Wiimnv or u ffi.Dfs , John /l. Burnhcon , J. F Denison, and James II. Dkilw, FOR WM. G. RUSSEL, Arbitrator. In April, 1877, and perhaps before that time, several in- terviews were had between J. M. Forbes, President of the Chicago, Burlington and Quincy Railroad Company, and my- self, relative to settling difficulties between bondholders of the C., C. & D. and the C., D. & M. Railroad Companies, and between the said C., B. & Q. Railroad Company and the Trustees of the bondholders, under the mortgages of the said C., C. & D. and C., D. & M. Railroad Companies, which, for convenience, I shall call the River Roads. After much discussion, there was an agreement to adjust the difference between the bondholders. There remained the difference between the C., B. and Q. and the Trustees, which was unadjusted, but which was re- ferred to a committee of the Chicago, Burlington and Quincy Railroad Company, with power to adjust it, and a contract was made between that Committee and myself, on behalf of the Trustees, but signed by the Trustees, which was embod- ied in the following agreement, which is inserted verbatim : “ This Memorandum of Agreement, made and entered into this the 21st day of July, A. D. 1877, by and between the Chicago, Burlington & 2 Quincy Railroad Company, of the first part, and J. A. Burnham, J. N. *’ Denison and J ames H. Blake, Trustees of the C., C. & D. and the C., D. & M. Railroad Companies, of the second part. 1st. Witnesseth, That the said Trustees agree to procure the i dismissal of all suits against the C., B. & Q. Railroad referred to in the letter of J. M. Walker, bearing date May 15, 1877, to Mr. Tyson, by the said railroad companies, or construction companies organized to promote their construction, and without further cost to the said party of the first part ; also that traffic contracts between those two companies and the said party of the first part shall be abandoned, and all obligations by the C., B. & Q. Railroad Company relative thereto shall be considered surrendered and cancelled. 2d. And the said C., B. & Q. R. R. Company, on its part, agrees to pay seventy thousand dollars to the said Trustees, for their claim for rolling stock, including cars and locomotives received from the said C., C. & D. and C., D. & M. R. R. Companies, and all other claims and the interest thereon ; also to forego and release all claim for any taxes paid by it under any judgment against the said C., C. & D. or C., D. & M. Railroad Companies, and all other claims against companies, except those expressly reserved herein, it being the purpose and intent of this agree- ment to fully settle and adjust all matters between the parties substan- tially hereto, and especially between the C., B. & Q. and the C., C. & D. and the C., D. & M. Railroad Companies, so that there shall remain no outstanding claims of any kind on either side against the other, and for which it is agreed that this amount of seventy thousand dollars on the one side is to be paid, and the agreements on the other are made as herein contained ; and both parties hereby agree to relinquish and release all claims except those herein specified, each to and as against the other, of whatever nature and kind. 3d. And the said second parties agree that all claims for ticket or freight balances with and due to the C., B. & Q., or with and to any other Company, which has been paid or advanced by the C., B. & Q. Company for the C., C. & D. and the C., D. & M. R. R. Companies shall be deducted from the said amount of seventy thousand dollars, to be paid by it t© said second parties. And the saia first and second parties agree that all coupons of the C., C. & D. and C., D. & M. R. R. Companies held by it, excepting such as may be returned to certain Directors of C., B. & Q. at the time said coupons were purchased, and for which they received money, shall be converted into stock in the C., C. & D. and the C., D. & M. Railroad Companies, upon the same basis as the bonds are to be exchanged, held by other parties. The letters “ C., B. & Q. R. R.” in this contract are to be taken for Chicago, Burlington and Quincy Railroad, and “ C., C. & D.” and “ C., ■*» ^ 3 D. & M.” for Chicago, Clinton & Dubuque, and Chicago, Dubuque & • Minnesota Railroads. In witness whereof the Chicago, Burlington & Quincy Railroad Company has, by its Committee and the said Trustees, personally, have duly accepted this contract the day and year aforesaid. (Signed) CHICAGO, BURLINGTON & QUINCY R. R. CO., j By J. N. A. Griswold, Chairman. JOHN A. BURNHAM, J. N. DENISON, JAMES H. BLAKE, Trustees. It was then supposed that all difficulties were adjusted ; but the C., B. and Q. Company have declined