Opinion — Kansas City Southern R. Co. v. Guardian Trust Co.

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KANSAS CITY SOUTHERN RAILWAY COMPANY

v. GUARDIAN TRUST COMPANY.

APPEAL FROM THE CIRCUIT COURT OF APPEALS YOR THE

EIGHTH CIRCUIT.

No. 85. Argued December 13, 14, 15, 1915.—Decided February 21, 1916.

A reorganization scheme adopted upon the foreclosure of a mortgage

of a railroad company and a purchase thereunder which provides

substantially for the stockholders of the company, but which makes

inadequate provision for its unsecured creditors, cannot be sustained;

and in this case, held, that the purchaser was chargeable with such

unsecured debts. Northern Pacific Ry. v. Boyd, 228 U.S. 482.

One owning both stock and floating debt of « company whose property

is under foreclosure and who assents to a scheme of reorganization

which does not on its face show that it unduly provides for the stock-

holders and does not. adequately provides for the unsecured creditors

is not precluded from sabsequeutly claiming that for such reason

the property is still chargeable after the sale with his unsecured

debt.

On the facts of this case, held, that the party attacking a reorganiza-

tion scheme as not adequately protecting unsecured creditors while

providing for stockhoiders was not barred by laches.

Even though reorganiza‘ion schemes must be framed so as to induce

parties interested to come in and furnish fresh money, and courts

should avoid artificial scruples in considering such arrangements,

substantial justice must be done and well settled rules of equity

must not be transgressed.

210 Fed. Rep. 696, affirmed.

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KANSAS CITY RY. ». GUARDIAN TRUST Co. 167

240 U.S. Argument for Appellants.

TuE facts, which involve the validity of a scheme of

reorganization adopted upon the foreclosure of a rail-

road company and a purchase of the same which provided

for the stockholders but left. its unsecured creditors

inadequately provided for, are stated in the opinion.

Mr. S. W. Moore and Mr. Samuel Untermyer for ap-

pellants:

The plan of reorganization is binding upon the Trust

Company because it actively participated in the plan and

greatly benefited by it in the exchange of its own securities

in the old companies for those of the Southern Company.

Equity will not permit the Trust Company to retain the

benefits of the plan and at the same time attack it as fraud-

ulent. It cannot claim both under and against the plan.

The application of the doctrine of “quasi-estoppel ”

or of estoppel by the acceptance of benefits is fatal to any

right of recovery on the part of the Trust Company.

Compton v. Jessup, 167 U.S. 1; Daniels vy. Tearney, 12

Otto, 415; Farmers’ Bank v. Groves, 12 Howard, 51; Gaddes

v. Pawtucket Institution, 80 Atl. Rep. 415; Inter. Con-

tracting Co. v. Lamont, 155 U. 8. 303; Loy v. Alston, 172

Fed. Rep. 90; North Ch icago R. R. v. Chicago Traction Co.,

150 Fed. Rep. 612, 626; Post v. Beacon Co., 84 Fed. Rep.

371; Sage v. Finney, 135 S. W. Rep. 996; Seminole Se-

curities Co. v. Southern Ins. Co., 182 Fed. Rep. 85; State v.

Bank, 95 N. W. Rep. 1116; Shackleton y. Baggaley, 170

Fed. Rep. 57, 59; Towers v. A frican Tug Co., L. R. 1 Ch.

1904, 558; United States vy. Hodson, 10 Wall. 395: United

Slates v. Morse, 218 U.S. 493; Winslow vy. Railroad, 208

U.S. 59; Wormser vy. Metropolitan St. Ry., 76 N. EB. Rep.

1036.

The doctrine of equitable election is a complete bar

to a recovery by the Trust Company. Codrington vy.

Lindsay, 8 I. R. Ch. App. 578, 587; Merchants’ Bani: V.

Sexton, 228 U.S. 634.

168 OCTOBER TERM, 1915.

Argument for Appellants. 240 U.S.

The doctrine of equitable estoppel is also a complete

bar to a recovery by the Trust Company. Bank v.

Heckman, 148 Indiana, 490; Canton Co. v. Rolling Miil,

155 Fed. Rep. 321; Farmers’ Trust Co. v. Railway Co.,

120 Fed. Rep. 1006; Fiske v. Carr, 20 Maine, 301; Gutz-

weiler v. Lackman, 23 Missouri, 168; Jacobs v. Lumber Co.,

158. W. Rep. 236; Jessup v. Hulse, 21 N. Y. 168; Kahn v.

Peter, 16 So. Rep. 524; Matthews v. Murchison, 15 Fed.

