clearly establish the fraudulent representations of Silva as claimed by the complainant; but that, on the contrary, the material facts and circumstances as disclosed by the record are entirely compatible with the theory that Silva did not make the representations charged against him, or, at most, that he merely gave expression to an opinion as to the extent of the ore body, erroneous though it proved to be. This would not constitute fraud. In the language of the court below: "This testimony was taken in June, 1866, about two and a half years after the conversations took place. They were present at the time, examining the mine, and engaged in conversation for an hour or more. These discrepancies in matters of detail during a long conversation, related by different parties, viewing the subject from different stand-points after the lapse of so long a period of time, are no more than might reasonably be expected, even in honest witnesses. There is no occasion to impute any intention to testify falsely to either. * ** Parties are extremely liable to misunderstand each other, and, in looking back upon the transaction in the light of subsequent developments, are prone to take the view most advantageous to themselves." As to the third alleged representation,-to-wit, that there were not less than 500 tons of ore in and about that ore chamber,--Silva, both in his answer and in his testimony, denies that he ever told Yerington and Forman, or anybody else, that there were 500 tons of ore there, or that there was any amount fixed or agreed upon by them as to the quantity of ore there; while the testimony of both Yerington and Forman is to the effect that Silva said, in his opinion, or in his judgment, there were 500 tons of ore in the chamber. So that, taking the strongest testimony produced on the part of complainant upon this point, it simply amounts to an expression of opinion on the part of Silva as to the amount of the ore in the chamber, and not a statement of fact. It therefore does not constitute fraud. It is equally true that any statements that may have been made by Silva with reference to the value of the mine, cannot, under the circumstances of this case, be considered an act of fraud on his part sufficient to warrant a court of equity in setting aside the contract herein. Yerington testifies that Silva said he had been asking $15,000 for the mine, but that he would take $12,500; while Forman says he does not recollect that Silva made any statement as to the value of the mine, but that he heard Silva say he thought it was worth $15,000. Such statements are not fraudulent in law, but are considered merely as trade talk, and mere matters of opinion, which is allowable. Gordon v. Butler, 105 U. S. 553; Mooney v. Miller, 102 Mass. 217. Moreover, it is clear, beyond question, that Yerington did not purchase the mine upon Silva's representations as to its value, as we shall hereafter see. This disposes of all the alleged fraudulent representations, as arranged above, except the last, adversely to the complaint; and it is to this one that attention will now be directed. This charge is, substantially, that Silva represented to Yerington and Forman, when they visited the mine in January, 1884, and had gone through it, that he had shown them all the work which had been done in and about the mine that would throw any light on the quantity of ore therein. This representation is alleged to have been false and fraudulent, and well known by Silva to be such, because at a cut a short distance from the mouth of the main tunnel, at a point known as the "point of location," a little hole o♦ shaft had been sunk which had been filled up, and was not observable at the time of the examination of the mine in January, 1884, and also because there had been a number of drill-holes made in the sides of the ore chamber, and afterwards filled up before the examination in January, 1884, so that they were not observable at that time; which holes clearly developed the fact that the ore about the chamber was nothing more than a shell, instead of a continuous body, as it appeared to the observer. The existence of the plugged-up drill-holes in the sides of the ore chamber is the worst feature of the case against Silva. They could not have been made by a former proprietor of the mine, as is slightly claimed in his behalf; for, as has been already shown in this opinion, Silva himself, or at least persons in his employ, had excavated that chamber after he had purchased it from one Edwards, in 1876. And certain it is that the drill-holes were found plugged up within a short time after he had sold the mine to the complainant company, March 15, 1884. The question is, did Silva know of their existence at the time he sold the mine, and, having such knowledge, did he falsely represent to the complainant that he knew nothing of them, thereby inducing complainant to act upon such representations? Upon this question the evidence is somewhat conflicting. Yerington testifies that after going through the mine, he asked Silva if he had shown him the whole of the mine, and he replied that he had. And Forman testifies that Silva, in reply to a question from him, said that he had shown him all the work