to consider whether those proceedings were regular; it is enough that the circuit court actually exercised jurisdiction over that matter, as a matter involved in the case between the mortgage trustees and the mortgagor.

What is the present status of the cause in which that jurisdiction was exercised, as disclosed by this bill? I have pointed out that it discloses no further proceedings after this order of the 25th June, 1873. It is plain that in the absence of any such showing it must be assumed by this court that no further proceeding has in fact been had in that cause. Did the order referred to determine and end that cause, or is it still pending?

On looking into that order we find that it authorized a transaction which is not even alleged to have been completed. It provided for a future payment of money, and for such extensions of time for the performance of covenants on the part of this defendant, as the grantors in the deed should agree upon in writing. It is not shown that those covenants have been performed, or that such extensions of time have not been agreed on; but it is alleged that the money payment has not been made. In a word, so far as this bill informs this court, that transaction is still in process of execution. It would seem that even the matters covered by that particular order have not passed beyond the supervision and control of the circuit court. It must be held, then, by this court, that the suit of the mortgage trustees, the trustees of these complainants, is not concluded, but is still pending. We have next to consider the relations of these complainants, as bondholders and cestuis que trust, to such a condition of that case.

The relation of beneficiaries to the proceedings of their trustees was stated by the Supreme Court of the United States in Kerrison v. Stewart, 93 U. S. 160. "It cannot be doubted," said the court, "that, under some circumstances, a trustee may represent his beneficiaries in all things relating to their common interest in the trust property. He may be invested with such powers and subjected to such obligations that those for whom he holds will be bound by what is done against him, as well as what is done by him. The difficulty lies in ascertaining whether he occupies such a position, not in determining its effect if he does. If he has been made such a representative, it is well settled that his beneficiaries are not necessary parties to a suit by him against a stranger to enforce the trust; or to one by a stranger against him to defeat it in whole or in part. In such cases the trustee is in court for and on behalf of the beneficiaries; and they, though not parties, are bound by the judgment, unless it is impeached for fraud or collusion between him and the adverse party. The principle which underlies this rule has always been applied in proceedings relating to railway mortgages, where a trustee holds the security for the benefit of bondholders."

The mortgages exhibited with this bill show that these trustees were invested with the fullest capacity of representation, and, inasmuch as they are not charged with any fraud or collusion with the adverse party, they must be held by this court to have actually represented their beneficiaries, and among them these complainants. It follows that the suit of the mortgage trustees must be treated as a suit pending in the circuit court, not only so far as the trustees were concerned, but in reference to the position' and rights of these complainants, their cestuis que trust, and that the latter are affected by all the consequences of that fact. What, then, are these consequences? It appears that the circuit court, in a suit which is thus pending, and still under its control, has taken jurisdiction of the lands in which these complainants claim an interest, and has directed that they shall be sold and conveyed to this defendant; and now they ask this court to act, by means of its power over the defendant's person, upon substantially the same matter, and, while the decree of that court is unreversed, to forbid the defendant to avail itself of that decree, even within the territorial jurisdiction of the court which made it. The parties are there and their case is there; but it is said that this defendant, who is a party quoad his purchase, has no rights by reason of certain frauds. Is not that question, like every other element of the case, in the hands of that court? If it were true that the circuit court had no case in its hands touching this matter, we might act without falling into a conflict of jurisdictions, but we find that it has such a case, that it is competent to undo what it has done if it has been imposed upon by fraud, and we cannot interfere. Such interference is forbidden, not merely by comity, but by a rule of necessity; Peck v. Jenness, 7 Howard, 625; and this objection may be sustained on demurrer. Randall v. Howard, 2 Black, 584. It may be urged that this court is only asked to act in personam, and not to interfere with the res of which the circuit court has jurisdiction, and that this involves no conflict. But we do interfere substantially with the res, if, by a decree in personam, we make it impossible to exercise over it the rights of proprietorship which the circuit court has given.