Rep. 691; Mitchell v. Mitchell, 61 Atl. Rep. 570; Olliver

v. King, 8 De G., M. & G. 110; Perisho v. Perisho, 71

Ill. App. 222; Rapalee v. Stewart, 27 N. Y. 310; Reagan

v. First National Bank, 61 N. E. Rep. 575; Richards v.

White, 7 Minnesota, 345; Smith v. Espy, 9 N. J. Eq. 160;

Symmes v. Union Trust Co., 60 Fed. Rep. 830; Thompson

v. Cohen, 127 Missouri, 215; Vose v. Cowdrey, 49 N. Y.

336.

Under the rule of the Boyd Case, 228 U. S. 482, the

Trust Company is not entitled to recover.

The Trust Company is barred from a recovery in this

action by its covenant that it would not hold the new com-

pany for the debts of any of the old ones. C., R. J. & P.

Ry. v. Howard, 7 Wall. 392; L. N. A. & C. Ry. v. Louisville

Trust Co., 174 U. 8. 674; Medill v. Snyder, 58 Pac. Rep.

962; Nor. Pac. Ry. v. Boyd, 228 U. S. 482; Stone v.

Cook, 179 Missouri, 534; Young v. Young, 27 Atl. Rep.

627.

The mortgage indebtedness of the Belt Company was

$1,000,000. It was sold at foreclosure sale for $1,000,000,

which the master found was the fair market value at that

time. Under these circumstances, the Trust Company,

as a creditor of the Belt Company, has not been injured

and has no right to complain.

A resulting trust was created in favor of the Railway

Companies paying for the properties deeded to the Cen-

tral Company, and this equitable interest passed under the

after-acquired property clauses of their mortgages. The

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KANSAS CITY RY. v. GUARDIAN TRUST CO. 169

240 U.S. Argument for Appellants.

Central Company acquired the properties subject to this

trust, and the interest of its stockholders was likewise

subject thereto. The Trust Company acquired the stock

of the Central Company with a knowledge of these facts,

and its equities, therefore, are subordinate to those of the

Southern Company. Albright v. Oyster, 140 U. S. 493;

Augusta Rd. Co. vy. Kittel, 52 Fed. Rep. 63; Bear Lake

Irrigation Co. v. Garland, 164 U.S. 1, 15; Central Trust Co.

v. Kneeland, 138 U. 8. 414; Condit v. Maxwell, 142 Mis-

souri, 266; Ducie v. Ford, 138 U. S. 587 ; Farmers’ Trust Co.

v. Denver R. R., 126 Fed. Rep. 46; Guaranty Trust Co. vy.

Atlantic &c. R. R., 138 Fed. Rep. 517; Lauter v. Trust Co.,

85 Fed. Rep. 894-903; McGourkey v. Toledo R. Co., 146

U. S. 536; New England Water Works vy. Farmers’ Loan

& Trust Co., 136 Fed. Rep. 521; Osborn v. Perkins, 122

Fed. Rep. 127, 131; Sanford v. Loan Society, 80 Fed.

Rep. 54; Toledo, Delphos &c. R. R. v. Hamilton, 134 U.S.

296; Wade v. Chicago R. R., 149 U. §. 327; Wade v. Se-

well, 56 ked. Rep. 129; Watson v. Bonfils, 116 Fed. Rep.

157.

Even if it should be held that the Trust Company has a

right of recovery, it should be limited to such equitable

terms as in the opinion of the court should have been

offered at the time of the reorganization.

There was no exception to the Master’s report in the

court below challenging the correctness of his finding that

the Southern Company was not liable for the floating in-

debtedness of the Belt Company. The decision of the

Court of Appeals that such finding can be reviewed in an

appellate court in the absence of exceptions is in conflict

with the decisions of the courts of appeal of other circuits

and with the rulings of this court. Brockett v. Brockett,

3 How. 692; Burns v. Rosenstein, 135 U. 8. 449: New

Orleans v. Fisher, 91 Fed. Rep. 574; Columbus R. R. Ap-

peals, 109 Fed. Rep. 117, 219: Coghlan v. South Car. R.

