The argument in support of the conclusion reached below is a simple one, and may be briefly stated thus: The only promise made by the defendant looking to a payment to Meddaugh & Driggs was conditioned on a sale to the English syndicate. That failed, and therefore the promise failed. The promise made by him in the second of the two agreements of April 9, 1877,—that agreement under which the matter was finally disposed of,—specified certain payments, but among them was none to the plaintiffs. In other words, he received the stock transferred to him burdened with certain express trusts. The plaintiffs were not named as beneficiaries therein, and therefore they can claim nothing by virtue of any express promise. In the foreclosure suits their services were antagonistic to the interests of the mortgage creditors, the parties to the agreements with Wilson. Nothing was charged against the property in their behalf in those suits. The mortgagees were under no obligations to them, because in that litigation they represented adverse interests. Thus, neither by express decree nor upon any principle of equity was the property, when purchased for the benefit of the mortgagees, burdened with a charge in their favor. Hence, not only was Wilson under no express promise to or for them upon which an action at law would lie, but also he received the stock free from any express or implied burdens in their favor. There was no trust attached to the property which they could enforce.

While this reasoning is direct and clear, there are considerations many and persuasive which show that equity will not be satisfied, nor will justice be done, unless and until the plaintiffs are admitted to a share in the stock transferred to the defendants. And first must be considered the situation of the parties at the time the decree was entered. The mortgagor had been thrown into bankruptcy, and Beaman and Jerome appointed as assignees. As such assignees they represented not merely the mortgage creditors, but all the creditors and all the stockholders in the company. It was no single interest which was committed to their care, but it was their duty, as assignees, to look after the interests of all having claims upon the property. Acting in good faith, as it must be supposed that they did, they conceived it their duty to defend the foreclosure suits, and to file a cross bill looking to the administration of the entire assets of the corporation. Their services in this respect not being to any party or parties, but in respect to the property itself, and to secure its proper application among all parties interested, it is clearly in accordance with settled rules of equity jurisprudence, as well as with the practice in bankruptcy proceedings, that compensation for their services, including the pay of their counsel, should be made a direct charge upon the property, and a charge prior in right to the claims of creditors or stockholders. 'It is a general principle that a trust estate must bear the expenses of its administration.' Trustees v. Greenough, 105 U. S. 527, 532. It is true that ordinarily the assignees in bankruptcy have possession of the property, and such possession adds to their cares as well as to their compensation. In this case they did not have possession, the property being already in the custody of the court through its receiver. But the lack of possession did not relieve them from all duty, nor destroy their right to compensation. The duty of looking out for the interests of all was as pronounced as though they had the actual possession, and the lack of possession was only to be considered in determining the amount of compensation.