to pay the $70,000, on the ground that there are ticket and freight bal- ances during the years 1871 to 1874, inclusive, standing over in account, which accrued in the usual course of business be- tween corporations, which, under clause three in the agree- ment, it has the right to offset against th3 $70,000 which it agreed to pay the Trustees for equipment taken from the t River Roads, which was mortgaged to the Trustees as surety for the bondholders, and which was unquestionably the prop- erty of the Trustees. The question arises, then, whether that clause in the con- tract, in the light of all the circumstances attending the ne- gotiation, is so drawn as to compel the Trustees to receive in payment of its claim of $70,000 for engines and rolling stock belonging to them, but taken from the River Roads after they had become bankrupt, old arrears of freight and ticket balances which accrued between the corporations two and three years before the appointment of a Receiver, and while the River Railroad Companies were solvent and able to pay. That clause in the contract, it may be admitted, is drawn in general language, and might have been more specific and exactly suited to the circumstances, and is open to criticism ; and the question is whether the contract, with surrounding # and attending circumstances, will be so construed and read as to accomplish what, as we say, was unquestionably the in- tention of the parties at the time the contract was made. 4 That question is submitted to the consideration of Wm. G. Russel, Esq., arbitrator, by the acceptance of the proposi- tion of the Chicago, Burlington and Quincy Company by the f Trustees in the following letter, both accepting and stating the proposition and the question to be submitted. I insert letter : Boston, June 7, 1878. John M. Forbes, Esq., President Chicago , Burlington & Quincy Railroad Co'y : Dear Sir : — On consulting the Trustees of the river roads, they re- quest me to say that they will yield to your suggestion and submit to the determination of Wm. G. Russel, Esq., the question as to what was the intent, under all the circumstances, of the following clause of the agreement of July 21, 1877 : “ And the said parties agree that all claims for ticket or freight balances with and due to the C., B. & Q., or with and to any other com- pany, which has been paid or advanced by the C., B. & Q. Company for the C., C. & D. and the C., D. & M. R. R. Companies, shall be deducted from the said amount of seventy thousand dollars, to be paid by it to said second parties.” Yours truly, i (Signed) J. F. JOY. It will be seen that it is agreed that the intent of the par- ties to this agreement shall be the question determined by the arbitrator, and if, by the language inadvertently used, and without knowledge of the actual circumstances, the actual in- tent of the parties does not clearly appear, the surrounding and attending circumstances may and shall be resorted to to ascertain that intent, and then the parties shall be governed by it. There is no nice question of latent or patent ambiguity in this case. It is agreed that the surrounding and attendant circumstances shall be considered for the purpose of arriving at the intent. It is not a question, therefore, whether there is a latent or patent ambiguity, or whether there is any am- biguity at all. The agreement makes the circumstances a part of the case. I will, therefore, state the history of the negotiation until it results in a contract, and then comment upon the form of J 5 4 the contract, and why it was couched in the language which was used to express the intention of the parties. In the various interviews which took place between the President of the C., B. and Q. and myself, settling other things, the question came up whether certain coupons of the bonds of the River Roads, which had been purchased by the 0., B. and Q., could, under the decree rendered for foreclos- ure, come in and be exchanged for stock in the reorganiza- tion of these companies. I stated that I was of the impression that it could be done by agreement between the Trustees and the 0., B. and Q., provided the C., B. and Q. would pay for the rolling stock taken by it from these roads, and which belonged to the bondholders and Trustees. It was fair that the coupons should come in, but it was equally just that the C., B. and Q. should pay for the equipment which it had taken — valued at $81,000. • That it may appear that this is not stated from memory, which is liable to error, I copy from a letter of Mr. Forbes, in which, after speaking of other things, under the date of April 24, 1877, he writes thus : ‘‘You also suggested an agreement that the