that had been done in and about the mine that would throw any light upon the quantity of ore in the mine, or the extent of the ledge or deposit. Silva admits that, in reply to a question by Yerington, he told him that he had shown him all the work that had been done in and about the mine, either by himself or under his direction. So that the question is narrowed down to simply this: Were said drill-holes in existence at the time Silva made such statement? If so, had they been made by him, or under his direction, or did he know of their existence? In his sworn answer Silva expressly "denies that he drilled any such hole or holes through the ore into the country rock or otherwise, or thereby or at all discovered the extent of said ore, or that he filled up said drill-holes, or concealed them from view, or kept them secret from complainant," etc.; and in his testimony he also denies having any knowledge of their existence. He says that he drilled no holes in the mine except what he had to do as a miner, and that he concealed nothing from Yerington when he showed him the mine. And again he says: "I showed Mr. Yerington all the work that was done in the mine that I knew anything of." There is no direct evidence going to show who drilled the holes; and there is nothing in the entire record to connect Silva with them, except the fact that he was the owner of the mine, and was in possession of it at a time when it is most likely they were drilled. But this circumstance alone should not outweigh the positive denial of Silva in his answer, and also in his equally positive denial in his testimony, of his knowledge of the existence of said drilled holes. The law raises no presumption of knowledge of falsity from the single fact per se that the representation was false. There must be something further to establish the defendant's knowledge. Barnett v. Stanton, 2 Ala. 181; McDonald v. Trafton, 15 Me. 225. This rule is fortified by the consideration that, had he known of the limited quantity of ore in and about the "ore chamber," Silva would hardly have gone to the expense and labor of starting a drift from the bottom of winze No. 1, and constructing it for a certain distance, before the sale of the mine, for the purpose of reaching the supposed downward extension of the ore in and about that chamber. Knowing that the ore body terminated within a few inches of the surface of the chamber, and then, in the face of that knowledge, actually constructing a drift on the 82-feet level, at enormous expense, for the purpose of getting under that limited quantity of ore, would not appear a reasonable thing to do by any one, especially by such an experienced and practical miner as Silva is admitted to have been. The testimony, therefore, and all the other facts and circumstances of record, do not substantiate complainant's theory of the case on this point; in other words, there is not a satisfactory case of fraudulent representations on this point made out,-not such a case as would justify the interposition of a court of equity to set aside the contract under consideration on the ground of fraudulent representations. As regards the little hole or shaft that had been sunk at the "point of location," and afterwards filled up, so that it was not observable at the time of Yerington's visit in January, 1884, there is absolutely no testimony at all to show that Silva knew anything about its existence. He had done no work at that place, or very little at most, and was using the cut there as a sort of kitchen. The sides of the cut indicated that there was a ledge of ore there. It is admitted that Forman asked Silva why he did not "go down" on that ore, and that he replied that he considered the tunnel the best place to mine. Silva denies, both in his answer and in his testimony, that he ever knew that a shaft had been sunk at the point of location, and no one is found who can testify that he did know anything about it; on the contrary, the former owner of the mine, one Edwards, testifies that he himself dug that shaft, and filled it up, prior to the time Silva purchased it, and that to his knowledge Silva did not know anything about that shaft. It is essential that the defendant's representations should have been acted on by complainant, to his injury. Where the purchaser undertakes to make investigations of his own, and the vendor does nothing to prevent his investigation from being as full as he chooses to make it, the purchaser cannot afterwards allege that the vendor made misrepresentations. Atwood v. Small, supra; Jennings v. Broughton, 5 De Gex, M. & G. 126; Tuck v. Downing, supra. The evidence abundantly shows that Yerington had been willing to give $10,000 for the mine prior to the time he visited it, and made his examination, in January, 1884. He had made inquiries of various persons for months previous to that visit. Several experts in his employ had visited the mine, had taken samples of ore from it; and it must have been from reports thus received that Yerington had made up his mind as to what the mine was worth. From the letters of an agent (Woods) to Eddy, the testimony of the witness Boland, the testimony of the witness Anthony, Eddy's testimony, and from the