It was in this situation of things that a decree was entered for the foreclosure and sale of the properties, without any express provision for their compensation. This decree was entered in pursuance of negotiations which had been for some time pending between the creditors and the representative of the corporation and its stockholders, in which the amount that the creditors would take in cash was agreed upon, and out of the difference between that sum and the amount which such representative was hoping to obtain from a proposed purchaser were to be paid all the expenses of the litigation. The representative was sanguine of the success of his proposed sale. The plaintiffs were doubtless affected with his confidence, and so accepted his promise to pay their compensation out of the moneys received from that purchaser, and waived any incorporation of an express provision therefor into the terms of the decree. But while as it seems, they were unduly sanguine, is it for a moment to be supposed that they were intending to donate their services in case the proposed sale should not be accomplished, or that the creditors or defendant understood that they so intended? The question carries its own answer. The case is not such as would arise if these plaintiffs had accepted an absolute promise from Dickinson or defendant in lieu of a charge upon the property provided in the decree. If, for instance, either had promised them absolutely to pay the $38,000, it might have been argued that they wholly waived any right to look to the property; were willing that provision for a charge thereon should be omitted from the decree, and were content to take the responsibility of such promisor. But here the promise was only a conditional one,—that, if a proposed sale was accomplished, out of its proceeds payment should be made. Evidently, confidence in the accomplishment of the proposed sale was so great that it was deemed unnecessary to provide for the contingency of its failure. But the unexpected did happen,—the sale failed. But their equitable right to have their charges paid out of the proceeds of the property did not cease. They would have been entitled, at any time before the final consummation of the foreclosure proceedings, to have had the decree modified, or an order entered making their fees a charge upon the property. These mortgage creditors and the defendant knew of the existence of the claims of the plaintiffs, and the amount thereof, and must, as a matter of law, be presumed to have known that they were properly charges against the property, and could, if need be, by express order be made a prior lien thereon. on. In this situation the trustees named in the creditors' agreement, one of whom was the defendant, became the purchasers of the property. They purchased it at the master's sale, knowing that these charges of plaintiffs, rightfully existing against the property, were only conditionally provided for. If the condition happened, and the contemplated sale to the English syndicate was made, then defendant, out of the moneys that would come into his hands, would pay their charges. This he had expressly covenanted to do. If the property was bought, and the condition never happened, can it be that he took the property free in equity from the burden of such charges? Suppose that the case was relieved from the embarrassment of conflicting testimony, and that the facts as claimed by the defendant were free from dispute. The decree was entered without any provision for the payment of fees of the assignees or their counsel, such omission being upon the conditional promise of Dickinson and the defendant. Suppose that thereafter, and before the sale under the decree, the creditors, the defendant, and Dickinson, finding that the negotiations with the English syndicate were going to fail, agreed and determined to say nothing to the plaintiffs about such failure, to let the decree stant without any provision for their compensation, to purchase the property in the same way that purchase had theretofore been contemplated, and then to divide it among themselves without making any provision for the plaintiffs, and that all this was carried into effect, the plaintiffs being ignorant of the changed condition of affairs and the altered purposes until after the stock had been distributed; can it be said that, under such circumstances, equity would be powerless to interfere,—that, if the plaintiffs were willing to trust the matter of their compensation to the conditional promise, the parties who made it and the parties interested in the property could, upon the failure of that condition, ignore their claims for compensation, and secure a title to the property discharged of all liability to them? If that be so, it would seem that equity lies under the imputation of sometimes preferring the form to the substance of things. Suppose that the second of the agreements of April 9th had never been signed, and that the creditors (sharing in the confidence apparently possessed by Dickinson and the plaintiffs in the successful carrying through of the pending negotiations) had stipulated for the purchase of this property by Man and Wilson, and the disposition of it only through the means of the proposed sale to the English syndicate, and that thereafter such proposed sale had failed of accomplishment; can it be doubted that Man and Wilson would hold the title in trust for their benefit, and for each of them according to his proportionate interest? Could they say, 'We took this property with an express promise to dispose of it in a certain way, and, because that way has failed, we hold it discharged of all liability?' Is the rule any different when these plaintiffs, who had a claim of equal equity against the property, come into court, and say that the condition expressly provided for has failed? Have they not the same right to be recognized, and paid out of the property? It is a cardinal rule of equity that it assumes that that is done which ought to be done; that it looks rather at the substance of rights than at the forms of proceedings. Unquestionably, when Man and Wilson, the trustees, purchased at the master's sale, the time for the completion of the proposed sale to the English syndicate not having then expired, they took the property burdened with an implied obligation to the plaintiffs. It was to be satisfied by the payment of money if the contemplated sale was carried through. This promise of Dickinson and the defendant to the plaintiffs was not a donation, a mere gratuity, something done out of the abundant kindliness of their hearts, but it was in discharge of an obligation equitably resting upon theproperty, and equitably resting upon the property, and

This is not the case of a stranger making a purchase, who might be justified in relying on what appeared upon the face of the record, and upon a purchase take the property free from all liabilities; for here the decree of the court, and the sale in pursuance thereof, were but steps in the schemes originated by the creditors with Dickinson and the defendant for the purpose of securing to themselves an absolute title, and one free from burdens.

