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Argument for Appellant.

to take possession of the said leased property and to operate it until the amount due to the said Third National Bank of Chicago upon its judgment as aforesaid, with costs and interest thereon, and the amount, with interest thereon so paid by the Third National Bank of Chicago to the United States marshal for the Northern District of Illinois, to redeem from said sale to Albert Keep, is paid out of the earnings of said road, and for any other proper relief."

From this decree the Chicago, Milwaukee and St. Paul Railway Company appealed.]

Mr. E. Walker for appellant.

I. The cross-bill is not germane to the original bill, and the court erred in permitting it to be filed, and in overruling the.. plaintiff's demurrer thereto.

A cross-bill is a bill brought by a defendant in a suit against the plaintiff in the same suit, or against other defendants in the same suit, or against both, touching the matters in question in the original bill. It is usually brought, either to obtain a necessary discovery of facts in aid of the defence of the original bill, or to obtain full relief to all parties touching the matters of the original bill. Young v. Colt, 2 Blatchford, 373.

A cross-bill is a matter of defence, and is confined to the matters in litigation in the original suit. If it brings before the court other distinct matters and rights it is no longer entitled to be deemed a cross-bill, but is an original suit and no decree, founded upon such matters, would be made upon the hearing of the cause. Gallatian v. Cunningham, 8 Cow. 361; Walden v. Bodley, 14 Pet. 156.

It is treated as an auxiliary suit, or as a dependency upon the original suit. Slason v. Wright, 14 Vermont, 208; Cross v. De Valle, 1 Wall. 5. And can be sustained only on matters growing out of the original bill. Thompson v. Shoemaker, 68 Illinois, 256; Lund v. Skanes Bank, 96 Illinois, 181; Gage v. Mayer, 117 Illinois, 632; Daniel v. Morrison, 6 Dana, 182; Crabtree v. Banks, 1 Met. (Ky.) 482; Slason v. Wright, 14

Argument for Appellant.

Vermont, 208; Rutland v. Paige, 24 Vermont, 181; Ayers v. Carver, 17 How. 591; Pindall v. Trevor, 30 Arkansas, 249; Eve v. Louis, 91 Indiana, 457; Cartwright v. Clark, 4 Met. 104; Kemp v. Mackrell, 3 Atk. 812; Cross v. De Valle, 1 Wall. 5; Rubber Co. v. Goodyear, 9 Wall. 807; The Dove, 91 U. S. 381, 385.

No decree can be founded upon new and distinct matters introduced by a cross-bill which were not embraced in the original suit. May v. Armstrong, 3 J. J. Marsh, 260; S. C. 20 Am. Dec. 137; Daniel v. Morrison, 6 Dana, 186; Gallatian v. Cunningham, ubi sup.; Field v. Schieffelin, 7 Johns. Ch. 250; S. C. 11 Am. Dec. 441; Josey v. Rogers, 13 Georgia, 478; Andrews v. Hobson, 23 Alabama, 219; Gouverneur v. Elmendorf, 4 Johns. Ch. 357; Griffith v. Merritt, 19 N. Y. 529.

II. The amendment to the cross-bill filed by leave of the court after the hearing, and to support the decree, was not germane either to the original bill or the cross-bill, as originally filed, and, by the introduction of new and distinct charges and an additional and entirely new prayer for relief, introduced into the cause issues not contemplated in either the original bill or the original cross-bill, and the answers filed thereto, and the court therefore erred in permitting the amendment to be filed and in founding its decree thereon.

An amendment will not be allowed at hearing, and much less, after case is heard, which contains anything that will prejudice or surprise defendant, or that will in anywise change the issues. Moshier v. Knox College, 32 Illinois, 155; Farwell v. Meyer, 35 Illinois, 40; Hewitt v. Dement, 57 Illinois, 500, 502; Booth v. Wiley, 102 Illinois, 84, 100; Am. Bible Society v. Price, 115 Illinois, 623, 666; The Tremolo Patent, 23 Wall. 518, 527; Hardin v. Boyd, 113 U. S. 756; Snead v. McCouil, 12 How. 407; Oglesby v. Attrill, 14 Fed. Rep. 214; Land Co. v. Elkins, 20 Fed. Rep. 545.

If the courts below abuse their discretion in permitting amendments at hearing, their action will be reviewed. Jeffer son County v. Ferguson, 13 Illinois, 33, 35; Mason v. Bair, 33 Illinois, 194; Booth v. Wiley, 102 Illinois, 84, 100; Gordon v. Reynolds, 114 Illinois, 118, 123.

Opinion of the Court.

III. The cross-bill, as amended, is not germane to the original bill, and the court erred in founding a decree upon it as amended.

This proposition is, of course, supported by all the authorities cited under first proposition, and by the authorities cited under first branch of second proposition.

IV. The decree is not supported by the evidence.

Mr. Huntington W. Jackson and Mr. John H. Thompson for appellees.

