of the company exclusive of bonded indebtedness as it stood on the first day of the preceding month, and also that if any default whatever should be made in any of the covenants or agreements and provisions in said deed, and if such default should continue for 30 days after the same occurred, then at the option of the holder of any of said bonds after the expiration of 30 days, without notice to said company or its successors or assigns, might declare the whole of said indebtedness due and payable, and file a bill to foreclose said trust deed in any court having competent jurisdiction, and out of the proceeds of any such sale there should be paid reasonable attorney's fees for the complainants in such suit. It will be noted that John A. Ryerson, who was one of the directors of the company, was also one of the holders of the preferred stock, the trustee in said trust deed, and was charged with carrying out the provisions of said agreement between the company, the holders of preferred stock and himself as trustee. Further, in pursuance of the terms of said agreement, the holders of said preferred stock paid to said Ryerson as trustee $27,666.68 in cash, and assigned their certificates of stock to the company which are now in the possession of the com pany. Of the said second mortgage bonds delivered to said Ryerson he distributed $55,000 among said preferred stockholders, $27,333.32 on account of said stock and $27,666.68 for said cash advanced. The remaining $2,000 of said bonds are still held by said Ryerson and have never been issued. The owners of the common stock on July 8th, 1892, to wit: The said Russell, Peters and Dunlevy, in writing, ratified, confirmed and consented to the foregoing contract. The provisions of this contract were carried out by said Ryerson, except that he had in his hands $162.62 to be paid on certain debts of the company named in said agreement, and the further sum of $602.13 which was applied and credited on the principal of the said bonds under said contract. The company made default in its payments of installments of interest on said bonds becoming due September 1st and October 1st, 1892, respectively and also failed to make the statements of receipts, expenditures and financial condition each month after the date of said trust deed, as required thereby, and by reason of said defaults on November 4, 1892, the complainants, the then owners of said second mortgage bonds, under the terms of said trust deed, and after default in payment of interest due on November 1st, 1892, elected to and declared all said bonds due, and directed said Ryerson to file the bill in this case, which was done in the names of the bondholders and said trustee the same day. Prior to July 8th, 1892, said Russell, the then owner of 592 shares of the common stock of said company, had hypothecated the same with divers parties as collateral security for advances made to him. The persons holding said hypothecated stock did not consent to the agreement and trust deed of July 8th, 1892. The intervening petitioner, William P. Porter, is the owner of five shares of said common stock and makes the same defense to the complainants' bill herein as is made by the company. In this court on November 18, 1892, the complainants, Havemeyer and others, obtained judgment by confession upon ten of said bonds under the power of attorney in said bonds contained for $10,308.05 and costs. Quigg & Bentley, solicitors for complainants. WINDES, J.: It is contended for the defendants that said Ryerson made wrongful payments in several instances in the disbursements of the cash paid to him by the preferred stockholders under the agreement of July 8, 1892, but after full consideration of the evidence, the master's report and arguments of counsel, the court sees no reason to conclude differently from the master in regard to those payments, and is of opinion that all said payments were rightfully made. It follows that if all the payments made by said Ryerson under said agreement of July 8, 1892, were rightfully made, then the statement above made by the court, that there was a default in the payment of the interest due on said bonds, is also well founded, unless the balance of $602.13 left in the hands of the trustee, Ryerson, should have been applied upon interest, the interest then due being less than that amount, instead of upon the principal of said bonds. This sum was properly applied to the principal of said bonds because the agreement of July 8, 1892, by a fair construction of its provisions, provides that any surplus remaining after the disbursements provided for by said contract should be divided among the parties contributing to the fund placed with said Ryerson. As to the default of defendant, above stated by the court, in failing to make the statements of its receipts and disbursements, and a detail of its indebtedness, the court is of opinion. that this was a material and important provision of said trust deed when considered in connection with the nature of the property conveyed by said trust deed and the business of the company, and the complainants were, under the evidence in the record and finding of the master, entirely