But what was really the understanding and intent of the parties, and especially of the defendant? This is his testimony:

'Mr. Dickinson said to me that it might be necessary, in order to effect a sale, to pay some money to Meddaugh & Driggs, the attorneys for the assignees in bankruptcy, and to the assignees in bankruptcy, for their fees and expenses, which had been considerable, so that he might have to provide for them for the expenses and costs. Whether anything was said about fees as fees I do not recollect. He said, if the money came into my hands, as it was anticipated it might, I could very well afford to pay him whatever he had to pay them. I at first objected, and something was said concerning the amount which he would have to pay, and concerning the amount of their costs and expenses, and finally the sum of $38,000 was mentioned as being the amount of the costs and expenses of all the parties,—the assignees, and the attorneys of the assignees,—which was as much as he expected in any event to be called upon to pay, and immediately afterwards the same representations and statements were made by Mr. Theodore M. Davis in the same room, and I think at the same time. It was in New York. And then I said that I would agree, if the English negotiations went through, and the money secured by the agreement was paid to me, that out of that money I would pay to him whatever he had agreed, or should agree, or might have, to pay to Meddaugh & Driggs and the assignees in bankruptcy for expenses and costs, to the extent of $38,000. I do not recollect that anything was said about fees.'

This shows that the defendant, at the commencement, understood that this $38,000 was part of the costs and expenses of the litigation then pending.

The description of the claim as costs and expenses, and not as fees, is significant. It interprets the meaning of Wilson's express stipulation in the second of the two contracts of April 9, 1877, for he stipulates to pay 'the taxable costs in the suits and proceedings for foreclosure of said mortgages,'—not the taxed, but the taxable, costs. Strictly speaking, that which is allowed to trustees and counsel as compensation for their services is not a part of the taxable costs, and ordinarily those sums which they pay out for their personal expenses and other costs of the trial are included with their compensation in a gross allowance; and yet the money which they pay out for such costs and expenses may, if separately stated and charged, be not inaptly called part of the taxable costs. If this were the only matter throwing light upon the understanding of the parties, it might be said that this was a mere refinement as to the meaning of words; but immediately following the stipulation referred to is this language: 'Neither of said parties of the first or second parts shall, by reason of anything herein, be personally liable for or on account of any moneys procured, advanced, or used by said trustees in the purchase of said property, nor for any expenses or charges in or for the execution of the trust herein created.'

The trust herein created, as shown by the previous language of the agreement, and that made contemporaneously with it, was the purchase by the trustees, Man and Wilson, of all the property, the securing of a perfect title, the creation of a corporation, the conveyance to it of the property thus purchased, and the distribution of the stock, or, as the duty was expressed in the agreement:

'First. To the payment of the expenses and charges of said sale and purchase of said property, the establishment of said corporation, and the execution by said Man and Wilson and their said associates of the trusts hereby created.

'Second. To the repayment of any moneys by said trustees procured or advanced, and used in the purchase of, and payment for, said property, to the extent authorized and limited by said agreement of even date herewith.'

'To the payment of the expenses and charges of said sale and purchase of said property.' This means, of course, all the expenses and charges. All the express liens had passed into the foreclosure decree, and had been provided for in the agreement by specific appropriations of stock; and the scope of the general language here used was obviously to cast upon Man and Wilson, as trustees, the duty and the burden of removing every charge or incumbrance which in law or in equity could, as a consequence of the legal proceedings, rest upon the property. Such duty and burden passed, by the clear language of the agreement from Man and Wilson to Wilson, as the recipient of the residuum of the stock.

