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Florida Railroad, and which had theretofore The complainant stated that Soutter, one been known as the Florida Railroad Com of the trustees for the benefit of the second pany, should thereafter be known as the At mortgage bondholders, was not living, and lantic, Gulf & West India Transit Company; averred that McRae, the other trustee, had and the rights, franchises, and privileges, as neglected and refused to execute the powers well as the duties, responsibilities, and li of his trust for the benefit of the bondhold. abilities, of the said corporation, should in ers, and had suffered a large quantity of the all respects remain and continue the same as lands conveyed to him for the purposes of though no change had been made in their the trust to be fraudulently and collusively said name.

sold for the benefit of the defendant David On August 21, 1873, Robert H. Johnson, a L. Yulee, and the Atlantic, Gulf & West citizen of the state of New York, brought his India Transit Company. He averred that the bill in equity in the circuit court of the Unit railroad was of great value, and worth much ed States for the Northern district of Florida more than enough to pay the whole amount against the said Atlantic, Gulf & West In of the outstanding bonds and other debts dia Transit Company; John McRae, as trus of the company; that the original Florida tee, appointed by the Florida Railroad Com Railroad Company was identical with the pany, for the benefit of the holders of second Atlantic, Gull & West India Transit Com. mortgage bonds thereof, a citizen of the pany, subject to the same trusts and liajilstate of North Carolina; Marshall O. Rob ities, and composed in part, if not altogetter, erts and Edward N. Dickerson, of the state of the same persons, and that the companies of New York; Isaac K. Roberts, a citizen of were in privity of estate and of person; that the state of Louisiana; Samuel A. Swann, the change of name had been made in guile a citizen of the state of Florida; David L. and covin, and with intent to defraud the Yulee, of Florida; and the Florida Railroad creditors of the Florida Railroad Company; Company,-in wbich bill the complainant al. that the stockholders of that company, exleged that he was the holder and owner of cept the trustees of the internal improve two second mortgage bonds, of $1,000 each, ment fund, and except such stock bolders as of the Florida Railroad Coinpany, dated had accepted stock in payment of debts due March 1, 1836, payable March 1, 1891; that thein for aiding in the construction of the these bonds were a second mortgage on the road, were credit stockholders who had subFlorida Railroad, and on property pretended scribed for stock chiefly in large amounts, to belong to the Atlantic, Gulf & West India and had paid only a small assessment thereTransit Company; that, by the terms of the on; that the majority of the stock was held bonds, the trustees named therein were em in this manner by persons who had paid powered to sell or otherwise dispose of the merely nominal sums thereon; that David said property, without judicial proceeding, L. Yulee was the president of the Florida for the benefit of the holders of the bonds Railroad Company, and had controlled, either in default of the payment of the principal or in his own name or through Dickerson and interest thereof to an amount equal to one associates, a majority of the shares of the year's interest; that there was then due on capital stock of the company; and that the the bonds held by the complainant all of the cost of construction of the railroad was paid principal and $1,760 of interest, amounting almost entirely, if not altogether, out of monin all to $3,760, being in amount more than eys and credits resulting from negotiations one year's interest; that, by reason of de of the first mortgage bonds and the sale of fault of payment of interest, the principal the second mortgage bonds. had become demandable of the company; It was further stated that the associates and that for the payment of the same all the of Dickerson were unknown to the complainsaid railroad property had become liable. ant, but the complainant stated that he was

The complainant then referred to the issue informed and believed that such associates of the first mortgage bonds under the in included Yulee; and he prayed for a discov. ternal improvement act, and averred that ery from Yulee of the names of all such asthe railroad had never been completed; that, sociates, and of the terms and manner of by the terms of its charter, its main track their association. was to be extended to Tampa Bay; that this Other allegations of the bill were as fol. main track had never been built; and that lows: That in 1866, within six months after the net earnings of the road had never at the establishment of the so-called “provisionany time exceeded 6 per cent. of the capital al government" of the state of Florida, Y:stock, bonded debt, and sinking fund. It lee, then president of the Florida Railroad was alleged, therefore, that the interest due Company, effected an arrangement by which on such of the first mortgage bonds as might the defendant Marshall o. Roberts advanced be outstanding was demandable of the inter the money to Yulee and Dickerson and asnal improvement fund, and was not a charge sociates* to purchase the first mortgage bonds upon the company or the road. The com of the company then outstanding, at about plainant claimed that if, however, it should 20 per cent. of their face value, for the bene be decreed that such interest was payable fit of Yulee and Dickerson and associates; by the company, he was entitled to pay such that these bonds were so purchased by Yuinterest and redeem the road.

