The appellees, who were complainants below, filed their bill in equity, as assignees in bankruptcy of the Boston, Hartford & Erie Railroad Company, against Samuel Clark, general treasurer of the state of Rhode Island, and the city of Boston and Frederick U. Tracey, its treasurer. The bill alleged-
That the Boston, Hartford & Erie Railroad Company was a corporation created by the states of Connecticut and Massachusetts for the purpose of building, acquiring, and operating a railroad from Boston, in Massachusetts, to Willimantic, in Connecticut, and from Providence, in Rhode Island, to Willimantic, and from Willimantic through Waterbury to the state line of Connecticut, and thence to Fishkill, in New York; that the directors of the company, without authority from the corporation or by law, applied to the legislature of Rhode Island in 1869, and obtained the passage of an act entitled 'An act in addition to an act to ratify and confirm the sale of the Hartford, Providence & Fishkill Railroad to the Boston, Hartford & Erie Railroad Company,' by which the company was authorized to locate and construct a railroad in extension of their line of railroad purchased of the Hartford, Providence & Fishkill Railroad Company, commencing at their depot in Providence, thence running to the easterly line of the state in or near the village of Valley Falls, to meet and connect with a Massachusetts railroad extending through North Attleborough from Boston, so as to make a continuous line of railroad in a northerly and southerly direction between Providence and Boston; that this act contained a provision in the following terms: 'This act shall not go into effect unless the said Boston, Hartford & Erie Railroad Company shall, within 90 days from the rising of this general assembly, deposit in the office of the general treasurer their bond, with sureties satisfactory to the governor of this state, in the sum of $100,000, that they will complete their said road before the first day of January, A. D. 1872;' that this condition was not complied with, and that the said act, therefore, never took effect and is wholly null and void; that, after the passage of the act, the directors and officers of the corporation, without authority and in abuse of their trust and duty, filed with one Samuel Parker, then the general treasurer of Rhode Island, a paper, purporting to be the bond of the corporation, but without sureties, and fraudulently took of the funds of the corporation the sum of $100,000, and deposited the same with the city treasurer of Boston in exchange for the obligation of that city, a copy of which is as follows:
'TEMPORARY LOANS, CITY OF BOSTON.
'$100,000.
No. 6.
'This certifies that, for value received, there will be due from the city of Boston, payable at the office of the city treasurer, on demand, after the first day of December next, to the general treasurer of the state of Rhode Island, or order, the sum of $100,000, with interest at the rate of 7 per cent. per annum, in current funds.
'This loan being authorized by an order of the city council passed the ninth day of June, 1869, to anticipate the income of the present financial year.
'Interest will not be allowed after this note is due.
'June 28, 1869.
ALFRED T. TURNER, Auditor.
'FRED. U. TRACEY, Treasurer.