The parties of the first and second parts were respectively the creditors named and Dickinson. Upon them, by the provision above quoted, none of the expenses or charges of the execution of the trust were to fall. Necessarily, it follows that whatever had to be paid was to be paid by Wilson, and out of the stock which was coming to him as his portion. Nor is this strange. The sums which the creditors were to receive, whether in cash or in stock, by one or the other of the agreements, were for securities of the old corporation, whose form and amount were specified, and which were to be surrendered by them to the trustees, Man and Wilson. In other words, they agreed to receive a certain specified sum for the securities which they turned in, and the figuring as to the amount was, in most cases, carried to the very cent. While the consideration for the one-tenth transferred to Dickinson is not in terms expressed on the face of these contracts, it clearly appears from the testimony that it was the services rendered by him in bringing the litigation to a close, the equity of redemption belonging to the mortgagor corporation, and the satisfaction of claims in behalf of some of the stockholders. As for Wilson, there was no specific statement in detail as to items and amounts of all the consideration for the money or stock to be paid to him. Evidently, the odds and ends of closing out this transaction were to be thrown upon him. Dickinson and the creditors were to have so much stock absolutely; he was to take the remainder, pay out of it, or its proceeds, all that had to be paid to perfect the title and remove all charges and incumbrances upon the property, and the balance was compensation for his services and risk. So, the stipulation was that Dickinson and the creditors should be liable for nothing; and, as the scheme involved the entire settlement of the affairs of the corporation, it follows that Wilson was the party upon whom the residuary burden was cast. It is not strange, therefore, that the witnesses, speaking from memory as to what took place in the various negotiations, do not agree as to the items composing this residuum. It is not to be wondered that all the items were not named, or the amounts fixed; and hence naturally arises some contradiction in the testimony as to what was said and understood between the parties. The parties all looked to the defendant as the one to relieve them of all liability. He was, as may be said, the residuary legatee of all the burdens and expenses.

With reference to the obligation assumed by him in case the sale to the English syndicate was carried through, when asked what was to become of the balance that would remain in his hands after paying the creditors, and whether it was intended as a gift or otherwise, he testified:

'Out of that balance, whatever it was, I was to pay for receiver's certificates, for bonds, for trustees' commissions. I was to pay counsel fees to Alfred Russell, whatever they might be, and I was to pay $38,000 under and in pursuance of the agreement I had made with Dickinson of February 27, 1877, in reference to his obligation to Meddaugh & Driggs. Whatever was left was for my own compensation.'

And further, with reference to the same matter, appear these questions and answers:

'Q. In case there was a deficiency, and the balance which was expected to remain applicable to that purpose should not be sufficient to pay and discharge the whole amount of all of the several claims so provided for, by whom was the remainder to be paid?

'A. By myself. That was a responsibility and risk that I assumed.

'Q. If there should turn out to be an unexpended remainder of said balance after the discharge of all of said claims, what were you to do with such balance? Was it to be kept by you for your own benefit, or to whom was it to go?

'A. It was to be my own, for my own benefit.'

It is admitted that the written stipulation in the last contract did not express all that he agreed to do in consideration of the stock transferred to him. Thus he testifies, referring to that contract:

'A. I have stated what my liability was under that contract, and there were things undoubtedly to be provided for not specifically mentioned in that contract. For instance, no mention is made of receiver's certificates, or of bonds, or of stock. The trustees' commissions were provided for, I think; and there was no mention of my compensation.'

'A. There was no other written agreement to which I was a party, but it was understood that I was to pay or take care of certain bonds and receiver's certificates, and the claims that I have enumerated. The charges of the trustees, and compensation to them, were provided for in the agreement.'

And when asked between whom was that understanding, and when was it made, he answered:

'A. It was made before the agreement of April 9th, and was between the members of the syndicate, Mr. Davis individually, and myself.'

The written promise was therefore, by his own admission, not the full measure of his obligations.

