Goodnow v. Grayson, Adm'r, etc. change of citizenship would not have affected the jurisdiction that had already attached. If, then, Mrs. Litchfield, by removing to Iowa, would have terminated the right of removal, should not the same result follow if the party who is substituted for her and succeeds to her rights is a citizen of Iowa? Viewing the question in the light of the position taken by counsel for the administrator, i. e., that the administrator succeeds to and stands exactly in the place of the decedent, it still seems to me that when the administrator asks to remove the cause, the court must consider the question in the light of the facts as they now exist, and that in this view, as already stated, it must be held that the party to the suit had removed from New York to Iowa, and that it makes no difference whether such removal took place during the life-time of Mrs. Litchfield, or after her death, by substituting in her place a citizen of Iowa. The fact in either case would be the same, to wit, that the application for removal is made by one who is a citizen of Iowa, and being such, a removal cannot be had at his instance under the act of 1867, as the right under that act is restricted to non-residents. If, however, the question is to be determined by the citizenship of the parties to the record at the time the administrator became a party to the record, which position is sustained by our view of the ruling in Relfe v. Rundle, supra, and also by the case of Burdick v. Peterson, 2 McCrary, 135 [S. C. 6 Fed. Rep. 480], the same result follows, as the administrator was then a citizen of Iowa, and hence could not remove the cause under the act of 1867. Under either view, Grayson did not possess the right of removal under the act of 1867 at any time, and hence the cause could not be removed to this court under that act. The motion to remand must therefore be sustained. Credit Company of London, Eng., v. Arkansas Cent. R. Co. and others. CREDIT COMPANY (Limited) OF LONDON, ENGLAND, v. ARKANSAS CENT. R. Co. and others. (Eastern District of Arkansas. October, 1882.) 1. RAILROADS - RECEIVER-CERTIFICATES OF INDEBTEDNESS - REPAIR OF ROAD.-A court of equity may authorize the receiver of a railroad to issue certificates of indebtedness and make them a first lien upon the road, for the purpose of raising funds to make necessary repairs and improvements, but it is a power to be sparingly exercised; and when the road cannot be kept running without its exercise, except to a very limited extent, the sound practice is to discharge the receiver or stop running the road and speed the foreclosure. 2. SAME - DUTY TO BUILD ROAD.- It is not a judicial duty to build railroads, and the assent of all the parties interested in the property cannot make it one, and there is no difference in principle between a court building a railroad by the issue of receiver's certificates, and making extensive and general repairs and betterments, approximating the original cost of construction by like means. 3. RAILWAY MORTGAGE - BENEFICIARIES BOUND.-In the absence of fraud the beneficiaries in railway mortgages are bound by what is done by their trustee. 4. RAILROAD BONDS - FORECLOSURE.- Where a holder of railroad bonds alleged the trustee had filed a bill and obtained a decree of foreclosure for the principal of the bonds not due, as well as for the interest which was due, without the written request of the holders of one-third in amount of the bonds, which it was claimed was a necessary prerequisite by the terms of the mortgage to the exercise of the power to declare the principal debt due, and sought for this reason to avoid the foreclosure proceedings, held, (1) that it was competent for the trustee to file a bill to foreclose for the interest due; (2) that the plaintiff ratified the action of its trustee by filing and proving in the master's office, in the foreclosure proceedings, more than one-third in amount of all the bonds issued; and (3) that the absence of such a requisition did not affect the jurisdiction of the court, and a decree for a larger sum than was due was error merely, to be corrected on appeal, and that as the error was one of which the trustee could not complain, and there was no fraud, the bondholders were as much bound as the trustee, and could not avoid the decree, on this ground, in any form of proceeding. 5. SAME.-EFFECT OF LACHES.-The effect of laches is not avoided by a general averment that the plaintiff was ignorant of the facts until a short time before the bill was filed. A general allegation of igno Credit Company of London, Eng., v. Arkansas Cent. R. Co. and others. rance at one time, and knowledge at another, is of no effect. If the plaintiff made any particular discovery, it should be stated when it was made, what it was, how it was made, and why it was not made sooner. 6. SAME FORECLOSURE-SALE UNDER.— - When the property of a railroad company is sold under a decree of foreclosure, at which all persons are authorized to bid, the fact that it is purchased by the president of the company in his individual right will not in itself raise a trust relation between him and a holder of the bonds of the company which will entitle the latter to treat him as a trustee of the property so purchased. 