Co., 142 U. S. 101, 115; MeMicken vy. Perrin, 18 How.

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170 OCTOBER TERM, 1915.

Argument for Appellee. 240 U.S.

504, 587; Medsker v. Bonebrake, 108 U.S. 66, 72; Provident

Trust Co. vy. Camden Ry., 177 Fed. Rep. 854, 859; Sanford

v. Embry, 151 Fed. Rep. 977, 982; Sheffield Ry. v. Gordon,

151 U.S. 285, 290; Story v. Livingston, 13 Pet. 359, 366;

17 Ene. Pl. & Prac. 1047; 2 Foster’s Federal Practice,

§ 315; Topliff v. Topliff, 145 U. S. 156; 2 Street on Fed.

Eq. Prac., §§ 1476, 1486.

The action of the Court of Appeals is final so that an

application for certiorari at this time is not premature.

Beasley v. Tex. & Pac. Ry. Co., 191 U. 8S. 492; Denver v.

N.Y. Trust Co., 229 U.S. 132; Harriman v. Nor. Securities

Co., 197 U. S. 244; Merrill v. National Bank, 172 U. 8.

131.

Mr. Frederick W. Lehmann and Mr. George H. English,

Jr, with whom Mr. Edward P. Gates and Mr. Walter C.

Clephane were on the brief, for appellee:

The property of the Belt Company was a trust fund to

which the creditors were entitled in priority to the stock-

holders. Central Imp. Co. v. Cambria Co., 201 Fed. Rep.

811; Same v. Same, 210 Fed. Rep. 696; North. Pac. Ry. v.

Boyd, 228 U.S. 482.

The amount bid at the foreclosure sale of the Belt

property was no evidence of its value. Investment Regis-

try v. C. & M. E. R. Co., 212 Fed. Rep. 504; North Pac.

Ry. v. Boyd, 228 U. S. 482; $8, Art. 12, Const. Missouri;

§ 962, Rev. Stat. Missouri, 1899; Shickle v. Watts, 94

Missouri, 410; Moffit v. Hereford, 132 Missouri, 513;

Louisville Trust Co. v. Louisville Ry., 174 U.S. 674.

The plan of reorganization provided for the payment

of the debts of the old companies.

The estimate as to the floating debt was not intended

as a limitation upon the amount to be paid under the

plan.

The provision for the payment of debts made by the

plan was not limited by the interests of the bondholders.

Sate ee

KANSAS CITY RY. v. GUARDIAN TRUST CO. 171

240 U.S. Argument for Appellee.

There was no exclusion of creditors who were also bond-

holders and stockholders.

All the creditors save the Trust Company were paid

and the Trust Company was paid in part.

The Trust Company was entitled to enforce the provi-

sions of the plan as a contract made for its benefit. Second

National Bank vy. Grand Lodge, 98 U. S. 123; Johns vy.

Wilson, 180 U. 8. 440; § 1729, Rev. Stat. Missouri, 1909;

Meyer v. Lowell, 44 Missouri, 328; Beattie M fg. Co. v.

Clark, 208 Ibid. 89,

There was no covenant by the Trust Company that it

would not hold the new company for any of the debts of

the old. Webster v. Ins. Co., 53 Oh. St. 558; Hobbs v.

McLean, 117 U. §. 567; United States v. Cent. Pac. Ry.,

118 U.S. 235; Noonan v. Bradley, 9 Wall. 394.

The Trust Company was not barred as a creditor by

participating in the plan as bondholder and stockholder.

The Southern Company was liable as being a consolida-

tion of the old companies. See § 1059, Rev. Stat. of Mis-

souri, 1899; Leavenworth County v. Railroad, 134 U. 8.

O88; State ex rel. y. Lesueur, 145 Missouri, 594; Wells vy.

Electric Co., 108 Mo. App. 607; Barrie v. United Railways,

138 Mo. App. 557; Johnson v. United Railways, 247

Missouri, 326;C. S.F. & C. Ry. v. Ashling, 160 Illinois, 373;

Shadford v. Detroit Ry., 130 Michigan, 300.

The ‘Equitable Terms of Recovery” now suggested

by the Southern Company are very inequitable.

The lands of the Central Improvement Company did

not pass under the after acquired property clause of the

Belt mortgage. H umphreys v. McKissock, 140 U. S. 304;

Pardee vy. Aldridge, 189 U. §. 429; Smith v. McCullough,

104 U.S. 25; Railroad vy. Coffin, 50 Connecticut, 150; Dens-

more v. Railroad, 12 Wisconsin, 649.