In 1880 there was a congressional investigation, having reference mainly to the transactions of Davis as receiver of the Ocean National Bank. On that investigation the defendant was a witness, and testified as follows:

'As against the stock still in my hands there are outstanding claims—at least one, and perhaps more—on the part of persons who claim that they were employed by the syndicate, and that money is due to them, and that they are to look to me for it. One claim is made by Meddaugh & Driggs, who were counsel in the bankruptcy proceedings. They claim to be entitled to $34,000 [$38,000] for their professional services, and they have thereatened to bring suit against me for it. I do not think they are entitled to that under the agreement that was made with them, but, if there is any liability to them under that agreement with them which I signed, I am the person on whom it rests. It was for the purpose of providing for these contingencies that this amount was fixed in the way it was.'

'Q. Out of that $395,000 I understand that you were to pay the expenses of litigation, and whatever money was due Mr. Russell under his agreement with those people?'

He answered, 'Yes, sir.'

And still again, when asked for what he received the stock, after naming some things, he said: 'In addition to which was the liability that I came under to pay all the charges that any one had against this 'syndicate,' as it has been called.' Could language be used to more clearly affirm that his agreement was, as he understood it, to pay, among others, this claim of plaintiffs, which, as we have seen, was equitably a charge upon the property, and of course, therefore, against the syndicate?

Another matter: In the spring of 1878, Alfred Russell, whose name appears in the stipulation signed by the defendant, not having received the payment which he expected, prepared to commence a suit against defendant. The latter was advised of this fact, and on April 1, 1878, he wrote to him a letter containing this statement:

'My obligation, as I understand it, is to pay to you whatever stock you are entitled to under any agreement that you may have with the so-called 'syndicate.' You and Mr. Davis do not agree as to what that agreement was. I have no knowledge of it except as I learn of it from others. One thing, I believe, is admitted, and that is, if the English negotiations had gone through, of the $587,967 which was to come into my hands, $50,000 was to be paid to you in cash. The English negotiations did not go through, and no $587,967 came to me. Instead of that, the conditions of the agreement of April 9, 1877, take its place. Instead of $587,967, I am to receive $395,000, or so much of the capital stock as is the proportion between that sum and $1,600,000; that is to say, I now have $395,000 to pay to the same persons who were to have been paid $587,967.

'Are you entitled to receive precisely the same sum or amount of stock as if I had $587,967, or should you submit to a pro rata reduction, just as I and every one interested in the fund will submit to? My own opinion is that you are fairly entitled to the same proportion of the $395,000 that you were to receive of the 587 M., and should unhesitatingly say that such was your just due. If you were to receive the sum which I have already mentioned, I would not hesitate, on my own responsibility, and without the approval of any of the syndicate, to make a declaration of trust in your favor to the effect that you are entitled to the same proportion of the stock which I receive as you were to receive under the original agreement; that is to say, your share in the whole capital stock is diminished in the rate that 587 M. has to 395 M. This would be easily expressed in figures.' Herein is an express declaration, made within a year of the signing of the last agreement, that out of the stock received under that agreement he was to pay the same persons who were to receive payment out of the moneys which he would have received under the first agreement, and an argument therefrom that, as he was to receive under the latter agreement less than under the former, the parties to receive payment shoul proportionately scale down the amounts they should be satisfied with.

In the bill filed by Russell was a copy of a memorandum which he alleged had been made by Davis, the receiver of the Ocean National Bank, who was clearly, as shown by the testimony, a leading spirit in the negotiations, as follows:

100 bonds and 10 certificates.. $ 30,699. 09 2/3

Int. acc't since Jan. 1, 1871,

and certificates since May 8,

1874, other interests equal cost of. 24,470. 79 1/3

Int. on 50 bonds am't to prin. cost. 12,344. 63 1/3

20 certificates 12,136.16 call,

total for both................. 70,000. 00

Certificates par 10%, etc....... 76,000. 00

Bal. certificates and int., int. 10%. 63,700. 00

Man trustee Hubbell............. 10,500. 00

Frost, Sutherland, Birdseye &

McCarter, $5,000 each.......... 20,000. 00

---------------

Over.......................... $170,200. 00

Forward....................... $170,200. 00

Russell......................... 50,000. 00

Davis.......................... 115,000. 00

Meddaugh & Driggs............... 38,000. 00

Sundries, including said Wilson. 21,800. 00

--------------

Total......................... $395,000. 00

On August 2, 1878, the defendant wrote this letter:

