Page:Federal Reporter, 1st Series, Volume 8.djvu/18

,4 : FEDBBAL REPORTER. �80 that the railway company in fact received the value thereof, and the transaction was reported by Wright to the secretary of the com- pany, and by him to its treasurer, and the company bas continued ever since to emjoy the benefit of the proceeds of said discount with- out any offer to return the consideration, then the railway company is not entitled to set up the defenoe upon which it relies.* �Ttie answer of Mr. Irons is filed separately. He denies that the plaintiff is the cymex or holder of the note. It avers that the note was made by the defendant herein and bis co-defendants, «xcept the railway company, jointly and severally, and all as principals, for the, accommodation of said railway company, and loaned to it upon the agreement and understanding that said company should, upon the maturity of said note, pay the same, and that the proceeds of said note should be applied exclusively by said company to the purchase of right pf w^for said company's road, and the further construction and Gompletion of the same; of ^1 which the plaintiff had due notice before said note came into plaintiff's possession. He alleges that the note came into the possession'of the plaintiff without the knowledge or consent of himself or of any of his co-defendants, and with notice that the proceeds would be applied to the payment of debts of said company incurred prier to the making of said note, and to purposes other than those aforesaid for which said note was made. He further alleges that no part of said proceeds was applied by said plaintiff to the purposes aforesaid for which said note was made, nor by any other person to whom they may have paid the same. The thjrd defence alleges the insolvency of the railway company prior to the time when the note came into the possession of the plaintiff, and its final and complete suspension of work upon its road, and all attempts to complete the same, whereby, and in consequence of other tacts in the prior defence which I have just read, of which it is alleged the plaintiff also had notice, it is claimed that the negotiation of the note was illegal. The fourth defence alleges the circumstances in reference to the original deposit of the note with the Lebanon Na- tional Bank, and claims that possession of the note was obtained from the Lebanon National Bank without the authority, knowledge, or consent of the defendants. The fifth defence denies that Sellers, as treasurer, assigned or transferred the note to the plaintiff, or that the railway company authorized him to do so. Then cornes the �*Siniilar case : JVew Hope, etc.. Bridge Co. v. Phœnix Bank, 3 Comst. (N. T.) 156.— [Rbp. ��� �