justified in their action by reason of the default of the company in this record, in declaring the principal of said bonds due and directing the foreclosure of said trust deed. The court has deemed it unnecessary to go into any discussion of the evidence as to the solvency of the defendant corporation or the payments made by the trustee under the agreement of July 8, 1892, or the default of the company in payment of interest or making statements, but has considered it sufficient to state only the conclusions arrived at after full consideration, which has been done. Great stress has been laid by counsel for defendants upon the remarkably complicated relations sustained by the complainant, John A. Ryerson, to the parties in this case. He was a director of the defendant corporation, the representative of the preferred stockholders, himself also a preferred stockholder, in one instance, at least, the attorney of the corporation in litigation prior to the commencement of this suit, and the trustee and agent of the corporation and preferred stockholders during a period of about one year prior to the filing of this bill, and also for a time one of the company's solicitors in this case. It must be admitted that this complication and blending of apparently inconsistent and diverse interests are such as are calculated to cause the court to look with scrutiny at Mr. Ryerson's testimony, which has been done; but inasmuch as all his acts appear to have had the approval of the other directors of the Bordeaux Company, and in conformity to the agreement of July 8, 1892, unless it be in the matter of the amount of attorneys' and trustees' fees, there being no proof of fraud, it seems to the court there is no sufficient foundation in the record to justify it in holding that any of the payments made by him except such as have been corrected, were improperly made. The payments made for these fees appear to be reasonable under all the circumstances shown. Even if these payments were held to be wrongful the only effect would be, under the agreement of July 8, 1892, to reduce the amount of complainants' claim. That Mr. Ryerson should claim one-half the fees allowed to complainants' solicitors in this case seems rather remarkable, but that claim should not prejudice complainants' rights in any way, especially since these rights are not dependent upon Mr. Ryerson's testimony. There remain but two principal questions to be considered, as follows: First. The validity of the preferred stock. Second. The validity of the contract of July 8, 1892, and the exchange of the preferred stock for bonds. The textbooks, it is true, state as a general rule, that to enable a corporation to issue preferred stock it must have authority by statute, or its charter. Cook, Stockholders (1st Ed.) sec. 268; 2 Beach, Private Corporations, sec. 498. It is argued that under these authorities, and because there is no authority given by the charter of the Bordeaux Company, or by our statute, therefore the act of the company in issuing preferred stock is void. The later edition of Mr. Cook on Stockholders, section 267, as also Mr. Beach, section 500, say, in substance, that there is no principle of law which forbids the issuance of preferred stock if all the stockholders give their consent. This seems to the court to be reasonable and in accordance with the decisions of the later cases and text writers. Morawetz, Corporations, sec. 464; Harrison v. Mexican Railway Co., 44 L. J. Ch. 403; Hazlehurst v. Savannah, etc., Ry. Co., 43 Ga. 13; Lockhart v. Van Alstyne, 31 Mich. 76; Branch v. Jesup, 106 U. S. 468; Warren v. King, 108 U. S. 389. Besides this, if there was a want of power to issue preferred stock, the proof in this case that all the stockholders consented to making this preferred stock, and agreed to its issuance in payment for a valuable leasehold worth at least its face in cash at the time, and now worth many thousands of dollars in excess of that sum, would make it highly inequitable for the corporation now to claim the benefit of this leasehold, as it does, and claim that the consideration paid for it was worthless at the time. By the plainest principles of equity there is an estoppel against the corporation from making any such claim. Hazlehurst case, supra. Cook, Stockholders, sec. 267, and 500. C., R. I. & P. R. R. Co. v. Joliet, 79 Ill. 25; Darst v. Gale, 83 Ill. 136 and cases cited; City of East St. Louis v. East St. Louis, etc., Co., 98 Ill. 415; P. & S. R. R. Co. v. Thompson, 103 Ill. 187. That there appears to be nothing in the statutes in this state which in express terms authorizes the issuance of preferred stock, the court does not deem important, in view of the foregoing conclusions and authorities, and has therefore not mentioned in detail the arguments of defendant's counsel in that regard. As to the next question, the validity of complainant's bonds received in exchange for the preferred stock, it should be noted that this stock was entitled to a cumulative dividend of eight per cent per annum from May 1, 1891, before any dividend should be paid on the remaining stock of the company, and in case of a sale of the property of the company was en |