'My Dear Mr. Russell:

'In the memorandum referred to in your bill, a sum appears which is to be paid to Meddaugh & Driggs, and which makes up, in part, the 395 M. which was to have been paid to me. I have rec'd, and now inclose, a copy obtained from Mr. Dickinson of my agreement with Meddaugh & D., from which you will see that I was to pay them only in the event of the success of the English negotiations and the payment to me of the cash. I send you this to show that the mem. could not have been intended to definitely fix the disposition of the stock that was to be issued to me. If that mem. is conclusive, then M. & D. have a right to a portion of the stock which I hold, and that liability I can never admit, because I never assumed it. I am willing to pay, and to act upon the assertion of your right to so much of the stock in my hands as I designated in a former letter. Have you anything to offer or suggest as to a method of settlement? Will you state [abate] anything of your first demand? I am very anxious that you should have your stock without any delay. Delay may be injurious to both. * * * Write to me at your convenience. Let us make an effort at adjustment before it is too late.'

Do not these letters tend to show that the claim now made that plaintiffs were not to be compensated out of the stock transferred under the last agreement to defendant was an afterthought, springing from the fact that the defendant had notied, or had his attention called to, the omission of their names in the stipulation in that agreement? How easily the defendant would be led to such a conclusion! His obligation was expressly to the 'creditors' syndicate,' (so-called) and Dickinson. His promise was to save them harmless. Whatever debt rested against the property, or could be made a personal obligation of their, growing out of the transaction, he was to discharge. The less he had to pay in this direction, the larger were his own profits. At first he recognized his liability to the plaintiffs,—spoke of it in the way that might be expected as one of the things that he had to take care of; but discovering himself, or having his attention called to, the omission of plaintiffs' names from the stipulation, he proceeded to insist upon his nonreliability for their claim.

Another matter throws light upon this. It appears that the corporation, as finally organized had stock of $4,000,000,— 40,000 shares of $100 each. The number of shares transferred to the defendant was 8,387 shares. Of these he issued and transferred, in satisfaction of various claims which he recognized, including those to Russell, 4,640 shares, leaving in his hands 3,747 shares, in respect to which he testifies: 'The remainder of the stock was owned by me, and I have issued no other shares except temporarily for use in borrowing money in my own private transactions.'