Some other grounds of objection to this bill remain to be considered, but I conceive that this alone is sufficient ground for the demurrer.

This rule involves no denial of justice. If the beneficiaries of a trust can show good reason why they should act for themselves, independently of their trustees, they may be admitted into a pending suit, where their trustees are already parties, on the same principle which would allow them to commence a suit. In Kerrison v. Stewart, supra, the Supreme Court said: "Undoubtedly cases may arise in which it would be proper to have before the court the beneficiaries themselves, or some one other than the trustee, to

represent their interests. They then become proper parties, and may be brought in or not, as the court, in the exercise of its judicial discretion, may determine." 93 U. S. 160. These complainants have appealed to this very principle in filing the present bill, and the same principle would equally entitle them to be admitted as parties in the suit pending in the circuit court. They would find the defendant already subject to the jurisdiction of that court, quoad the 'question of this very title. Blossom v. The Milwaukee, etc., R. R., 1 Wallace, 655.

But even if this suit did not interfere with another jurisdiction, this bill, I think, would be defective. Complainants are not entitled to an injunction which is likely to injure rights which cannot be taken care of in this suit, and such relief in this case may injure certain bondholders not here represented, and certain rights of this defendant which cannot here be ascertained.

It is to be remembered that this suit is brought only on behalf of the complainants and of such owners of other bonds of the Memphis and El Paso company "who have not accepted any dividend or payment thereon as may desire or be entitled to intervene therein." An order of the circuit court, and a deed of conveyance, and an agreement with the defendant are shown, in pursuance of which an unascertained number of the bondholders may have exchanged their bonds for those of the defendant, transferring to the latter all of their rights touching the lands in question, and in pursuance of which other bondholders may have entered into engagements which they desire to complete, for an exchange of bonds for portions of these lands. It is not alleged that the lands have not been acquired by defendant, in performance of its covenants, or that such arrangements, either executed or to be executed, have not been entered into by many of the bondholders. On the contrary, the statement in the bill just referred to implies that such arrangements have been executed to a considerable extent. Now, it seems obvious that an injunction which should restrain the defendant from making any disposition of these lands may interfere unjustly with rights which are not represented here nor disclosed to the court. It would forbid an exchange of lands for bonds where the holders are willing to accept them, and without giving such holders an opportunity to be heard. On the other hand, by an exchange of its own bonds for those of the Memphis and El Paso company, an arrangement which is provided for in the deed and agreement, the Texas and Pacific company would succeed to all the rights of the former holders as to these lands. It is not shown that this has not happened, or to what extent it has happened. But this court is asked, while all of these risks of doing injustice are brought to its attention by the bill itself, to grant an injunction, based upon a declaration that the defendant has no interest whatever in these lands, and restraining it from making any

disposition of them whatever. It is not asked to grant an injunction until the rights of all the parties, the other bondholders and the company, have been adjusted, nor is it suggested that any adjustment is contemplated. In such a case this court could only grant a final and conclusive injunction. It is not asked that the defendant shall be enjoined from disposing of the lands so as to diminish the amount of lands necessary for the satisfaction of complainants' claim, and no such order can be made. This court can do nothing unless it completely ties the hands of the defendant on the ground that it has no interest whatever in the premises. I conceive that this bill does not state a case which would justify any such course, and that an injunction should be refused if all the facts here stated were proven by testimony.

DAVIS

v.

OLD COLONY RY. Co.

(Advance Case, Massachusetts. June, 1881.)

A contract by a railroad corporation to pay, or guarantee, the expenses of a "world's peace jubilee and international musical festival," is neither a necessary nor appropriate means of carrying on its business, and is ultra vires, and cannot bind it by reason of benefit to be derived from possible increase of passengers over its road.

The power to manufacture and sell goods of a particular description does not include the power to partake in, or to guarantee, the profits of an enterprise that may be expected to increase the use or demand for such goods.

