anything but themselves, and are not in them- selves sufficient to Justify the costly machinery of a receiver- ship. �The complainant further charges that the conduct of the president and directors in obtaining the passage by the legis- lature of Maryland of the act of 1878, authorizing the corpo- ration to issue $500,000 of repair bonds, was without actual necessity, and, as it endangered the security of the complain- ant, was a seriouB breach of trust committed by the corpora- tion. The passage of this act was procured by representing to the legislature the dismantled condition of the canal, caused by the extraordinary flood of 1877, and the impossi- bility of raising money on the repair bonds authorized by the act of 1844. Attorneys who were the representatives and agents of the complainant, acting in his behalf bef ore the same legislature, and in respect to the bonds he now sues upon, were also at that time attorneys of the corporation employed ����