coupons of 1873, 1st July, chiefly held by C., B. & Q., might by agreement be admitted to participate in the proceeds of foreclosure, upon condition that the value of the rolling stock taken by the C., B. & Q., which is claimed by the •Trustees as covered by the mortgages, should be paid for. If you will put this into the definite shape of a proposition, fixing the value and the amount of interest, if any, on the cost, it ought to be acted upon by the C., B. & Q. Board, who meet Thursday or Tuesday next. If Mr. Walker would endorse your proposal as reasonable or admissible, this would promote early action.” To this part of the said letter of April 24th I replied May 1st, 1877, as follows, in a letter to Mr. Forbes, to wit : “ I note what you say about the coupons and the claim for rolling stock. I think the suggestion can be carried out and the coupons allowed as stock, the C., B. & Q. paying for the rolling stock ; but in order to do it, I shall have to come again to Boston, perhaps, and consult others. I shall myself advise it ; and that being done, I would bury out of sight, so far 4 6 as possible, (he thoughts of the unjust action of the C., B. & Q. relative to the River Roads and the men who have done much to build them up and make them tributary to the C., B. & Q. property.” This letter of mine crossed, on its way to Boston, one from Mr. Forbes, dated the first day of May, 1877, in which he wrote me again relative to the coupons, in which he states as follows : “I of course expect my coupons of (date July 1, 1873) will be put upon the same footing as those held by C., B. & Q. (about 239,000 in all) ; and this reminds me that you have not yet put into shape your proposition to the C., B. & Q. in regard to those coupons and to the rolling stock, which last, I think, was credited in account in sale, 1873, at $81,000. I suppose it will require an order of Court to reach both points; but if the Trustees on one side, and the C., B. & Q. on the other, agree, it will doubtless be easier to get the Judge’s consent.” To my letter on this subject Mr. Forbes replied as follows, under date May, but I am unable to decipher the date : “ As to the unsettled points between C., B. & Q. and the Trustees, I am inclined to think any suggestion made ~by you , and which it is under- stood I neither favor nor disapprove, would probably be agreed to here without the need of your coming on to agree to it, and it had better come from you perhaps to J. N. A. Griswold, Chairman.” To these letters I replied by one to Mr. Forbes, under date of May 3d, 1877 : “ J. M. Forbes, Esq., Boston : “I have yours relative to the advertisement or circular to bond- holders. Coupons since July 1st, 1873, 1 believe take in all except those held by C., B. & Q., or those of the same date and maturity. I think we will get along with these by agreement, as the arrange- ment between us was not understood to cover these, and as it was drawn I think it did not. I hope in the closing up of these matters we will arrange everything with the C., B. & Q. without difficulty, but they may require some fur- ther conference. Yours truly, J. F. JOY.” “ P. S. — I cannot make a proposition relative to the coupons and rolling stock without consultation with others, but this I am doing and will get it into shape as soon as I can.” I had submitted the matter to Sidney Bartlett, the Boston counsel of the Trustees, whether, in his opinion, such a pro- 7 * position could be carried out, and he wrote me under date of the 5th May, 1877, on this subject as follows, namely : “ I have no doubt that the agreement proposed by Mr. Forbes to let the C., B. & Q. come in with their coupons under foreclosure, they to pay us for the cars they took, can be legally effected.” Having the advice of the Boston counsel of the Trustees, in accordance with the above suggestion of Mr. Forbes, I ad- dressed the following letter, dated May 7, 1877, to J. N. A. Griswold, Chairman of the Board : Detroit, Mich., May 7th, 1877. John N. A. Griswold, Esq., Chairman, etc., Boston, Mass.: Dear Sir : — You are all aware in Boston how anxiously and earnestly I have long been engaged in the endeavor to extricate the Dubuque roads from litigation, both in the Courts of Iowa and among bondhold- ers, all interested in seeing the roads made as valuable as possible. I think I am in a fair way of accomplishing it. There are, however, yet left some questions between the C., B. & Q. and the Trustees to be adjusted, and I hope the proposition I submit both to that Company and the Trustees will be agreed to by both, l While these roads were in process of construction the Companies became indebted to the C., B. & Q. in a considerable