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matter until we solve the question whether it was contemplated that in case his efforts failed, and the foreclosure was resorted to, he agreed to bid in this property for the benefit of the bondholders and creditors of the old corporation. All agree that the efforts to either close up the affairs of the old company, or raise the means wherewith to pay the debts and finish the road, and go on in the name of the old corporation, proved futile. It is useless for us to recite the history of this matter, showing how defendant Applebaum was met with obstacles at every turn. Nester served notice that his assignment of stock had been obtained through fraud. No arrangements could be made to pay the debts of the old corporation. Efforts were made to settle with the Prather Engineering Company, but they failed. The attitude of the bondholders known as the Saginaw bondholders was antagonistic, and the time was reached, after weeks of effort, when Mr. Applebaum became satisfied, acting, as we think, in good faith, that it was useless to attempt to adjust the affairs of the old corporation, and he came to the conclusion that a foreclosure of the mortgage was absolutely necessary, and complainant Sullivan joined with him in renewing the request that foreclosure proceedings be commenced.

Did the agreement on the part of Applebaum extend to foreclosure proceedings? In other words, were the foreclosure proceedings a part of the method by which he had proposed to straighten out, if possible, the affairs of the old company? As we have said, complainants claim, in their reply brief, that the answer of defendants Applebaum and Mitshkun to the bondholders' petition admits the alleged trust, as claimed by complainants. We have read with great care this answer, and we regret that the same cannot be inserted here, but its length forbids that course. We quote, however, therefrom as follows:

"That it was represented to said Applebaum that the bondholders of said railway who lived in the said city of Saginaw would readily co-operate for the purpose of either reorganizing said railway, or placing its affairs in a posi

tion where said road could be sold and disposed of to an advantage; that after considerable had been said along these lines by the parties mentioned, the question of the outstanding stock came up; that it was proposed by said Thomas G. Sullivan and said Timothy E. Tarsney that if the remaining stockholders outside of themselves, and particularly the Nesters, would transfer their stock to said. Isaac Applebaum for the purpose of placing the said corporation in a position where its affairs could be handled to advantage, that they, the said Thomas G. Sullivan and Timothy E. Tarsney, would do likewise; that said Timothy Nester and said Arthur S. Nester agreed that this was the best thing to do, and congratulated the said Isaac Applebaum upon being able to get said Sullivan and Tarsney in a frame of mind where they would do what is above set forth; that said Applebaum said to said Sullivan and Tarsney, said Arthur S. Nester and Timothy Nester, that he would hold the outstanding stock of said corporation for the said corporation's benefit of its creditors, and for no other purpose, and that if the affairs of the company could be straightened out without the necessity of the foreclosure of the mortgage, either by sale or otherwise, he would do everything in his power to accomplish that end, and that he would hold said stock for said corporation and its creditors, so that in case of a sale of the property and franchises of the road, or in case of a reorganization of said railway, it would be possible to turn over to said creditors thereof a complete and clear title; that in pursuance of said understanding, and that alone, and for the benefit of said corporation and its creditors, said Applebaum took from the said parties holding the stock of the said company, whether the same was in trust or otherwise, assignments thereof, and held the same until a few days after the commencement of the foreclosure suit in this court; that the said Applebaum expressly stated to said parties, and to everybody concerned in said railway, whom he had opportunity to meet, that if he found it impossible to bring about any settlement of its affairs, that said stock would be transferred to the treasurer of said corporation by him, and the said Mitshkun, which was done; that after taking the said transfers under the aforesaid conditions, and under the belief that he was dealing with men who recognized that many mistakes had been made in the carrying on of the said railway's business, and

that the internal disputes which had constantly arisen should be forgotten, and that all should turn in and help to bring about satisfactory results, proceeded to carry out, so far as lay in his power, the plans and ideas which had been suggested for the purpose of accomplishing such results; that the assignment of the stock given by said Arthur S. Nester and Timothy Nester was dictated by said Mr. Timothy Nester to Mr. Leland B. Case, a stenographer in the United States district court, who resided in the city of Detroit; that it was stated by said Timothy Nester that a portion of this stock was standing in the name of one Duffey, a relative of said Nester, and that he, said Duffey, had placed the same up for collateral security for a loan of some $12,500 with a bank at Chicago, Ill., and the assignment of said stock was made by said Nester subject to said loan, the stock itself not having been delivered by any of said parties to said Applebaum, and he only obtained a written transfer thereof; that in and by said transfer there was no obligation placed upon said Applebaum to pay the sum of $12,500, or to said Duffey, or to any one connected with said bank; and it is charged, upon information and belief, by these defendants that said loan of $12,500, so claimed by said Nester to have been made by a bank in Chicago, was a myth, and was a part and parcel of the scheme which said Nesters had in their minds to compel said Applebaum to pay said sum of $12,500."