7. SAME-PURCHASER AS TRUSTEE. - One claiming the right to avoid a purchase made by another at a judicial sale, or of treating the purchaser as a trustee, and availing himself of the purchaser's bid, cannot delay the assertion of this right to enable him to decide in the light of subsequent events whether he would or not be profited by its assertion. 8. PLEADING-LACHES NEED NOT BE PLEADED.- Laches need not be pleaded. If the cause as it appears on the hearing is liable to the objection, the court will refuse relief without inquiring whether there is a demurrer, plea or answer setting it up. In equity. CALDWELL, District Judge.-The Arkansas Central Railroad Company was formed for the purpose of constructing a railroad from Helena to Little Rock, with a branch to Pine Bluff. The chief ultimate promoters of this enterprise were Stephen W. Dorsey and J. E. Gregg. Dorsey was the president of the company, and its financial agent and manager, and generally controlled and conducted all the affairs of the corporation. What is commonly called an exhaustive contract was entered into between the company and J. E. Gregg & Co. for the construction of the road, by the terms of which Gregg & Co. were to build the road for all its stock subscriptions and other assets, and a majority of its stock. The directors of the railroad company and all its officers, except the president, seem never to have had more than a mere nominal existence after the making of this contract. Credit Company of London, Eng., v. Arkansas Cent. R. Co. and others. From that time Gregg & Co. were regarded as owners of the road, and its assets in hand, as well as all that might thereafter be acquired. Dorsey was a member of this firm also, and in the double. capacity of president of the railroad company and a member of the firm of Gregg & Co. he seems to have managed the financial affairs of both. The company executed a mortgage to secure its first mortgage bonds, which were put upon the market and sold to the amount of $720,000. The defendant, the Union Trust Company of New York, was the trustee in this mortgage. Dorsey went abroad to effect a sale of the bonds, and succeeded in placing most of them in London and Amsterdam. By the fall of 1872, forty-eight miles of the road, which was a narrow gauge, had been completed in an imperfect manner. The work of construction was never resumed after that date. About this time Dorsey engaged actively in politics, and having been elected to the United States senate in the early part of 1873, and the assets and resources of the railroad company having been exhausted, he and the firm of J. E. Gregg & Co. soon ceased to take any further interest in the enterprise; and the defendant Johnson, who had at the solicitation of Dorsey invested some money in the concern of J. E. Gregg & Co., was elected president, and had the control and management of the road and the affairs of the company from that time until the commencement of proceedings to foreclose. The company had neither resources nor credit, and the earnings of the road were barely sufficient to keep it running, without making needed repairs and improvements. The construction of the forty-eight miles of road seems to have absorbed the proceeds of the $720,000 first mortgage bonds of the company, and of state aid and state levee bonds, and county and municipal subscriptions, amounting in the aggregate to some $2,000,000. The company was hopelessly insolvent. No interest was Credit Company of London, Eng., v. Arkansas Cent. R. Co. and others. paid on its first mortgage bonds, and on the twentieth day of September, 1876, the trustee filed a bill in the United States district court at Helena, then in the western district, to foreclose the mortgage. The bill alleged that the holders of one-third in amount of the bonds had requested the trustee to foreclose. A receiver was appointed, upɔn whose application Judge Parker authorized the issue of receiver's certificates to the amount of $75,000, to make necessary repairs and improvements on the road. Between the date of this order and the next term of the court, Helena was transferred to this district, and the judge of this district rescinded the order authorizing the receiver to issue certificates. The rescinding order was not made because the road did not stand in need of repairs. It was notoriously true that its condition was such as to make it dangerous to life and property to run cars over it; ties were rotten, iron worn out, rolling stock in bad condition, bridges insecure, culverts washed out, and the road-bed in many places too low, resulting in overflows of the track and stoppage of trains. No repairs nor betterments had been put upon the road since it had been built. It seems to be settled that a court of equity has the power in this class of cases to authorize its receiver to issue certificates of indebtedness, and make them a first lien upon the road, for the purpose of raising funds to make necessary repairs and improvements. Wallace v. Loomis, 97 U. S. 146, 162; S. C. 2 Woods, 506, under title, Stanton v. Alabama & C. R. Co. But it is a power to be sparingly exercised. It is liable to great abuse, and while it is usually resorted to under the pretext that it will enhance the security of the bondholders, it not unfrequently results in taking from them the security they already have, and appropriating it to pay debts contracted by the court. The history of Wallace v. Loomis, supra, furnishes an instructive lesson on this subject. This court has uniformly refused to arm its receivers with |