amount. There (that) was a debt against the corporations and not against the Trustees. The C. ? f B. & Q., in concert with the officers of the Company, procured to be con- veyed to it, a quantity of cars, and perhaps locomotives, valued at about $ 81,000, in payment thereof, This equipment was covered by the mort- gage to the Trustees and belonged to the bondholders, and, of course, could not be used as against them to pay the debts of the cor- poration. The C., B. & Q. had certain coupons paid by it, from the bonds of the river roads. I think they were the July coupons of 1873. The amount is about $240,000. Probably, legally, strictly these coupons might not come in under the decree of foreclosure, but it is probably also fair that they should come in. In order to avoid controversy on each side, and to do right as be. tween the bondholders and the C., B. & Q. R. R. Co., I propose to both parties this arrangement of these questions, viz.: That the coupons shall be allowed to come in for their face on the same terms that the bonds do, that is without past due interest, and that the C., B. & Q. become a stockholder in the river roads to the full amount of the coupons, and that all the coupons of the same date and maturity stand upon the same i footing and be exchanged for stock, and to accomplish thig, if necessary, that the order of the Court having jurisdiction of the suit be obtained for that purpose. * 8 Second. That the C., B. & Q. Company shall pay to the Trusteed of the bondholders, or (which is the same thing) to the reorganized companies, the appraised amount of the rolling stock and machinery received by it from the River or Dubuque Roads, so called, with the interest thereon ; and that these things being done, it should be taken as an adjustment and settlement of difference between the C., B. & Q and the River Roads. If there be any other differences or questions between them, for the sake of peace, and to promote the best interests of all, I should advise that on both sides they be considered as abandoned and settled. Yours truly, J. F. JOY. At Mr. Griswold’s request, Mr. Tyson, Auditor of the C., B. & Q. R. R. Company, wrote to James M. Walker, coun- sel of the C., B. & Q. R. R. Company, now and for many years before, and during and ever since these transactions, and I think enclosing my letter to Griswold to him, asking him about the question. This letter the C., B. & Q. can produce. In an- swer, Mr. Walker wrote to Tyson the following letter: Chicago, III., May 15, 1877. Geo. Tyson, tfec., Boston , Mass. : Dear Sir: — I have yours of the 11th, relative to the various mat- ters between this Company and the 0., C. & D. and C., D. & M. R. R. Companies. 1st. In 1878 this Company did not pay , but purchased of the C., C. & D. and C., D. & M. R. R. Companies coupons maturing June 1st, 1873, to the amount of $224,920, and took an assignment of the coupons. This did not include all the coupons maturing at that date. Of the $12,080 not purchased was included those upon Graves’ bonds and some held by Mr. Forbes. Who held the others I have no means of learning. For this purchase there was a resolution of the Boards of Directors of the three companies, and in pursuance thereof a contract copy of which I enclose. In the recent deciee in the foreclosure cases of the river roads the amount of coupons maturing June 1st, 1873, with interest thereon was included, and the Trustees received the property under the decree, for payment of the entire principal and interest of the bonds, including those purchased by us as well others. During the foreclosure proceed- ings, the question whether these coupons held by us are a legitimate charge against the property, was under consideration, and it was the opinion of the Court, as I understand, that they were and were there- upon included in the decree, and, in my opinion, in accordance with law and equity. 9 * 2d. In 1872 the C., B. & Q. R. R. Co. built for the C., D. & M. and C., C. & D. R. R. Companies some passenger cars and delivered them on expectation of immediate payment in cash. Payment was delayed, and * after demand for the return of the cars it was agreed between the three companies that as the river roads required the passenger cars, but had motive power and flat cars that they did not need, the C., B & Q. should take instead 60 flat cars and three engines at a valuation of $78,450. The amount due for the passenger cars was $65,125. The cars and engines were received by the C., B. & Q., the passenger cars retained by the C., C. & D. and C., D. & M., and entries made in the books of the respective Companies accordingly. Had the cars manu- factured for the river roads