Even though the exception to the Master’s report did

not formally and direetly challenge the correetness of his

finding, which was one of law, that the Southern Company

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172 OCTOBER TERM, 1915.

Opinion of the Court. 240 U.S.

was not liable for indebtedness of the Belt Company,

none the less in the circumstances of the case it was com-

petent and proper for the court to consider and determine

the question upon its merits. Guardian Trust Co. v.

Kansas City Southern Ry., 201 Fed. Rep. 811; Central

Imp. Co. v. Cambria Co., 210 Fed. Rep. 696; Sheffield Ry.

v. Gordon, 151 U.S. 285; 17 Enc. Pl. and Prac. 1048; 2

Daniel Chane. Pl. and Prac. 1314; Himley v. Rose, 5

Cranch, 313; Burke v. Davis, 81 Fed. Rep. 907; Celluloid

Mfg. Co. v. Cellulite Mfg. Co., 40 Fed. Rep. 476; Gordon v.

Lewis, 2 Sumner, 143; Brooks v. Robinson, 54 Mississippi,

272; Haymond v. Murphy, 65 W. Va. 616; Webster v. Cad-

wallader, 133 Kentucky, 500; Lehman v. Powe, 95 Missis-

sippi, 446; Von Phalen v. Winterbotham, 203 Illinois, 202.

There is no reason of law, policy or morals for preferring

stockholders to general creditors in the reorganization of

railroad properties.

Mr. Harry S. Mecartney, with whom Mr. Newell H.

Clapp was on the brief for intervening stockholders.

Mr. Justice Hotmgs delivered the opinion of the court.

This is an appeal from a decree in which the Circuit

Court of Appeals decided that the Guardian Trust Com-

pany as an unsecured creditor of the Kansas City Subur-

ban Belt Railroad Company was entitled to charge the

appellant for the Belt Company’s debt, because the re-

organization scheme, adopted upon a foreclosure of a

mortgage of the Belt Company’s property and a purchase

by the appellant, left the unsecured creditors inadequately

provided for while it made a considerable provision for

the stockholders in the Belt Road. Guardian Trust v.

Cambria Steel, 201 Fed. Rep. 811; 120 C. C. A. 121. 210

Fed. Rep. 696; 127 C. C. A. 184. See Nor. Pac. Ry. v.

Boyd, 228 U. 8. 482.

The facts are less complicated than the proceedings that

KANSAS CITY RY. vr. GUARDIAN TRUST Co. 173

240 U.S. Opinion of the Court.

have grown out of them. The Kansas City, Pittsburg and

Gulf Railroad extended from Kansas City to Port Arthur

on the Gulf of Mexico. It used terminals at Kansas City

belonging to the Belt Company above mentioned, and

companies in its control, and at Port Arthur belonging

to a Dock Company. All three were mortgaged and after

a default on the bonds of the Gulf Company in 1899 a

plan was made to bring the road and terminals into one

hand. The Gulf Company’s mortgage was to be fore-

closed and a new company formed which was to exchange

its own securities for the stock and bonds of the Gulf,

Dock and Belt Companies, making a new mortgage to

raise the necessary funds. The Gulf Company’s mortgage

was foreclosed, the appellant Company was formed, issued

its new securities, and in March and April, 1900, became

the owner of the Gulf road and of most of the stocks and

bonds of the old companies including the Belt Company.

In September, 1900, a suit was begun to foreclose the Belt

mortgage, and on December 31, 1901, it was sold for the

amount of its mortgage to the appellant. The Court of

Appeals thought it plain that the foreclosure was part of

the original plan; and as it also thought that the mortgaged

property was worth enough above the mortgage to pay the

unsecured creditors, it held that the stockholders when

receiving pay for their stock were receiving it in substance

as the proceeds of a transaction that removed all property

of the Belt Company from its unsecured creditors’ reach.

The appellant was the principal holder of the Belt Com-

pany stock, as well as the purchaser of its property with

notice of the outstanding debts, and therefore was de-

creed to pay the Trust Company’s claim.

The proceedings began with a creditors’ bill by the

Cambria Steel Company against the Belt Company and

the Guardian Trust Company to prevent the latter from

selling securities held by it for an alleged debt of the Belt

Company, the bill de ying the debt. The Court of

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174 OCTOBER TERM, 1915.

