Page:Federal Reporter, 1st Series, Volume 8.djvu/20

 6 FESBBAL BEFOBTBB. �mth the complete legal title as against the railway company and as against the other parties. I speak of the legal title. I am not now eonsidering the defences resting on other grounds; they depend on other circumstances, to which I will now advert. I am simply call- ing your attention to the questions raised by these parts of the answer which assert that the plaintiff has no right to sue because it is not the holder and owner of the paper, or because it has not the title to it. �Then we come to the other defences made on the part of the defendants, other than the railway company, and which constitute the equities claimed on their part. It is claimed, to state it shortly, that the other defendants signed the note as an accommodation to the railway company, upon the faith of an understanding between them and the railway company as to the appropriation of its pro- ceeds; that this understanding was violated by the transaction in this case by which the bank became the holder of the note in suit ; and that this was done, so far as the bank is concerned, with full notice on its part of the rights of the defendants. The first question under this head, theref ore, is this : Was there such an understanding ; if so, what were its terms? It is claimed, in the first instance, that that understanding exists by force of the resolutions of the boai-d of directors of the railway company, of April 15, 1878, and of the obli- gation of the company, given to a trustee in trust for the makers of these notes, in pursuance of this preamble and resolution. I will read them: �" "Wheeeas, in the judgment of this board of directors the interests of the Miami Valley Eailway Company demand that certain rights of way should bo speedily procured, and that the work of construction should be vigorously prosecuted, these two objects requiring much more money than is at present under the control of the company, and it having been suggested the most feasible mode of raising said money would be by certain of the directors and others executing their notes in sums not exceeding ten thousand dollars, ($10,000,) each due in one year, and loaning same to the company, said Miami Yalley Railway Company to provide for the payment of said notes at their maturi*y, aad alao to indemnify the makers of said notes against loss by rea- son thereof, by depositing with a trustee the first mortgage bonds of the com- pany, in the ratio of three dollars in bonds to one dollar of liability created by said notes; therefore, �" Resolved, that the treasurer of the Miami Valley Railway Company be, and he is hereby, authorized and instructed to execute, in the name and on behalf of the company, instruments of writing, in substance as follows, namely: �" Whereas, have executed their joint notes to the order of the treas- �surer of the Miami Valley Railway Company, dated April 15, 1878, and due ��� �