been sold on credit, or time given for pay- ment, then the title to the cars would have vested in the Company, have passed under the mortgage, and this exchange could not have been made. So far as the exchange of cars is concerned, under the circumstances, neither the bondholders nor the corporations concerned were injured, and the transaction would be approved and sustained in equity. But for the excess in value of the cars received by the C., B. & Q. over the passtnger stock retained by the river roads, the C., B. & Q. would be answerable to the Trustees for the bondholders. This view of the ti ansaction is in accordance with that taken by Judge Hoar in his opinion under date of December 24, 1875. * 3d. In 1874, an agreement was made between the C., D. & M. and C., B. & Q. R. R. Companies, by which the latter, upon certain specified conditions, should finish the so-called Turkey River Branch of that ? Road, and have possession of that Road until the money advanced for that purpose should be paid out of earnings. Under this agreement the C., B. & Q. R. R. proceeded with the work, and had expended, before commencement of foreclosure proceedings, about $99,168.56. Upon failure of the C., D. & M. to keep its agreement, work was suspended, and the C., B. & Q. caused a lien to be filed in the proper counties to secure to it repayment of these expenditures. In the fore- closure cases, the C., B. & Q. is made defendant, and in the answer this contract and the expenditures under it, and the liens filed, are set forth. The validity of the lien was disputed, on the ground that the expendi- ture was subsequent to the execution of the Trust Deeds. But under the laws of Iowa, as recently adjudicated, this position is not tenable. It will be attacked, however, upon other grounds, and perhaps success- fully. I am not strong in the opinion that the lien can be maintained. 4th. About this time, and after making the contract mentioned above, and while it was being executed, the C., B. & Q. advanced for the C., C. & D. and C., D. & M., to pay taxes, a sum amounting to about * $12,047.45. My recollection is that there was a judgment for these taxes which, instead of being discharged, was assigned to the C., B. & Q. At 10 all events, this amount is a proper charge against the Trustees The matter was set forth in the foreclosure proceedings, but the priority of the lien yet remains to be disposed of. 5th. There is also a claim against the Receivers, Harris & Thomp- son, which was allowed by the State Court, for taxes paid for freight and ticket balances during the Receivership, and amounting to $8,241.60. Freight and ticket balances are of course valid claims against the Receiver. But whether the Federal Court will confirm the action of the lower court in reference to the balances remains to be determined. 6th. In December, 1875, theC., C. & D. R. R. Company commenced a suit against the C., B. & Q., laying its damages at $2,500,000. The alleged ground of suit is that the C., B. & Q. failed to build a bridge across the Mississippi River at Clinton and receive the business of the river roads at that point. I removed this case into the Federal Court, where it is still pending. The suit is without merit, and I feel entirely confident that we can make successful defense, and in the end nothing can be recovered. The C., B. & Q. is the owner of one-half the capital stock of the C., C. & D. Since the commencement of this suit, and recently, as I understand, Mr Joy — perhaps as Trustee — has come into possession of the balance of the capital stock ; and it seems to me that it is in the power of this Company (the C., C. & D.) to cause this suit to be dismissed. 7th. It will be recollected by the Board that this Company received in payment for advances to the C., C. & D. R. R. Company some 16,000 acres of land in Iowa ; the greater portion of it it still holds. In August 1876, the River Railroad Construction Company — that being the com- pany which constructed the C., C. & D. Road — instituted a suit against the C., B. & Q., myself and Mr. Joy enjoining the sale and transfer of these lands. This suit is also without merit, and was instituted to enforce collection of some pretended claim against the C., C. & D. Road. Recently, as I understood, Mr. Joy, as Trustee, has also become the owner of the entire capital stock of this River Railroad Construction Company, and, as I suppose, it is in his power to cause this suit also to be discontinued. This statement, I believe, covers all unsettled matters between these companies which can in any manner affect the property held by the Trustees. From this scatement it will be seen that there is ground and abun- dant reason for a compromise and settlement, and I cannot urge such a disposition of the business too strongly. Whatever be the terms all parties will be likely to be gainers. If the river roads propose to reorganize, build the branch and devel- ope the business of those roads at once, as ought to be done, the C., B. & Q. cannot afford to delay them a day, as the business over our road, which it should be prepared to receive at Clinton, will be of more value than anything that can be made out of these matters. 