testimony of Silva himself, there can be no doubt that Yerington had offered $10,000 for the mine several months before he had ever seen it; thus showing that his examination of the mine in January, 1884, merely went to corroborate the reports that he had received of it from his experts, Forman, Bliss, et al., and that it was upon such reports, and his own judgment after an examination of the mine, that he made the purchase of it. From all which it is clear to this court that the complainant has not proven his case, and the decree below is affirmed. SAGE v. MEMPHIS & L. R. Co.1 1. RAILROAD COMPANIES-INSOLVENCY-RIGHTS OF JUDGMENT CREDITORS-APPOINTMENT OF RECEIVERS. Where a judgment creditor of a railroad, in a suit in behalf of himself alone to have a receiver appointed to protect his interests, sets forth the precarious condition of the road, and the necessity of a receiver, but does not sue out execution, beeause it would be useless, and no objection is made for such failure, the appointment of a receiver is within the power of a court of equity 2. SAME-RIGHTS OF MORTGAGE BONDHOLDERS. The holders of over-due railroad bonds, secured by mortgages on the railroad, are not entitled to the net earnings of the road in the hands of a receiver, appointed in a suit by a judgment creditor for the protection of his interests, when they have made no demand therefor under the provisions of their mortgages, even although in his suit such creditor, by the words of his bill, seeks relief subject to their rights. 3. SAME PROMISSORY NOTE-ENDORSEMENT RIGHTS OF HOLDER. A purchaser of a promissory note executed by defendant railroad, who obtains judgment thereon, is not precluded from seeking satisfaction of the same out of the earnings of the road because he has not yet paid for the note, being under legal obligation by the indorsement, which he recognizes, to pay the amount agreed. Reversing 18 Fed. Rep. 571. Appeals from the Circuit Court of the United States for the Eastern District of Arkansas. The decree from which these appeals are taken relates to the distribution of a fund in the registry of the circuit court arising from the operation by its receiver of the Memphis & Little Rock Railroad Company, (as reorganized.) The decree directed it to be paid to the surviving trustees in a certain mortgage executed by that company, for distribution among the beneficiaries under said mortgage. Sage and the railroad company each complain of that decree; the former insisting that the money should have been applied in satisfaction of a judgment obtained by him against the company, while the latter insisted that it was entitled to receive it. The history of the claims of the respective parties is as follows: On the 24th day of June, 1882, the Memphis & Little Rock Railroad Company, (as reorganized,) in an action brought by Russell Sage on that day in the circuit court of the United States for the Eastern district of Arkansas, confessed judgment in his favor for the sum of $125,921.13; that sum being the aggregate amount, principal and interest, of a demand note for $115,479.03 executed by that company June 20, 1882, to the president of the Missouri Pacific Railway Company, and indorsed by him to Sage, and of another note of $10,000 held by the latter against the same defendant. On the same day on which this judgment was entered, Sage commenced in the chancery court of Pulaski county, Ark., a suit in equity against the Memphis & Little Rock Railroad Company, (as reorganized.) The bill, after setting out the judgment, alleged that the entire tangible property of the company consisted of its railroad,-extending from its junction with the St. Louis, Iron Mountain & Southern Railroad, through the counties of Pulaski, Lonoke, Prairie, Monroe, St. Francis, and Crittenden, to the Mississippi river, an inclined track used to transfer its rolling stock across that river to Memphis, a steam-boat, certain lands and depot in that city, locomotives, cars, and other property, such as are usually employed in the management of a railroad; that the defendant by deed of May 1, 1877, duly recorded, mortgaged its property to trustees to secure the payment of bonds amounting to $250,000, and maturing, in installments of $50,000 each, on the 1st day of May, in the years 1879 to 1883, inclusive, of which installments four were then due and unpaid; that by deed of May 2, 1877, duly recorded, defendant mortgaged its property, rights, and franchises of every description to secure the payment of other bonds, with coupons attached, amounting to $2,600,000, payable July 1, 1907, and bearing interest after July 1, 1882, at the rate of 8 per cent. per annum; that both of said mortgages authorized the trustees to take possession of and sell the mortgaged property upon the non-payment of any of the bonds or interest at maturity; that the aggregate amount of the mortgages exceeded the saleable value of the property and franchises of every description owned by the company, or, at least, the sum for which they would sell under execution; that, by reason of the existence of the mortgages, no bidders could be found at more than nominal amounts for the property; that, a large part of the bonds secured by the mortgages