tations were false; that the property was not free from incumbrance, but was subject to a judgment lien of some $700 against the defendant. Thereupon, immediately, as the bill avers, he tendered back a conveyance of the property, and demanded a return of the consideration money. There are various objections to the form of the bill, and some of them, perhaps, may be good, in strictness, if we were to consider them with very great nicety and technicality; but the only matter of substance is the question, whether there is an allegation of injury or damage here which is sufficient to give the complainant a right to relief in equity. He avers, as will be observed, that there was an incumbrance upon this property; ,that the representation was that it was free and clear from incumbrance. There is no allegation that the incumbrance has been enforced, or that complainant has been obliged to pay it in order to maintain his possession, ai' anything of that sort, The rule in equity is that it is not sufficient to charge a fraud simply, but you must charge also some injury as the result of the fraud. I think, however, that there is an mjury charged here. The rule does not require any considerable damnge. A slight injury as the result of a fraud will give the party inj ured the right to bring his action and cancel the contract; and I think it may be said that where a man represents that a piece of real estate is free antI clear of incumbrance, when in fact it is subject to incumbrance, and induces another to take it upon the belief that his representations are true, there is an injury. Heal estate is not worth so much when it is incumbered as it is when it is not incumbered. The party who buys real estate upon the belief that it is free and clear from incumbrance, finding afterwards that he has been cheated in that respect, is not bound to keep it. He may return it. It is also insistetl that the records were sutIicient to give notice to the purchaser of the judgment liens complained of. But the rule in regard to matters of this sort is that the purchaser has a right to rely upon the representations of the grantor, and is not bound to search the records to .find whether they are true or not. The demurrer to this bill will be overruled, and the defendant will answer in 60 days.
and others, Trustees, v.
(Circuit Court, D. Kflnsas.
T. & S. F. 11. Co.
here a large body of land IS conveyed to trustees to secure the payment of the principal and interest of a great numher of railroad honds, which have a long time to run before maturity, and the grantor, lhe railroad company, in the trnst deed reserves the right to the lauus and pay the proeee,ls of the sales thereof to the trustee, after deducting expenses incurred in executing the trust, it may ret'lin the proper amount for expenses in making the sail'S, and may also pay the taxes out of the procet:ds thereof.
NICKERSON. V. ATCHISON, T. & S. F.
CONTRACT-CONSTRUCTION ADOPTED BY PAnTIES TO.
·Where the meaning of a contract is doubtful, the fact tllat the parties thereto at ouce adopted a particular construction, and for many years acquiesced in and acted upon it, should lead a court without hcsitation to adopt that construction as the proper onc.
In Equity. Ross Bnms, J. G. Waters, A. A. Hurd, and S. O. Thacher, for complainants. Geo. R. Peck, for respondent. :MCCRARY, J. The sole question to be decided upon this demurrer is whether the expenses attending t-he sale of the lands by the railroad company are properly to be classed as "expenses of executing the trllst;" in other words, we are to determine, from an inspection of the whole instrument, whether tbe parties intended that the railroad company should make sales of the lands and pay oyer the gross proceeds to the trustees, deducting nothing for expenses. It is very clear, we think, that the sale of the lands was regarded by the parties as a part, and a very important part, of the execution of the trust. The debt secured was very large, and the bonds are not to mature until October 1, 1900. The evident intention of the parties was that the land should be sold as rapidly as possible, and the proceeds applied, after paying expenses of sale, to the dischargtl of interest as it accrued, and the creation of a sinking fund for the payment of the principal. By the terms of the mortgage the railroad company was to retain possession and control of tlw land, with power to dispose of the same for cash, or partly for cash and partly on credit, on reasonable terms. In effect the railroad company was constituted the agent of the trustees and bondholders to sell the land, and pay over the proceeds, "after deducting the expenses of executing this tl'ust," to the trustees, to be applied upon the payment of the mortgage debt. The proceeds of the sales, "after deducting the expemes of executing" the trust, were pledged for the payment of the bonds and interest, and, of coarse, only the moneys so pledged were to be paid over to the trustees. It is true that certain duties were devolved upon the trustees, and their expenses, including sums paid to clerks, agents, and attorneys, were to be paid; but we cannot assent to the proposition that these were the only expenses to be deducted from the proceed of the sales. The parties saw fit to so frame the contract as to devolve upon the railroad company many important duties in connection with the execution of the trust, and we must presume that the large expenditures on the part of the company, made necessary by the contract, were in the intention of the parties to be included in the expenses of carrying out the agreement. The mortgage abounds in provisions regulating the sale of the lands and the application of the proceeds thereof. This feature of the contract set forth in the mortgage is so prominent as to make it ,'ery
apparent that its beregarde'das pad' and p'ared of the execution of the trust expressed therein. We are, therefore, of the opinion that the railroad' company was authorized to retain out of the proceeds of' the sitle"of the lands embraced in the mortgage its reasonable expenditures incurred making such sales. The bill does not aver that the expenditures 01 the raill'oad were unnecessary orlmreasonable; and it must, therefore, be considered as only raising the question whether the railroad' company was entitled to make any charge for selling the land, and to deduct the same from the proceeds of the sales. . The bill further alleges that a large sum has been paid by the company, out of the proceeds of sales of land, for taxes upon the same. As legal taxes were liens upon the land prior and paramount to any claim under the mortgage, it is difficult to see upon what ground their payment can be regarded as an expenditure outside of the trust. " The railroad company, by the terms of the mortgage, was to be suffered and permitted to possess, manage, use,' and enjoy the lands in the same manner and with the same effect as if the deed of trust and mortgage had not been made, except as in the instrument etherwise provided; and it was, as we have already seen, to be allowed to manage the matter of selling the lands. The control, management, and sale of the lands by tha railroad company was, therefore, provided for as part of the contract and of the trust. 'rhe payment of the taxes accruing from year to year was plainly a part of the proper management of the estate. If it had been neglected, the whole prop'erty would have been lost, and the bondholders would have been the chief sufferers. If the land had been sold subject to the taxes, the price received for it would have been correspondingly less, and therefore no damage has resulted to any of the parties interested by reason of their payment. We are, therefore, clearly of the opinion that the payment of the taxes was properly within the duties devolved upon the company in the management and sale of the lands. If we were in doubt as to either of the questions raised by the demurrer, the fact that the parties themselves who made the contract at once adopted the construction above suggested, and have for many years acquiesced in and acted upon it, would lead us, without hesitation, to resolve our doubts against the claims of the complainants. The trustees, acting upon the theory that the company was entitled to retain the expenses in question, including sums paid for taxes, have from time to time received the net proceeds of sales ascertained upon basis, and have voluntari,ly executed releases in. accordance WIth. the terms of the mortgage. It is not necessary to determine whether such action, continued for so long a. period, is an absoestoppel, which deprives them of the privilege of now being heara to assert that'this construction was erroneolis. !tis :enough to suy