11 * If Mr. Joy’s proposition be accepted as made, or in any modified form, I should think it ought to be on condition that the suits mentioned be dismissed, so that all expense and danger connected therewith might t be avoided. Should an adjustment be deemed advisable, I could, I think, in connection with Mr. Joy, have this business out of the Courts and entirely out of the way at an early date. * Court is now in session at Des Moines, and will be for ten days or two weeks. With prompt action the business may be closed out at the present term and the river roads be free to organize and proceed with their plans, whatever they may be, with the knowledge that all claims against the property have been adjusted. The circumstances under which these bonds were issued will justify the Board in going as far as it rightfully may to give the river roads the most liberal terms of settlement. Yours truly, (Signed) J. M. WALKER. Some time subsequent to the receipt by Mr. Tyson, at a meeting of the Board of the C., B. and Q. Railroad Company, a resolution of the Board was passed referring the subject of my letter of the 7th of May to Mr. Griswold to a committee, of which he was Chairman, and Jefferson Cooledge and t Robert Harris, then President of the C., B. & Q. Company, composed the rest of the committee, and in due time I met them on the day of the date of the contract. My letter to Mr. Griswold, and Mr. Walker’s letter to Mr. Tyson, Auditor, were before the committee. The one contained the proposition as agreed upon by Mr. Forbes and myself, in the above correspondence, and the other the comments upon the proposition, and a statement of what should be accom- plished by myself, namely, to release the C., B. and Q from certain suits in the west, if my proposition was accepted. The subjects mentioned in those two letters were the only subjects discussed. The matters stated in Mr. Walker’s letter were all as he stated them. His legal position I differed from in some in- stances. I assumed that the sale of cars, or the building of cars, in 1872, which was the time they were built and delivered to and for the River Roads, and which were permitted to remain for a period of two or three years unpaid for, if they were un- 12 paid for, and until the roads became bankrupt was such a sale as passed the title to the River Railroad corporations, and that the amount to be, or to have been, paid for them was a debt from those corporations to the C., B. and Q., and that the C., B. and Q., upon any verbal understanding that cash was to be paid for the cars, could not remain the owners of them ; and when, after three years, the River Companies became bankrupt, come in and take the cars, or set up a claim against the Trustees for them. This was conceded by the committee, as appears by the agreement. There was expended by the C., B. and Q., under an agree- ment, as stated by Mr. Walker, $99,168.56. This was done by agreement between the River Railroads’ corporations and the C., B. and Q. Company. I did not care to dispute which company violated its agreement. The lien alluded to was not maintained. The $99,000, if the C., B. and Q. was entitled to recover it, was a debt against the River Road Companies. There had been expended in payment for taxes upon the River Roads, as stated in Mr. Walker’s letter, $12,047.45. At all events, says Mr. Walker, this amount is a proper charge against the Trustees. This I contested, as well as the $99,000. They were advanced and paid by an arrangement between the corporations, and while the C., B. and Q. was in possession and operating the River Roads under that arrange- ment. If that arrangement was not carried out by either side, these items constitute a debt from one corporation to another. The Trustees, for the bondholders, were liable for neither, nor were they liable for any debt of the corporation, except as they were of such a character as by law made them liens under the law of Iowa. This was my position, and stated as the law, and the committee disposed of these two items upon this principle, which they conceded. Mr. Walker stated in his letter that “there was a claim against the Receivers, Messrs. Harris