lee or by Dickerson and associates, or by

Roberts for them, under an agreement that because of the inability and failure of the the railroad should be sold for the interest company to pay the 1 per cent. per annum then accrued upon the bonds, and be bought due the sinking fund, when, in reality, the in by Yulee and Dickerson and associates, company was able to pay the same, and its and be held by them to the exclusion of failure so to do was the act and default of the internal improvement fund and its in the persons who controlled it and who proterest in the capital stock of the company, cured its seizure and sale in the interest of and be divested of the trusts and liens there Yulee and Dickerson and associates; that the tofore created, and be freed from the debts persons pretending to be governor, comptroland obligations due the complainant and the ler, treasurer, attorney general, and register creditors of the company; that Yulee, presi- of state lands, and, as such officers, trustees dent of the company, procured an order from of the said fund, were without authority as the alleged governor and other officers of such trustees; that such persons, having been the pretended provisional government of placed in office under an unconstitutional exFlorida, claiming to be trustees of the in- ercise of power by the president of the Unitternal improvement fund, for the seizure and ed States, were without lawful authority to sale of the railroad for the satisfaction of exercise the functions of their respective ofthe 1 per cent. per annum due the sinking fices; that, therefore, the seizure and sale fund; that Yulee, president as aforesaid, of the railroad as aforesaid was not only agreed to pay in at such sale the majority an intrusion and a trespass, but that such of the outstanding first mortgage bonds, sale and the said purchase were absolutely and further agreed with the said trustees void; that all that was paid by Yulee and to guaranty that the railroad should be pur his associates for the railroad at the sale chased at the sale for an amount sufficient thereof was a check for $26,000 and about to pay 20 per cent. of the first mortgage $1,000,000 of first mortgage bonds, the prinbonds; that in pursuance of that agreement cipal of which was not due until 1892, which the railroad was seized and sold by the bonds were bought either by or for Yulee trustees, and was bid in by Isaac K. Roberts and his associates at about 20 per cent for the benefit of Edward N. Dickerson and of their face value; that those bonds, at associates for the sum of $323,000, of wbich the time they were procured to be sold and all but about $96,000 was paid in the said bought by Yulee and his associates for the first mortgage bonds; that the trustees, un purpose of obtaining the said sale, had not der an agreement negotiated by Yulee, also been sold in the manner required by law, transferred to him and Dickerson and asso but had been hypothecated by the company ciates not less than 100,000 acres of public to effect a loan of money and to secure the lands belonging to the said fund in payment repayment of the same, and were subject of interest accrued on the first mortgage to hypothecation at the time they were so bonds, for the debt of which bonds Yulee purchased; and that the holders of the bonds and Dickerson and associates were liable as were not then demanding payment of the stockholders of the company; that thus the same, but were induced to sell them by the trustees not only received those bonds and representations of Yulee, which the complain. canceled them, in violation of law, before ant believed to be untrue and to have been their principal had become due, but likewise made with fraudulent intent, that the road conveyed the land to Yulee and Dickerson could not be put in running order after the and associates on the pretense that the in- | injuries it had sustained during the war terest of the same was due and demandable without an advance of capital by the holders of them, the said trustees, and was a charge of the bonds, and that it was not then in upon the said fund, and then really paid condition to pay operating expenses. to Yulee and Dickerson and associates repre The prayers of the bill were that the court senting the company a large and valuable might decree that the second mortgage bonds consideration for paying their own or the held by the complainant constituted a lien company's debt; that, since the alleged pur on the property of the Florida Railroad Comchase of the road, Yulee and Dickerson and papy; that the complainant had a right to associates had continued in the possession, enter upon the property, and sell or otherwise management, and ownership of the railroad dispose of the same, for the payment of the as before, and that Yulee had directed its af principal and interest of his bonds; that, in. fairs and received its funds; that at the time asmuch as the trustees of those bonds had of the sale the iron rails on the road were failed and refused to perform their duties, the wortb in cash a sum greater than the pur powers confided to them should be executed chase money paid for the road, and that all by the court; that the sale made by the trusthe property of the company was then, at tees of the internal improvement fund was the time of the sale, worth not less than without authority, and absolutely null and $1,000,000; that the internal improvement void, and in no way affected the complaintrust was a public trust, and that Yulee ant's right to have the property disposed of and Dickerson and associates had express for the satisfaction of the said second mort. notice thereof; that it was pretended by gage bonds; that the persons who pretended Yulee and Dickerson and associates that the to act as governor, comptroller, treasurer, at. road was seized and sold by the trustees torney general, and register of state lands,

