By order of court, the petition of intervention was considered as an answer to the bill of foreclosure. Other stockholders of the bridge company, residents of Iowa, intervened and adopted the pleadings filed by Kendrick. The answer of Phoenix denied the charges of fraud and alleged that the corporation was the owner of a large amount of the bonds. Inasmuch as the district court found that Phoenix Finance Corporation was in all respects so far as concerns this case the successor of Phoenix Finance System, Inc., and was managed by the same officers, both corporations are hereinafter indiscriminately referred to as Phoenix. Thereafter Phoenix Finance Corporation appeared and filed answer to the petition of intervention. Kendrick then moved that certain corporations alleged to be controlled by Thompson including Phoenix Finance System, Inc., and Phoenix Finance Corporation, Delaware corporations, be made parties. Thompson and his associates that by the exercise of such domination these men had fraudulently procured the execution and delivery of the trust deed and the issuance of the bonds to themselves or to corporations controlled by them. He alleged that the bridge company was and had been since 1930 dominated by one J. Kendrick, a stockholder of the bridge company and citizen of Minnesota, intervened on behalf of defendant, praying that the complainants' bill be dismissed, the bonds cancelled and the deed of trust set aside. On December 5, 1933, by leave of court, Fayette D.

On September 26, 1933, the court appointed a receiver of all of the property of the bridge company with direction to take immediate possession and to operate its business.

The defendant bridge company filed answer September 25, 1933, admitting the jurisdiction of the court, the execution of the trust deed and the issuance of the bonds denying complainants' right to the appointment of a receiver alleging that a part or all of the bonds secured by the trust deed were *419 invalid and praying the protection of the court. The prayer was for foreclosure and sale and the appointment of a receiver. The bill alleged jurisdiction based upon diversity of citizenship, the authority of the trustees to sue under the terms of the trust deed, default, and acceleration of the due date. On August 28, 1933, the bill of foreclosure was filed in the district court by the trustees, complainants, against the bridge company, defendant. The grantor, Iowa-Wisconsin Bridge Company, is a Delaware corporation. The trustees named therein were the Bechtel Trust Company, now called First Trust and Savings Bank, an Iowa corporation, and A. It conveyed to the complainant trustees all the property of the defendant including a bridge across the Mississippi river at Lansing, Iowa. The trust deed, dated January 1, 1932, but actually executed February 20, 1932, was given to secure a bond issue of $200,000. This is an appeal in equity from a decree denying foreclosure of a Mortgage Trust Deed.

Paul, Minn., on the brief), for appellees.īefore GARDNER, WOODROUGH, and THOMAS, Circuit Judges. Louis, Mo., on the brief), for appellants. Gladney and Jones, Hocker, Gladney & Grand, all of St. Ĭircuit Court of Appeals, Eighth Circuit.

Wisconsin overpass