Page:Federal Reporter, 1st Series, Volume 5.djvu/302

 290 FBDEBÀIi BfiPQBTKB. �0^1 these faots the complainants daim that the entry of satisfaction of the «aid mortgage was without authority of law and in violation of their rights as owners and pledgors of the said stock; second, that as; said stock was pledged by said complainants as a further and additional security for the payment of. the said $4^000 debt, the primary security for ■which was the mortgage aforesaid, it was the duty of said corporation to exhaust itg remedy on said mortgage before resorting to the application of the said stock to the payment of said debt; third, that, upon the application of the said stock to the payment of the said $4,000 debt, the complain- ants were entitled to reçoive from the said corporation an assignment and transfer of the said bond and mortgage, and to bfe subrogated to ail the said corporation's rights and interests in the same; f ourth, th&t upon the state of the said mortgaged premises the complainants were entitled to receive from the fund in the hands of the assignee the said $4,000, with the interest on the same from the said nineteenth of July, 1876, less such payments as may have been made by said assignee for monthly dues on the said stock. �On the other hand, the defendant, the assignee of the bank- rupt, claims — First, that there was no valid or legal sale of the said stock by said bankrupt to the complainants, because, by the terms of the transfer, ail monthly dues paid in up to that time were only payments on account of the principal of the said mortgage, and that therefore the complainants did not acquire any right or title, either in law or equity, to the said 20 shares of stock, or any part thereof ; and, further, that upon the said corporation applying the said stock to the payment of the principal of the said mortgage ail sums due thereon beeame, and were, paid in fuU, extinguished, and dis- charged, and it beeame the duty of the said corporation to enter satisfaction on the record of the said mortgage, and to deliver up said bond and mortgage to the assignee. �The defendant further claims that the complainants, by reason of the terms of the said assignment and transfer of the said stock, are estopped from denying that the said stock ����