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end, as such, to be trustees of the internal im chasers rebuilt the road, purchased an entire provement fund, did not hold such offices in ly new rolling stock, built and furnitbed with: law, and, therefore, that the pretended sale new machinery the workshops and other by them of the road was void; that, if such needed buildings, there being none at either sale of the property was valid for any pur end of the road, and set the road in operation. pose, the purchase thereof inured to the bene In doing this the purchasers have expended fit of the stockholders, bondholders, and oth more than five hundred thousand dollars, more er creditors of the company, and of the inter than the road has received by way of earnnal improvement fund; that at the time of ings from all sources whatever, and not one the sale the railroad was not a completed | dollar has been repaid to any of the parties road, within the meaning of the internal im whose money has been expended in this provement act, and, therefore, that the inter work." He further stated that, from the est which had then accrued on the first mort time of the purchase of the road to the filing gage bonds was not a charge upon the rail of the complainant's bill, no demand was ever road, and that the same was not liable, under made by the complainant in the case, or by the provisions of the said act, to seizure and any one, upon the owners of the road for paysale; that, either in the event that such in ment of the second mortgage bonds, and that terest should be* decided by the court to be he never thought, or heard it suggested, that payable out of the said fund, or in the event any such claim would be made; that the deed that it should be decided to be a charge up of trust to Stewart and Conkling, executed by on the railroad, the complainant had a right the purchasers of the road, was duly recordto pay the interest due on the outstanding ed in every county in Florida in which the arst mortgage bonds, and to redeem the road road existed; and that those trustees had infor the satisfaction of his demands; that the dorsed a large number of bonds, which were said companies be foreclosed of all equity of sold to various bona fide holders, and which redemption in the property; and that the were then outstanding, secured by the said same be sold for the payment of the complain- deed of trust. He further stated that the ant's bonds, subject to the lien of the princi- road was in the possession of the company pal of the first mortgage bonds.

defendant, and not of Yulee, the vice presiThe complainant further prayed for an in- dent of the company, or of any other person. Junction to restrain the defendant company On the same day, Yulee filed an affidavit, and others from receiving the income of the in which he denied the essential allegations road, and directing the business of the same, of the complainant's bill. He afterwards em. and for the appointment of a receiver to col- | bodied the substance of his affidavit in his anlect, such income, and to manage the business of the road under the orders of the court. On September 27, 1873, the case was consid.

September 11, 1873, the said complainant ered by Bradley, circuit justice, as to the filed an amended bill, making George H. | complainant's motion for an injunction and Dawson, executor of William Phelan, de the appointment of a receiver of the road, and ceased, a party defendant, showing that Phe the motion was denied. lan had been the holder of certain bonds of The Atlantic, Gulf & West India Transit the Florida Railroad Company, known as the Company filed its answer on November 3, "southern section bonds," and asserting that 1873, in which it denied, on information and the lien of the same upon the said property belief, all the allegations of the bill which was inferior to that of the bonds held by the charged the Florida Railroad Company, the complainant.

trustees of the internal improvement fund, On the same day, Mark A. Knowlden, stats and others with fraud, and denied that they ing himself to be an executor of the said Wil had done any act in fraud of the complainliam Phelan, deceased, filed a cross bill re ant or any other bondholder or creditor of lating to the same southern section bonds de- the Florida Railroad Company. The said de scribed in the complainant Johnson's amend fendant company averred that, until the bill ed bill, which bonds, as alleged, were secured was filed, it never heard that any of the bondby a deed of trust on the portion of the Flori- * holders claimed that it was indebted to them, : da Railroad between Waldo and Tampa. Up or that it held the property subject to the lien on this bill no proceedings appear to have of the bonds, although the holders of almost beeu had.

all of the bonds had been in communication The defendant Dickerson did not put in an with the defendants. It further averred that answer to the complainant's bill, but on Sep- the road was in its possession exclusively, tember 26, 1873, he filed an affidavit contain and not in the possession or control of Yulee ing, among other things, the following state or any other person, and that Yulee had no ment: “At the time of the purchase, the road authority over the road, except such as he dewas entirely destroyed for many miles, the rived from the company as one of its officers. Iron being removed to other roads and states, John McRae, surviving trustee of the second and the whole wood superstructure was de mortgage bonds, in his answer filed July 22, cayed or destroyed and worthless. There | 1874, denied, in answer to the allegations of were very few cars on the road, and the few the bill, that he had neglected and refused to that were there were entirely worthless, and resist the sale of the road, or to have it set not one of them is now in existence. The pur aside as fraudulent, and averred that until he