For what was this balance of stock given to Wilson? It must be remembered that these creditors were not claiming any general amounts. They figured to a cent the sums which each except the Ocean National Bank was to receive. Each, evidently, was anxious to secure for himself as much as possible. Negotiations were carried on for months, even into years. All the liabilities, conceded and doubtful, must have been known to them. Davis, the receiver, testifies: 'We knew how many bonds and receiver's certificates Mr. Wilson had and represented.' It is not to be supposed that they would throw away anything, or make generous donations to any one. While, of course, it was reasonable, and to be expected, that they would leave for the defendant, who assumed the general residuar liability, a margin above all obligations actually known, in order to compensate him for the risk, as well as to pay him for his services, it is not to be supposed that they were so ignorant of the situation—so misunderstood the real obligations growing out of their negotiations and foreclosure proceedings and all the litigation—as to give to him stock amounting, according to the value then placed upon it, to the sum of $175,000 and over. Evidently they understood, and he understood, that that surplus stock represented other obligations than those he has provided for. And, while he testifies to having purchased some receiver's certificates and bonds with his own money, he shows no investment in excess of a few thousand dollars. Indeed, the significance of the testimony in this respect is chiefly in its indefiniteness and omissions. As a witness in this case he testified that Mr. Girard and himself at first bought 40,000 certificates for between $25,000 and $30,000, and that the money that the two expended and paid into the hands of the receiver for bonds amounted to between $50,000 and $60,000 in cash. In the list of persons to whom stock was issued, he names Edwin Girard as receiving 1,026 shares. An entry made in his memorandum book at the time the receiver's certificates were purchased shows that one-half of the cash was paid by him, and one-half by Girard, and his statement of the manner in which the subsequent purchases were made indicates that such purchases were on their equal account. During the congressional investigation he was asked this question: 'Q. I want to get at how you came into possession of 3,694 shares of this valuable stock. What did you give for it?' To this he replied: 'I will give you the figures as nearly as I can. I got possession of that stock by paying, in the year 1874, $25,000, and between $35,000 and $37,000.' And then, after one or two intermediate questions,—there appearing to have been some interruption,—the question was again asked, 'For what did you receive this stock?' and his reply was: 'I am telling you. When you interrupted me I had gone so far as to say that it cost me $37,000, and the costs of the suit were $2,000 or $3,000 more, in addition to which was the liability that I came under to pay all the charges that any one had against this 'syndicate,' as it has been called.'

It may be noticed that the $25,000, which he here says he paid in 1874, was, as shown by the memorandum referred to, paid by Girard and himself in equal proportions.

Again, he testifies that, in fixing the amount of $395,000, $10,000 was estimated for his services, and $20,000 for those of the trustees, Man and Wilson, and it appears that Man received a certificate of stock of 203 shares as compensation for his services.

He testifies that 'the stock to Edwin Girard was for receiver's certificates and bonds which he and I had bought together,—40,000 receiver's certificates, $75,000 of bonds, and $10,000 of stock of the old corporation, my recollection is.'

Putting this testimony together, it will be perceived that he retained 3,694 shares as his own property. Girard received 1,026 shares on account of their joint purchases, and it is to be presumed that on like account he was entitled to the same number. 1,026 from 3,694 leaves 2,668 shares. If Man received 203 shares, he, as cotrustee, would be entitled to the same number, and for his subsequent services, according to his own statement of the estimate, another equal sum, or 406 shares for those two items. Subtracting that, there still remain 2,262 shares for which no satifactory explanation is given.

It is true that when asked what was included within, and covered by, the $395,000 in the last agreement, he testified as follows:

'A. $90,000, receiver's certificates; $40,000, trustees' commission; $160,000, stock and bonds; $50,000 to J. Boorman Johnston and Company or Gordon Norrie on account of bonds; $25,000 or $35,000, I do not remember which, to Alfred Russell; $10,000 to defray the expenses provided for in the agreement; and $10,000 for my compensation. That must have made Russell $35,000, if these figures are right.'

This shows $300,000 out of $395,000 for bonds, stocks, and certificates, but the application of the stock transferred to him shows no such proportionate disposition thereof for such purposes.

Another item of testimony is a memorandum said to have been made, during the negotiations prior to the signing of the last contract, by one who was present, as follows:

'What Davis must pay out of amo. which he receives on failure of English negotiations, viz., to Sept. 1, '75:

bonds (75 @ 43 M. & int.)........ $ 60,000

Probable amo. required for 79 certif.,

Probable amo. required for A. P.

say............................... 11,500

trustees, Birdseye, Sutherland, &

claimed........................... 25,000

Probable amo. required for Man &

court............................. 10,000

preparing bonds.................... 4,000

Probable amo. required for wagon-

road lands, 4,700 acres; T. M.

-----------

$395,000"

The last item therein is significant, especially taken in connection with the testimony given by defendant to the effect that, of the $250,000 going to the Ocean National Bank, only $150,000 represented stock and bonds, and $100,000 was for compensation of the receiver, Davis.