Opinion of the Court. 240 U.S.

Appeals thought that this suit was really a suit of the

appellant. The Cambria Steel Company has disappeared

and the proceedings have been carried on by the Belt

Company, the instrument of the appellant, and later by

the appellant, intervening in the suit, and all charging

that the Trust Company was indebted to the Belt. The

Trust Company, on the other hand, asserted its rights

and prayed judgment for its debt in its answer to the

Belt, although it failed to insert a similar prayer in its

answer to appellant. The ground of the appellant’s in-

tervention was that the Belt mortgage covered after-

acquired property, so that it was entitled to the securities

in the Trust Company’s hands unless the Trust Company

could make good its claim. On the other hand the decree

foreclosing the Belt mortgage expressly left open the right

of the Trust Company to contend that the appellant was

bound to pay the Belt Company’s unsecured debts.

The appellant attacks the conclusion of the Circuit

Court of Appeals upon several grounds. In the first place

it contends that the Trust Company is bound by the

plan because it was a party to it, exchanged its own Belt

Company stock in pursuance of it, was a depositary

under it and used all its influence to induce other stock-

holders and bondholders to come in. It asserts that the

plans contained an express covenant not to hold the new

company liable for the debts of the old one. It also asserts

that the property was not worth more than the mortgage.

We will consider these and some subordinate matters in turn.

The plan presented elaborate estimates of the funds

required. One item was “For present «tock [of the Kansas

City Suburban Belt Railroad Company] one-quarter of

a share of new preferred stock and three-quarters of a

share of new common stock of the company as reorganized

for each share of the present stock of those who may

deposit thereunder.” The Trust Company exchanged

its stock and it is said that by its retention of this benefit

KANSAS CITY RY, v. GUARDIAN TRUST CO. 175

240 U.S. Opinion of the Court.

it has precluded itself from claiming its debt. But the

plan also stated at the outset as one of the results to be

attained, “The payment of the floating debt and the

existing Car Trust obligations,” and at a later point it

allowed for payment of floating debts, $475,000, to come

from proceeds of the sale of first mortgage bonds and

preferred stock and payment of $10 per share by partici-

pating stockholders. It is true that the estimate turned

out to be much too small, but the plan did not on its face

give notice of an intent to prefer the Belt stockholders to

its creditors, and therefore the Trust ( sompany by assent-

ing to it and exchanging stock under it lost no rights.

What has happened is that, owing perhaps to unexpected

difficulties, the plan has not been earried out. The appel-

lant has no ground for complaining that the Trust Com-

pany has not tendered back its stock, which it took before

the foreclosure of the Belt Road was begun.

But it is said that the Trust Company covenanted not

to assert its claim because the agreement provided that

‘no right is conferred, nor any trust, liability or obligation

(except . . .) is created by this agreement or the

plan, or is assumed hereunder, or by or for any new com-

pany in favor of any bondholder or any other creditor

or any holder of any claims whatsoever against the said

companies, . . . with respect to any property ac-

quired by purchase at any foreclosure sale.’ It appears

to us that argument cannot make plainer the meaning

of these words. They exclude an obligation arising from

the instrument but neither purport to nor could exclude

rights of creditors founded on the facts to which we have

referred. Those rights were untouched and none the less

that this particular ereditor became a party to the agree-

ment because of its other interests that were concerned.

We may remark in this connection that we are equally

unable to find in the plan a contract in favor of the Trust

Company as an unsecured creditor. The plan sets out a

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176 OCTOBER TERM, 1915.

Opinion of the Court. 240 U.S.

general scheme that it was hoped would be worked out, but

its nature, the words quoted, and the authority given to

the committee for carrying out the plan to modify it and

to use their discretion all are inconsistent with the notion

of a promise that all unsecured debts should be paid.

As the claim of the Trust Company was put by the

Court of Appeals upon the equitable right of creditors

to be preferred to stockholders against the property of a

debtor corporation, it is essential to inquire whether the

appellant received any such property, that is whether it

got by the foreclosure more than enough to satisfy the

mortgage, which was a paramount lien. The Master

found, as he expressed it, in the absence of proof to the

contrary, that the amount for which the property was

sold, $1,000,000, the amount of the mortgage, was its

fair market value. Although the evidence was not re-

ported the Circuit Court of Appeals was of opinion that it

sufficiently appeared that there was a valuable equity.