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saw such allegations he never heard it inti wrecked condition, and the failure of the mated or suggested, to the best of his recol company to obtain means to extricate itself lection, that there was any fraud or irregu from the situation in which it was left by larity in the sale by the trustees of the inter the war. He denied that any of the first nal improvement fund, and that, therefore, mortgage bonds were unissued and held in the charge that he refused to interfere con hypothecation for the company, or that any cerning the sale was untrue.

of such bonds were used for any other purThe answer of David L. Yulee was filed poses than those contemplated by law, and December 3, 1874. This defendant referred averred that all of the said bonds were isto the fifth section of the internal improve sued by the company, under its contract for ment act, and stated that as the road of the the building of the road, in payment for the Florida Railroad Company authorized by its bridges and other structures crossing the charter, and determined upon by a compe marshes and waters of Amelia river, and for tent engineer and by the directors of the iron and equipments put on the railroad. company, was upon the route from Amelia He denied, further, that the defendant comIsland to Cedar Keys, in the direction of pany was identical with the original Florida Tampa Bay, the company gave notice to the Railroad Company, or was in any way con. trustees of the internal improvement fund of nected with the transactions or obligations its full acceptance of the provisions of the of the same; that lands conveyed to Soutter act, and specified the line from Amelia Is- and McRae,* trustees, had been suffered by: land to Cedar Keys as the part of the road McRae to be fraudulently and collusively which it proposed to construct; that, soon sold for the benefit of the defendant Yulee; after such notification, it entered into a con that the property on the road was worth at tract for the construction of this portion of the time of the sale $1,000,000, or even, in the road, in which contract it was stipulated cash, the sum of $323,000, for which it was that the contractors should receive the bonds sold; and denied that he was one of the perwhich were to be issued under the said act; sons included in the designation "Edward N. that all the bonds authorized by the act were Dickerson and associates." issued; that under the said contract the On March 17, 1877, W. W. Corcoran was road from Amelia Island to Cedar Keys was made a party defendant, and on the 2d of built; that the object of the act amending the following month he filed his bill, alleg. the company's charter was to enable it to ing his ownership of certain of the second construct the remainder of the line to Tam mortgage bonds of the Florida Railroad pa, which it designed to do as soon as it had Company, the principal of which was due on completed the line to Cedar* Keys and was March 1, 1877, and upon which interest was able to provide the means necessary for the due from March 1, 1860. He stated that he work; that, upon the completion of the road adopted all of the statements and allegafrom Amelia Island to Cedar Keys, the said tions of the original bill filed by Jobnson, trustees regarded it as a completed road, un and asked that he might be admitted to der the said act and under the charter of the share in the relief therein prayed. company; that the company was liable

John A. Stewart and Frederic A. Conkling, thereafter for the sinking fund charges and trustees named in the deed of trust executed interest; and that the company, believing for the benefit of the holders of bonds isthat such were its obligations, paid several sued by the purchasers at the said sale of installments of sinking-fund charges, and the railroad property, were made parties de also a due proportion of its net earnings, as fendant on October 16, 1877, and on the fol. required by law, down to August, 1864, as lowing day they filed their answer, which the defendant believed.

was devoted mainly to showing that it The defendant Yulee then described the would be inequitable for the complainants to dilapidated and impoverished condition of profit by their own laches, and to enjoy the the road, caused by the interruption of busi- advantages derived from the sale of the ness brought about by the war, and the bonds to secure which the said deed of trust great injury done the road by acts of the was made to the respondents, and thus to opposing armies, and averred that be used deprive the innocent holders of those bonds every means in his power to comply with of the security upon which the loan was the requirements of the internal improve | made. ment act and to prevent the sale of the road, These parties also filed a cross bill, on Ocwhich he feared would be necessary. He tober 17, 1877, a verring therein that they denied that be procured an order for the had accepted their trust in good faith, and sale; that he agreed with the trustees that without notice of any pretended claim on the road should be purchased for an amount the property by the complainant in the origsufficient to pay 20 per cent. of the out inal bill; that the bonds issued by the purstanding first mortgage bonds; that the fail chasers of the road were issued properly; ure to make payment to the sinking fund and that the value thereof was greatly imwas with intent to procure the seizure of the paired by the pretended lien of the said secroad and its purchase by Dickerson and as ond mortgage bondholders. They therefore sociates; and he averred that, on the con prayed for a decree that the deed of trust trary, the sale of the road was caused by its to them was a valid conveyance; that the

holders of the second mortgage bonds be re ferior to the said second mortgage bonds, quired to resort to lands in the bands of which constitted a first lien on the conthe said McRae, trustee; that the suit be structed portion of the road between Waldo dismissed; and that the complainants John and Tampa, on the franchise necessary for son and Corcoran be enjoined from seeking its operation, and on all the land granted or to enforce their pretended lien. Upon this to be granted by the United States in aid cross bill no subpoena was issued nor pro of the construction of the road. Relief was cee gs had.

