Baxter v. Washburn. to the company. The other defendants filed answers, and the holders of bonds came in by petition, and were permitted to answer and present their bonds. Such proceedings were had in the cause that a final hearing on the merits was had on the 1st of April, 1879. The chancellor was of opinion, and so declared, that the complainant was entitled to have the pro rata share of the bonds undisposed of, and still held. by the bank as collateral for Baxter's debt, in the trust fund applied as a credit on his notes given for the property at the trust sale, and that the other bonds were severally entitled to be paid pro rata out of the residue of the purchase money, and the holders of these bonds were required to come forward and file them in a given time. The court further held that the Drake Brothers were liable to Baxter for the value of the eighteen bonds wrongfully withheld by them, and that complainant was entitled to subject the pro rata share of these bonds in the trust funds to the satisfaction of this demand. The last sale made by the trustee was declared to be valid. It was referred to the master to take proof and report the number of bonds held by the various parties, the amount due thereon, the trust fund, and the pro rata of each bondholder therein after deducting the expenses of the trust. The clerk was also required to ascertain and report the value of the eighteen bonds on the 3d of April, 1872, with which the Drake Brothers were to be charged. The master made a report of the matters of reference, which was, with one modification in favor of Baxter r. Washburn. complainant, confirmed. He found that the eighteen bonds in the hands of the Drake Brothers were worth on April 3, 1872, sixty cents on the dollar, and the chancellor rendered a decree in favor of the bank for the use of Baxter against A. A. Drake for this value with interest, a judgment in the suit at law having been previously recovered against W. F. Drake, the other partner, for the bonds at the same valuation. The court also subjected the pro rata dividend of the eighteen bonds in the trust fund to the satisfaction pro tanto of the decree against Drake. The chancellor rendered a decree against complainant for the balance due from him on his purchase notes after deducting the pro rata on the bonds held by the bank for him, and the pro rata of the eighteen bonds held by Drake Brothers, and ordered that if the money was not paid into court within twenty days the property should, by virtue of the lien retained, be sold in satisfaction thereof. The proceeds of this decree were directed to be paid to the other bondholders in the proportion of the amount found by the report to be due them severally. Execution was awarded against Baxter and his surety, E. P. Bailey, for any balance of this decree not paid by the sale of the land and other property. The money not being paid, the property was sold, and brought $1,250. Afterwards, the bondholders, other than Baxter and the Drake Brothers, moved for a judgment against the complainant's surety on his injunction bond for the balance of the recovery against complainant after deducting the net sale of the property, and it was referred to the mas Baxter r. Washburn. ter to ascertain and report what damages had been sustained by reason of the suing out of the injunction. The master reported, at a subsequent term, the facts touching the suing out of the injunction, and that an execution had been issued upon the decree against Baxter and Bailey and returned nulla bona. The master found the damages to be the uncollected balance due upon the decree. The chancellor was, however, of opinion that upon the facts stated in the report no damages had accrued on the bond, and no judgment could be rendered against the surety. The defendant S. B. Lyon, one of the bondholders, appealed from this decree, "and all former decrees rendered in the cause," and the Drake Brothers have brought the case up by writ of error. The depositions taken by the Drake Brothers on their own behalf were, upon exceptions taken by the complainant in advance of the hearing, excluded for defects specified, and no error has been assigned on the chancellor's ruling in this regard. Excluding these depositions, there is ample evidence that the eighteen bonds were placed in the hands of Drake Brothers by the Exchange and Deposit Bank for sale, and that the bank, for the benefit of the complainant, was entitled to recover from them the value of these bonds, waiving the tort, by bill and attachment in equity: Kirkman v. Phillips, 7 Heis., 222; Baker v. Huddleston, 3 Baxt., 1. And the weight of evidence would be in favor of the finding of the chancellor even if the excluded depositions are read. For, the witnesses for the Drake Brothers, and the brothers themselves Baxter r. Washburn. prove that the bonds in controversy were sent to the Drake Brothers by the Exchange and Deposit Bank to be sold and the proceeds accounted for to the bank; that while the cashier of the bank and the agent of the mining company were both in New York, these bonds were entrusted to the agent of the company to raise money for the bank; that the negotiations for a sale of the bonds were made with the knowledge and assistance of the Drake Brothers, and that the bonds were then returned to the Drake Brothers. The cashier and the agent both testify that the latter handed the bonds to the former, and that he again deposited them with the Drake Brothers. The witnesses, whose depositions are excluded, do say that the bonds were returned by the agent. There is a conflict of testimony on this point, but the circumstances are all in favor of the version of the complainant's witnesses. The value of the bonds is to be estimated at the date of the conversion, and the evidence sustains the finding of the master, which was adopted by court by confirming the report. There is no error in so much of the chancellor's decree. The complainant in his bill asserts that his original contract of the 2d of May, 1870, with the Messrs. Wilcox and others was, at the request of the latter, cancelled, all the purchasers, except M. C. and E. K. Wilcox, surrendering all claim to the land and other property, and the two Wilcoxes, then the sole parties in interest, entered into the new contract of the 1st of June, 1871. These allegations are admitted in the answer of the assignee in bankruptcy of the Wilcox Baxter v. Washburn Mining Company, and by that company and the Wilcoxes in allowing the bill to be taken for confessed against them. These are the only parties who could put the facts in issue. In this view, the Wilcoxes and the mining company were one and the same in interest, and the agreement and trust conveyance of the 1st of June, 1871, were virtually one transaction, and so treated by all the parties. Clearly, therefore, the complainant would be entitled to the bonds of the mining company, deposited with the Exchange and Deposit Bank under the agreement, as collateral security for the purchase money due him for the property conveyed. And, if there were nothing else in the case, the security of the trust assignment would enure to his benefit to the extent of the bonds not sold to others. It is first insisted on behalf of the bondholder who appeals, that there is no proof that the mining company had anything to do with the transaction of the 1st of June, 1871; that it took the land conveyed by complainant and Bailey free from any lien for the purchase money; that it could not that it could not become security for the new purchase notes, and that the pledge of the bonds as collateral collateral was a misapplication of the corporate funds, ultra vires and invalid. Upon the question of fact raised by this argument, the record is in conflict with the position assumed. The Wilcox Mining Company is a party to the agreement of the 1st of June, 1871, the same being signed by its president, and the conveyance of the land and other property is made on the same day to the company, and |