and Thompson, which was allowed by the State Court, in favor of the C., B. and Q. Company, for taxes paid, and for freight and ticket balances 13 during the receivership, and amounting to $8,241.60. He said freight and ticket balances are, of course, valid claims against the Receiver, but whether the Federal Court will con- firm the order of the lower Court (State Court) remains to be determined.” As the Trustees, by asking the appointment for a Receiver, and on his appointment became possessed of the roads, I ad- mitted at once that these freight and ticket balances were a just charge against the Trustees, but contested the amount paid by C., B. & Q. for taxes, if any such was paid ; because, if any such was paid, it must have been a voluntary pay- ment if paid during the receivership, and the C., B. and Q. have no right to pay it, as the road was in the hands of the Receiver. This was conceded, also, by the committee. There remained, therefore, only the item of freight and ticket balances to be disposed of, and this claim was just so much less than $8,241.60, as the bill for taxes included amounted to. But the amount was indefinite, and could not be stated, and was left to be ascertained. It was stated by some of the committee to be perhaps $4,000 to $6,000. Hence, in every other respect the agreement was definite, and in that respect it was left unsettled, and was to be left to be ascertained by the statement of the account or the statement allowed by the Court. Mr. Walker, while stating these balances which accrued under the Receiver to be good against the Trustees, expresses doubt whether the balance which had been allowed by the State Court for the taxes in- cluded in the bill could be allowed by the Federal Court, to which all these matters had been removed. Mr. Walker had also stated in his letter, in which he stated this item of freight and ticket balances which accrued after the Receiver was appointed, as follows : “ This state- ment (meaning said letter) covers all unsettled matters between these Companies which can affect the Trustees .” In that statement the old freight and ticket balances, which accrued from 1871 to 1875, are not mentioned, because 14 they could not affect the Trustees, and of course were not mentioned or discussed, or claimed, by any member of the C., B. & Q. Company at the time the contract was made. The position taken by the Trustees was that no debt against the corporation, and where credit was given to the corporation, could be a debt against them, and offset against their claim of, as was stated, about $80,000. That position was a sound one, and conceded by the committee, and every claim mentioned in Mr. Walker’s letter which accrued in the form of a debt as advance of money to the corporation before the Trustees became possessed of the roads, was conceded not to be a debt against the Trustees, and that it could not be offset, and was, by the terms of the agreement, excluded. There can be nothing more conclusive of the intention of the agreement, or of what was its purport, than these state- ments, except the general history of this transaction, which shows the position of both parties from the beginning of the negotiation to the end of it, the claims of each party, and how far they were conceded by the other, and exactly what was to be settled by the committee and myself, as acting for the Trustees. In these circumstances, and with this history all written, and not depending on memory for verification, it is wholly impossible that a contract could have been made which, by the understanding of either party, would have opened the door to old debts, of from two to five years’ standing, and while the companies were solvent, to the amount of twenty- five thousand dollars, to be offset against the claim of the Trustees, in the shape of ticket and freight balances due from the River Roads in 1872, 1873 and 1874, This would be to repudiate the principle upon which the negotiation was carried on on both sides, and, after havipg agreed fully upon the principle as to all items in the controversy, to throw it away without a word of discussion or of thought, and admit debts older, by years, and treble in amount of those shut out by the principle, to come in and absorb and diminish the A l V 4 * 15 amount due the Trustees. I venture to say that no such absurdity was in the minds of any one on either side, and that such a thing could not have been mentioned by any one of either side but to have been repudiated at once as absurd. Now let us consider the contract a moment, and see what it is, and see if it, even in the phraseology adopted, can mean anything else than was clearly contemplated by