being due and unpaid, the trustees would interfere with the sale of any part of the property under execution if the plaintiff should attempt, in that mode, to enforce payment of this judgment; and that for these reasons the suing out of execution upon such judgment would cause useless expense and delay, and result in no benefit whatever to plaintiff. The plaintiff also alleged that if the company's property was held together, and carefully used in the transportation of passengers and freight, it would produce a large income, sufficient to pay all operating expenses and necessary repairs, leaving each year a large surplus to pay off and discharge plaintiff's debt; that such income could be made only by working the property as a unit, for purposes of transportation; consequently the seizure and sale of it, or of any material part thereof, would destroy its capacity to produce such income, without benefit to the plaintiff, and at the same time incommode the public by destroying the use of the road in the manner contemplated by the state. The bill further alleged that the company had hitherto failed and refused to apply its surplus income to the payment of its debts, and unless prevented would continue in that course, and apply its surplus to other uses, to his great injury and loss. The relief asked was that the court take possession of and operate the road by a receiver, and in that manner seize upon the only means in reach of the law for satisfying the plaintiff's demands; such relief to be subject to all the rights and equities of the holders of bonds or of said trustees. The railroad company appeared and waived notice, and, the court being of opinion that the relief asked was necessary for the protection of the plaintiff's interests and rights, E. K. Sibley was appointed receiver. He was directed to take possession of the entire railroad, with the inclines, connections, tracks, depots, rolling stock, books, papers and all other property of the company of every kind. The company was ordered to surrender possession, and the receiver directed to operate the railroad, in the usual manner, in the carriage of passengers, freights, and express matter; keeping account of all receipts and expenses, and making report of all his acts and doings as might be required. Such surrender was made, and possession was taken by the receiver. John L. Farwell and Robert K. Dow, as stockholders of the company, respectively intervened, October 14, 1882, and November 1, 1882, as defendants, and assailed the proceeding in which the receiver was appointed as being merely a financial expedient by which Sage and others could make a successful speculation in the stocks and securities of the company. They charged that the company was not really indebted to Sage in any sum, and, among other things, they asked that he be enjoined from prosecuting his judgment, and that the receiver be discharged. On the 10th of November, 1882, they filed their respective petitions for the removal of the cause to the circuit court of the United States, and it was so removed. On the 1st of December, 1883, Dow and many others, holding judgment rendered by default upon preferred mortgage and general mortgage coupons, filed their claims. These judgments aggregated nearly $200,000. Two days thereafter, December 3, 1883, an order was entered requiring the receiver at once to surrender to the railroad company all the property of whatever kind in his custody as receiver; to pay out of the money in his hands all sums and dues authorized by the order appointing him; to retain the balance subject to the order of the court: and to make full report of his acts, showing what moneys he had received, and for what purpose they had been expended. The order declared that the railroad and other property in the hands of the receiver were delivered to the defendant only upon the condition-to which it assented-that it assume all the liabilities of the receiver, and agree to pay and discharge, out of the property or its income, all demands which might be legally established by judgment against the receiver; in default whereof the court might retake possession, and, by proper order, enforce the payment of such judgments. On the 12th day of February, 1884, the receiver filed a report of his administration of the property, from which it appeared that there were a few unsettled accounts for traffic balances due to and from him, which he was unable to adjust. The company assuming in open court to pay such balances as were due from the receiver, it was, by consent of the parties, ordered that the receiver transfer to it all balances due to him, and that it receive and retain them for its own. use. Thereupon the complainant filed a petition praying that the receiver, out of the funds in his hands, pay his judgment in the bill mentioned. The defendant filed a motion to strike from the files sundry claims of H. Sanford and other creditors of the defendant, and that the money in the hands of the receiver, after paying the amount due the complainant, be paid to the defendant, and to certain named creditors. Upon the hearing, February 14, 1884, of the motion to strike out the claims of H. Sanford and others, said creditors re |