Page:Federal Reporter, 1st Series, Volume 8.djvu/152

 138 PEDBEAL BEPOETEE. �ally made and carried into f ull effect long before this suit was begun. The coupons have never been taken up by the company or cancelled, and there is no rule of law which requires that any moneys which have been paid by the company to the syndicate should be applied to their satisfaction, as against what has been doue by the parties. The evidence leaves no doubt on my mind as to what the parties have done. �I see nothing in the reports of the directors to the stockholders to estop the syndicate. It is true that all the members of the syndi- cate were directors, and no doubt cognizant of what the report con- tained. No one could have been deceived by the accounts as stated. Evidently they were intended to show the results of the business of the year. At onca the stockholders referred the report to a oommit- tee, which reported, on the tenth of April, that the syndicate had raised the money to take care of the interest, and were "protected by holding the coupons so taken up." Before the meeting waa held to which this report was made, the default had occurred in the payment of interest on the second mortgage, by reason of which this suit was brought. �I think, : therefore, that the syndicate cannot be required to refund the money paid by the receiver under a former order in this cause to take up their fijst mortgage coupons, and that they areentitled to thebenefit of the mortgage security applicable to those of the second mortgage, which they hold. If these coupons are not paid in full from the proceeds of the mortgage security, the balance will become part of the general debt against the company, for which the other collaterals were pledged under the original agreement. The assign- ment of the income of the road was vaeated by the receivership, un- der which the possession was taken for the benefit of the second mortgagees. �The question of the attachment by the syndicate in Georgia need not be considered,. as it was conceded on the argument that, if the pledges which the syndicate held were sustained, the attachment need not be enforced. �4. As to sales of parts of the mortgaged property ; �So far as the trustees of the mortgages have sold the property and invested the proceeds, the securities they hold in lieu of the property are subjeot to the order of the court, and may be dealt with as the circumstances require. If, as is stated, a part of these securities consists of first mortgage bonds, it is proper that they should be de- livered up and cancelled. Such an investment is equivalent to a ��� �