MR. JUSTICE BREWER, after stating the case as above, delivered the opinion of the court:

Upon the facts can the validity of the decree requiring the Milwaukee Company to pay to the bank, within a specified time, the amounts of the two judgments held by it be successfully questioned? We think not. It would perhaps be diffi cult to point out any separate clause in the lease by which the Milwaukee Company obligated itself to pay the judgment in favor of the bank, and yet there is force in the contention that, taken as a whole, the instrument casts this burden upon the company. A part of the subject matter of the contract was claims against the Pacific Company. One recital is of the foreclosure debt; immediately following is one of the existence of claims, some of which had been sued on and passed into judgment and become liens, others still unliquidated ; followed by the recital that the purpose of this arrangement is the redemption from said foreclosure sale, and the protection of the property from all the aforesaid valid judgment liens. Narrowly, the valid judgment liens referred to may include only those already existing, mentioned in the preceding recitai; or, broadly all valid judgment liens perfected on the claims named in that recital, whether already in judgment or not. If these were all the provisions, the narrow construction might be preferred; but the further and express covenants of the· Milwaukee Company were to pay and discharge fully the proposed indebtedness of $3,000,000, and to return at the end of the

Opinion of the Court.

lease, to the lessor, the demised property. Does not this indicate that the understanding and intent were that the Milwaukee Company should discharge all judgment liens founded upon existing claims, whether such liens had already been perfected, or should be created in subsequent suit? A judgment after a lease does not of its own right defeat the lease, or deprive the lessee of his interest and possession; but it operates against the lessor, and whatever interest, great or small, is retained in the leased premises. The purpose of this stipulation was not the protection of the lessee, but of the lessor. It was not that the lessee should be able to retain and enjoy the possession during the terms of the lease; but that the property should be freed from all burdens, so that at the termination of the lease the lessor might retake and enjoy it. The scope of the contract was not the payment of the debts of the lessor, for a mere debt, never passing into judgment, casts no burden upon the interest of lessor or lessee in the property, and the removal of all burdens was apparently the intent of the contracting parties. But again, the express lien on the lessor's property amounted only to about $1,100,000; yet, by the arrangement, a new lien was created from which nearly $3,000,000 was received, all of which sum passed into the hands of the lessee. Will not equity, for the payment of the debts of the lessor, follow this surplus into the hands of the lessee? Can a corporation in debt transfer its entire property by lease, so as to prevent the application of the property, at its full value, to the satisfaction of its debts? Central Railroad v. Pettus, 113 U. S. 116, 124; Mellen v. Moline Iron Works, 131 U. S. 352, 366. We do not care to pursue an inquiry into this question at length, or consider what, limitations would surround this doctrine as applied generally, preferring to notice a single matter, which is significant and decisive. The contracting parties arranged not merely for the discharge of the foreclosure lien, but for the completion of the road for which the lessor's franchise was granted. The lessee not only performed these stipulations, but with moneys arising from the sale of these bonds built, for its own benefit, a bridge across the Mississippi River, connecting this road with its line

Opinion of the Court.

in Iowa, and thus making a continuous line of road to Omaha. Neglecting to pay the debts of the lessor, it appropriated a large amount of the proceeds of the trust deed upon the lessor's property to its own benefit, and the improvement of its own property. Here clearly was a diversion of funds, which the creditors of the lessor might follow in equity. This is only the application of familiar doctrine. The properties of a corporation constitute a trust fund for the payment of its debts; and, when there is a misappropriation of the funds of a corporation, equity, on behalf of the creditors of such corporation, will follow the funds so diverted. The Milwaukee Company, from securities on the property of the Pacific Company, received nearly three millions of dollars; part it used for the benefit of the lessor company, and part it appropriated to its own benefit. Can it do this, and let the lessor company's debt go unpaid? Equity answers this question in the negative, and such was the ruling of the circuit judge. 26 Fed. Rep. 820.

Entertaining no doubt upon these matters, we pass to the consideration of certain questions of equity pleadings and procedure and evidence upon which the counsel for appellant largely relies. It will be remembered that after its redemption from sale under the Tabor judgment, the bank, following the provisions of the statute, advertised the property for sale on the execution issued upon its own judgment. The railroad companies filed their bill in equity in the Circuit Court to restrain such sale. The bank, besides its answer, filed a crossbill, which, after setting out the facts, prayed that its judg ment might be decreed a valid equitable lien and encumbrance upon the property of the Pacific Company; that a receiver might be appointed, with power to apply the revenues to the judgment; and that the property be sold in satisfaction thereof, and for general relief. It is objected that such crossbill was not germane to the original bill, and was, therefore, improperly filed. The case of Railroad Companies v. Chamberlain, 6 Wall. 748, fully answers this objection. In that case a bill was filed to set aside the judgment. One of the defendants, owner of the judgment, filed a cross-bill, praying that the judgment might be decreed a valid lien, and the

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