Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/820

 § 815.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XVII. lar position, and not only to permit other bondholders to intervene, but to see that their rights are protected in the final decree.'" ' In another case, where a railroad mortgage of doubtful adequacy had been executed directly to all the bondholders by name, to secure specifically the sum due to each, it was held that no single bondholder, even though professing to act on behalf of all who might come in and contribute to the expenses of the suit, could proceed alone against the company, and obtain a sale of the property mortgaged. For, the sufficiency of the security being doubtful, all other creditors similarly situated should have had notice, in order to protect their interests; and even in equity, a suit on a written instrument should be brought in the name of all who are formal parties to it, and retain an interest therein. 2 And again, where a col- lusive and fraudulent sale of corporate property, procured by one set of creditors, had been set aside at the suit of other creditors, the creditors procuring the collusive sale were held not entitled to recover back money which they had paid to the holders of a prior mortgage at a time when the suit to set the sale aside was pending ; nor were they entitled to be sub- rogated to the security of such mortgage. 3 the sale was set aside. Compare Wabash, etc., Canal Co. v. Beers, 2 Black, 448. A bondholder under a mortgage will not be entitled on the foreclosure of the same to enforce a side agree- ment made by him with the corpora- tion, by which he would obtain an inequitable advantage over the other bondholders. Vose v. Bronson, (i Wall. 452. When bonds in excess of the limit under a mortgage are sold to bona fide purchasers, and nothing appears in the bonds or in the mort- gage by which the purchasers could have ascertained that the bonds which they purchased were unau- thorized, such purchasers will be en- titled to share pro rota with the other bondholders. Stanton v. Ala- 800 bama, etc., R. R. Co., 2 Woods, 523. The decision of the court, however, seems, in this case, actually to have rested on the inability of the court to determine which were the bonds that had been issued in excess, the court saying that it did not follow that the highest numbers were such, as the bonds might all have been ne- gotiated together, and the highest numbers sold first. 1 New Orleans Pac. Ry v. Parker, 143 U. S. 42, 58, opinion of court per Brown, J. 2 Railway Co. v. Orr, 18 Wall. 471. See Pennock v. Coe, 23 How. 117. 3 Railroad Co. v. Soutter, 13 Wall. 517. Compare Drury v. Cross, 7 Wall. 290; § 700. But trustees un- der a railroad mortgage containing