Without quoting further from this answer, it may be said that it proceeds to state in extenso what Applebaum did, how he endeavored to place said railway in a condition where its assets and franchises would be made more valuable, and that upon investigation he found that nearly all the franchises which had been obtained by the original promoters of said railway, and which had been transferred to said railway, were in a precarious condition, because the time limit within which said railway company had agreed to commence operations to lay tracks had expired; that he caused his attorneys to procure an extension of these franchises and spent considerable time himself upon this undertaking; that after a great deal of work, and considerable expense which he was obliged to pay out of his own pocket, he procured from the township

and villages through which it was intended to build and operate said railway, additional franchises, or extensions of those previously obtained, and turned the same over to the railway; that he caused a survey of the whole of the line of said railway to be made, so that the said company would be in a position to clearly define and explain all of the conditions existing between the cities of Flint and Saginaw, and to properly lay, before any parties interested a full and complete history of the franchises, rights, and other assets, of said railway company, and also the possibilities of said company in case said line of railway were completed; that besides these things he had contracted for steel rails at a very low price, which contract he was willing to turn over to said railway company as soon as it was in position to go ahead with the work of construction; that in addition thereto he obtained private rights of way for a considerable portion of the line between the city of Flint, Genesee county, and Cook's Corners, Saginaw county; that he took options upon private rights of way between these places in his own name as trustee, which he afterwards turned over to the attorneys for the receiver in the cause; that besides this he bent every effort towards obtaining an adjustment of the differences between the stockholders and bondholders of said corporation, and was willing himself, at all times, to co-operate with every bondholder and creditor, either upon the basis of reorganization of said road, or upon the basis of a sale of said road, and was at all times willing to take his proportionate share of such means as might be realized out of the reorganization or sale of the road, based upon the actual money that had been invested by the respective parties. He proceeds to state how he worked, together with his attorneys, night and day, for the purpose of accomplishing these ends. He states his difficulty with the Nesters, and that he became satisfied that they and other advisers were not acting in good faith; how said Nester pretended that the said Applebaum had taken individually, and for himself, the assignments of the stock hereinbefore mentioned;

how Nester then proceeded to serve notice upon everybody connected with the affairs of the old company, to the effect that his assignment of stock was void; that an attempt was made to hold him liable as a stockholder; that he was continually harassed by said Nesters and their associates; that he attempted to learn the names of the bondholders residing in the city of Saginaw and vicinity; that he was unable to do this on account of the methods and tactics used by said parties in their fight against him; that he expended, outside of attorneys' fees and outside of his own time, which extended over a period of three or four months, an actual outlay of upwards of $3,000 towards placing the said railway company and its franchises in a proper condition; that he did this in the best of faith, without attempting to obtain any advantage to himself, or to any other creditor of said railway company, excepting that all should share alike, and for those reasons, and those alone, and because of his inability to do anything at all within reason with the parties mentioned, or with said railway company and its affairs, because of the opposition indicated, he finally became satisfied of the futility of his efforts and requested the Detroit Trust Company, as trustee, under said mortgage, to commence foreclosure proceedings.

We cannot assent to the claim of complainants' counsel that the answer of said defendants Applebaum and Mitshkun admits the trust as alleged by complainants. Neither does the contract of October 10, 1906, between defendant Applebaum and Mr. Tarsney respecting the Hude bonds, create any such trust. Quoting from that contract there is this language:

"Said Applebaum agrees to use his best endeavors in bringing about a settlement of the affairs of the Detroit, Flint & Saginaw Railway; it being expressly understood, however, that the steps which he shall take, either as to the time or manner of settling the same, or in any other respects in regard thereto, are left solely to his discretion and judgment."

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