both parties to it. First — It is a contract between the Trustees and the C., B. and Q., and not between the River Roads and the C., B. and Q. It was made to settle questions between them and the C., B. and Q., and when it refers to all claims for freight and ticket balances which are due to the C., B. and Q., or which are due to any other Company, which has been paid or advanced by the C., B. and Q., for the River Roads, and says they shall be deducted from the amount to be paid to the Trustees, it simply means that all freight and ticket bal- ances advanced and paid by the C., B. and Q., for which the Trustees are liable ; in other words, all freight and ticket balances advanced or paid by the C., B. and Q. for the 0., C. and D. and the C , D. and M., or River Roads, since the roads were taken possession of by the Trustees, through a Receiver, should be allowed and deducted from the amount agreed to be paid. This is the natural and proper construc- tion and meaning of the instrument, when the position and relations of the Trustees to the roads and the contract is con- sidered. The legal construction of the contract would limit the language to the subject matter, about which they might legally and rightfully contract. Where general language is used by Trustees — and it may be construed two ways, one of which would lead to a wrong to the interests they repre- sent, and produce injustice, and the other would be consist- ent with, their duties, and within the limits of their authori- ty, and produce just results — the construction will be adopted which is consistent with their authority, and will produce just results. 2 Parsons on Contracts, 500. 16 Here the one construction is consistent with the wholQ history of the case, with the contract itself, and its principles in other respects, and is within the strict limits of their authority. This construction would prevail even were it not for the overwhelming evidence of the intention of all parties to it at the time it was made, furnished by the history of the nego- tiations and all surrounding facts. The Trustees were requested to agree in that contract to procure the dismissal of certain suits, and to procure the aban- donment of traffic contracts and other things, which strictly they should not have been called upon to do ; but, as some of them were within my own power to accomplish, and others had been accomplished by foreclosure and reorganization of the River Roads’ Companies, there was no objection to such an agreement; that is, it could not prejudice the Trustees in their interests, and, therefore, were not objected to. All has been done. The coupons have been admitted in the reorgan- ization of the River Roads. It remains for the C., B. and Q to pay the amount it agreed to pay, principal and interest, from the time it should have been paid. That amount is less by $11,000 than the claim. It was fixed at $70,000, instead of $81,000, because the cars and engines had been in use some time, and the committee claimed that they had depreciated in value, which was admit- ted, and abatement made of the difference, as a compromise. It will be observed that, in stating the chief facts, no re- liance is placed on memory. They are, therefore, incontro- vertible, and cannot be changed, and we submit that there is, and can be, but one result, viz.: payment by the C., B. and Q. Company, less the freight and ticket balances, as mentioned in the contract, which accrued after the appoint- ment of the Receiver, which can be easily ascertained, which claim was the intention of the parties to the contract. JAMES F. JOY, For the Trustees. P. S. — I should,, perhaps, have stated more definitely in the document to go before Mr. Russel, at the close of it, the precise point to be decided by him, instead of the result of Ms decision , as it must be given, viz : The pay- ment by the C., B. & Q. to the trustees of the money due under the agreement. The point for him to decide, is, whether it was the in- tention that the freight and ticket balances which might be offset or deducted from the amount to be paid by the C., B. & Q. to the trustees, under the agreement, were those which had accrued after they took possession of the roads, by asking for a Receiver and securing his appoint- ment, from which time they would be liable for such bal- ances ; or whether, as the C., B. & Q. now claims, it opens the door to let in freight arid ticket balances which accrued years before, and while the corporations were solvent and doing business in the usual way, and with running accounts between each other, and at which time they would not and could not be liable for such balances. J. F. JOY, For the Trustees.