We must not be misunderstood as imputing to the defendant a lack of truthfulness, or suggesting that his testimony as false. On the contrary, his truthfulness doubtless compelled this very omission and indefiniteness. It does not seem reasonable that a man of the business capacity shown in these transactions by the defendant would have entered into any obligation of this character without knowing exactly, or nearly so, the items and amounts which he was to become charged with, and that if, in the settling up of the affairs, any item failed, wholly or in part, he would be able to disclose it exactly; and the fact that the testimony is so indefinite and unsatisfactory in these respects is additional reason for believing that it was part of the understanding of the parties that the plaintiffs were to be paid out of this stock transferred to the defendant.

We have, in our consideration of the case, thus far endeavored to eliminate all matters of conflicting testimony, and to determine what are the fair inferences from the undisputed facts. There is, in addition to this, the direct testimony of witnesses that this claim of plaintiffs was embraced in the matters provided for by this last contract. Still, we do not care to notice in detail that testimony, for it is contradicted by witnesses apparently equally reliable, and upon that conflicting testimony alone it could not be affirmed that the plaintiffs had established their case.

In conclusion on this branch of the case, we think it may be affirmed that the property was, in equity, chargeable with the claim of plaintiffs; that the charge was not incorporated into the decree by virtue of a reliance upon the conditional promise; that the defendant became one of the purchasers and interested in this property with full knowledge of the consideration and the equitable obligation to the plaintiffs; that the arrangement between the parties in interest and himself resulted in fixing the amounts which they should receive absolutely, and under no further liability for expenses or otherwise, while he, for the considerations named, assumed all the liabilities, fixed as well as unsettled, growing out of the perfection of the title to that property; that he at one time recognized this liability to plaintiffs as one of those assumed by him in this arrangement with the creditors and others interested, and that it still remains an undischarged obligation resting upon him, and is, in equity, a lien upon the stock of the new corporation in his hands.

We have thus far considered only the question of the fact of liability. Upon that is the stress of the case, and to it was devoted most of the testimony, as well as of the argument. Having reached the conclusion that the defendant is under obligations to the plaintiffs, there remains the further question as to the measure of such liability. On the one hand, it may be said that the amount of the plaintiffs' claim was, by agreement, fixed at $38,000, and that that was the sum which the defendant promised to pay in case the English negotiations were carried through. On the other hand, it is said that if those English negotiations had been carried through he was to have received $590,000 in cash, while under the arrangement as finally consummated he received stock representing only $395,000, and that, therefore, to that extent, the claim of plaintiffs should be scaled down.

We have heretofore referred to the fact that the evidence is unsatisfactory as to what was intended to be included within, and provided for by, these two respective amounts. There is testimony to the effect that, in arriving at the latter amount, those claims included in the former which did not represent cash, such as commissions to trustees, were to be reduced, though apparently not by any uniform ratio. Russell, who had a claim for $50,000 under the first arrangement, settled at a much less figure paid in stock. It may fairly be said that the plaintiffs have not proven that their claim was to be exempted from a reduction corresponding to that made in others of like character, and of course the burden is on them to make out their case. If it be said that the amount of $38,000 was agreed upon in the first instance, a sufficient reply is that that agreement was not made with the creditors, and was only in view of the proposed sale to the English syndicate. There is no testimony as to the real value of those services. Equity would seem to say that the claim of plaintiffs should be scaled down proportionately to the amount allotted to Wilson under the two contracts, which, as we figure it, would reduce the sum to $25,440. A majority of the court are of the opinion that, in view of the peculiar circumstances of the case, the plaintiffs should not be allowed interest. The decree of the court below must therefore be reversed, and the case remanded, with instructions to enter a decree in favor of the plaintiffs, awarding to them the sum of $25,440, and adjudging it a lien upon the stock of the Lake Superior Ship-Canal, Railway & Iron Company remaining in the hands of defendant.