The argument for the appellant assumes that the different

conclusion was reached while leaving the Master’s finding

to stand. But the decision rather lays that finding on

one side upon considerations that may be summed up in

a few words. The allowance made for the Belt Company’s

bonds shows that they were regarded as well secured.

The stockholders of the Gulf Company in their exchange

paid ten dollars a share for stock of the appellant received

by them. Therefore it must be assumed that the stock

of the appellant was worth at least that amount. There-

fore the $4,750,000 of that stock given for the Belt Com-

pany’s stock was worth at least $475,000, and probably

more. But the value of this stock depended on the value

of the Belt Company’s property above the mortgage.

It appears to us that while perhaps not justifying definite

figures, the reasoning warrants the belief that there was

an equity for which the appellant must account.

The appellant urges that the foreclosure sale is to be

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KANSAS CITY RY. v. GUARDIAN TRUST CO. 177

240 U.S. Opinion of the Court.

treated as a distinct transaction—that after it had become

the owner of the greater part of the bonds and stock of

the Belt Company it was free to do as it pleased. If it

had simply kept the stock it would have incurred no

liability to creditors of the Belt Company and an inde-

pendent foreclosure would put it in no worse place. But

the ownership of the Belt Road by the new company

was contemplated from the first and although no fraud

on creditors was suggested or intended in the plan, still

the Court of Appeals was justified in regarding the whole

proceeding as one from the start to the close and in throw-

ing on the appellant the responsibility of so carrying it

out as to avoid inequitable results.

It is said that the Trust Company is barred by laches:

that the appellant took possession on January 1, 1902,

and that the Trust Company did not assert. its claim

until 1905 in this cause; that it knew and was intimately

connected with every step of the reorganization and was

silent at a time when its conduct would influence others,

as the successful assertion of its claim would have de-

pressed the market value of the appellant’s stock and

bonds. But the Trust Company set up its claim in this

suit in answer to the Cambria bill on November 5, 1900.

The very ground of the bill was to prevent the Trust

Company from selling securities to satisfy the claim as

it had given notice that it intended to. The company

tried to become a party to the Belt foreclosure and did

succeed in saving its rights from prejudice. When later

the Belt Company and the appellants came into this suit it

set up its claim again. Without going into further detail

we are of opinion that the Trust Company is not barred.

Some technical objections may be left pretty much

upon the decision below. 210 Fed. Rep. 699. It is ob-

jected that the liability of the appellant is not open be-

cause the exception to the Master’s conclusion against

it was put upon other grounds than the merits, but we

178 OCTOBER TERM, 1915.

Opinion of the Court. 240 U.S.

see no reason to doubt that the Court of Appeals was right

in thinking that justice would be done by adopting the

course that it did. So it is said that the appellant was

induced by the form of the exceptions to forego reopening

the Master’s finding that the Belt Company was indebted

to the Trust Company. But it is not to be believed that

the appellant has given up anything that it thought

worth insisting upon. 210 Fed. Rep. 700. So as to the

absence of a specific prayer for relief in the Trust Com-

pany’s answer to the appellant’s intervention in its own

name. In short while it is true that reorganization plans

often would fail if the old stockholders could not be in-

duced to come in and to contribute some fresh money,

and that the necessity of such arrangements should lead

Courts to avoid artificial scruples, still we are not pre-

pared to say that the Court of Appeals was wrong in find-

ing that there had been a transgression of the well settled

rule of equity in this case, or that it went further than to

see that substantial justice should be done.

There is a motion to dismiss upon which in view of our

decision the defendant in error would not desire to insist,

and on the other side a petition for certiorari in case its

appeal should be dismissed. In the circumstances the

distinctions become of little importance. But the Cambria

bill asserted a lien under the judgment of a Federal court

and the petition of the appellant asserted title under a

decree of a Federal court, so that the decree may be af-

firmed upon the appeal. Cooke v. Avery, 147 U.S. 375.

Commercial Publishing Co. v. Beckwith, 188 U. S. 567,

569. The case has been so fully discussed below that we

think it unnecessary to go into further detail.

Decree affirmed.

Tue Cnier Justice and Mr. Justice VAN DEVANTER

are of opinion that upon the findings of the Master the

decree should be reversed, and therefore dissent.