asked appropriate to these allegations. Leave The Atlantic, Gulf & West India Transit to file this bill was denied by the court. Company, on August 29, 1877, filed its answer On December 7, 1887, after hearing upon to Corcoran's bill, in which answer, among the bills, answers, and evidence, the bills of other things, it set out that Corcoran was the complainants were dismissed. The case fully informed of all the essential transac was then brought here on appeal. tions at the time they were made, upon which

A. H. Garland, Wilkinson Call, Heber J. the claims of himself and Johnson were

May, and George F. Curtis, for appellants. based, and had chosen to sleep upon his

A. H. Wintersteen, for appellees. rights, and stated that, therefore, Corcoran ought not to be permitted, after a silence of Mr. Justice SHIRAS, after stating the facts about 10 years, to come into court with in the foregoing language, delivered the opin. charges of fraud against the participants in ion of the court. those transactions.

On the 21st day of August, 1873. Robert Replications were duly made to all of the H. Johnson, a citizen of the state of New said answers, and the taking of testimony York, filed, in the circuit court of the United was begun on November 8, 1877.

States for the Northern district of Florida, On June 13, 1883, Bella A. Johnson, exec a bill of complaint against the Atlantic, Gult utrix of Robert H. Johnson, deceased, W. & West India Transit Campany, a corporaW. Corcoran, and others, presented to the tion of the state of Florida, the Florida said court a bill styled by them a bill of sup Railroad Company, and other persons. plement, revivor, and amendment, seeking The complainant alleged that he was the to bring in additional plaintiffs and defend

owner of two bonds, of $1,000 each, made by ants, and setting up matters which, as the the Florida Railroad Company, dated March complainants averred, had only come to their | 1, 1856, payable on March 1, 1891, and seknowledge since the filing of their said bills, cured by a second mortgage on the railnamely, that on November 10, 1879, there was road, franchises, and property of said comsubmitted to the secretary of the interior of pany, and which bonds, with interest there the United States by the Florida Railroad on, were due and unpaid. Company, attempting to secure the advan The object of the bill was to set aside and tages of certain laws relative to government have declared null and void a sale of the land grants to certain railroads, a map and property and franchises of the Florida Rail. evidence showing that a map of definite lo road Company, made on November 1, 1866, cation of the company's road from Waldo to by the trustees of the internal improvement Tampa had been filed in the secretary's of fund, in pursuance of the provisions of the fice by the company on December 14, 18:50 acts of assembly under which the company (which map had been lost). and that the map was incorporated, and possessed its rights last presented was a duplicate of the original and property. It appears that, after said sale, map; that thereupon the secretary of the in a deed, bearing date November 3, 1866, was terior had approved the map and the original executed and delivered by the trustees to location and survey, and had directed that Edward N. Dickerson and his associates, repthe necessary withdrawal of United States resenting the purchasers at the sale, and that lands be made to secure the proper adjust- subsequently the purchasers organized themment of the grant along the original line of selves into a new corporation, by the name of the road, that this withdrawal was made the Florida Railroad Company. This new on March 26, 1891. It was alleged that the company was reorganized January 1, 1870, company, having performed within the prop under authority of an act of the legislature er time such work on the road between Wal. of Florida of June 24, 1969, and afterwards, do and Tampa as was required by the in by an act of assembly dated January 18, ternal improvement act, became entitled to 1872, its name was changed to that of the land along the road; that, therefore, the Atlantic, Gulf & West India Transit Comtrustees of the second mortgage bonds *be.

pany. came entitled to such land, and to hold the As already stated, the original bill of Robert same for the benefit of the holders of those H. Johnson was filed August 21, 1873,--albonds, and subject to the lien thereof; that most seven years after the sale. W. W. Cor. on March 1, 1859, the Florida Railroad Com coran filed an intervening bill, alleging ownpany issued other bonds, known as "south ership of some of the second mortgage bonds ern extension bonds," attempted to be se on April 2, 1877. In 1883, Bella A. Johnson, cured by a deed of trust executed to James as executrix of Robert H. Johnson, deceased, E. Broome, who was succeeded as trustee W. W. Corcoran, and some new parties, apby S. A. Swann; that such bonds were in plied for leave to file a supplementary bill,

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