M. F. DICKINSON, Jr., and Jabez Fox for plaintiff.

The plaintiffs, relying upon the "guaranty paper," held the festival and incurred expenses exceeding the receipts by more than $200,000. The proper legal construction of this instrument was determined in Davis v. Smith American Organ Co., 117 Mass.

456.

The doctrine of ultra vires cannot be invoked for the purpose of regulating the means employed by a corporation for carrying on and promoting its proper business if those means are not prohibited by law. Morville v. American Tract Society, 123 Mass. 136; Old Colony Ry. Co. v. Evans, 6 Gray, 25; Brown v. Winnisimmet Co., 11 Allen, 326; Lyndeborough Glass Co. v. Mass. Glass Co., 111 Mass. 315; Mayor, etc. v. Norfolk Ry., 4 Ell. & Bl. 397.

See also Hendee v. Pinkerton, 14 Allen, 381; Dupee v. Boston Water Power Co., 114 Mass. 37; Simpson v. Westminster Palace Hotel, 8 H. of L. Ca. 712; Taunton v. Royal Ins. Co., 2 Hem. & Al. 135; Att'y Gen'l v. Great Eastern Ry., 11 Ch. D. 449.

Those cases where railroad corporations have undertaken, by contract with connecting lines, to extend their own line beyond the location authorized by their charter, bear no resemblance to the present case. See East Anglian Ry. v. Eastern Counties Ry., Colman v. Eastern Counties Ry., and other cases cited by the de

fendant.

It is now very well settled that a corporation cannot avail itself of the defence of ultra vires when the contract has been in good faith fully performed by the other party, and the corporation has had the full benefit of the performance and of the contract. Allen, J., in Whitney Arms Co. v. Barlow, 63 N. Y. 70. This rule, with possibly some limitations that cannot affect the present case, seems to be supported by the great weight of American authority. National Bank v. Matthews, 98 Ü. S. 621, 629; Ry. Co. v. McCarthy, 96 U. S. 258, 267; County of Macon v. Shores, 97 U. S. 272, 279; Whitney Arms Co. v. Barlow, 63 N. Y. 62; R. & R. R. Co. v. Proctor, 29 Vt. 93; Hays v. Galion Gas L. Co., 29 Ohio St. 330, 340; Bradley v. Ballard, 55 Ill. 413; Farmers', etc., Bank v. Detroit R. R. Co., 17 Wisc. 372; Argenti v. City of San Francisco, 16 Cal. 255; Perkins v. Portland, etc., R. R., 47 Me. 573; O'Hare v. Bank, 77 Penn. St. 96.

The precise question appears to be left open by the later decisions in this State This Court has, however, very plainly intimated that while a corporation may be punished for exercising powers not conferred by its charter, by the seizure of its franchise, it will not be permitted to set up its own misbehavior in defence to an action upon a contract fully executed on the other side. Little v. Obrien, 9 Mass. 423; Chester Glass Co. v. Dewey, 16 Mass. 94; McCluer v. Manchester R. R., 13 Gray, 124; Monument Nat'l Bank v. Globe Works, 101 Mass. 57; Nat'l Pemberton Bank v. Porter, 125 Mass. 333; Attleborough Nat'l Bank v. Rogers, 125 Mass. 339.

Charles Allen and R. D. Smith for defendants, Smith Amer. Organ Co.

The subscription purporting to be that of the Old Colony and Newport R. R. is clearly not binding upon that corporation. If the Old Colony and Newport R. R. Co. is not bound by the subscription, the amount thereof added to any other one of the said subscriptions (if proved invalid), and the sum deducted from $208,500, would reduce the whole amount subscribed below $200,000. Atlantic Cotton Mill v. Abbott, 9 Cush. 423. The proof of the character and validity of the different subscriptions may rest upon different questions of evidence, and perhaps of law.

The court is to construe the whole contract, ut res magis valeat quam pereat, and not merely its plain and simple parts. Richmond . Whittlesey, 2 Allen, 230. To do this it is competent to inquire into all surrounding circumstances,-the situation of the