City and County of New York, ss.:

R. G. ROLSTON, being duly sworn, deposes and says, that he is the President of the Farmers' Loan and Trust Company, the plaintiff in the above-entitled action; that he has read the foregoing Amended and Supplemental Complaint; the same is true of his own knowledge, except as to the matters therein stated on information and belief, and as to those matters he believes the same to be true. Sworn to before me, this 24th

day of September, 1877. [

JOHN H. HENSHAW, Notary Public, New York County.

R. G. ROLSTON.

The answer of the defendant the Erie Railway Company to the amended complaint of the plaintiff in the above-entitled action.

The said defendant, The Erie Railway Company, by Shipman Barlow, Larocque and MacFarland, its attorneys, admits that the several allegations contained in the plaintiff's Bill of complaint are true. SHIPMAN, BARLOW, LAROCQUE & MACFARLAND, Attorneys for Defendant, The Erie Railway Company.

City and County of New York, ss:

AUGUSTUS R. MACDONOUGH, being duly sworn says, that he is the Secretary of The Erie Railway Company, one of the defendants in the above-entitled action; that the foregoing answer is true to his own knowledge, except as to the matters therein stated to be alleged on information and belief, and as to those matters he believes it to be true. AUGUSTUS R. MACDONOUGH.

I.--That the defendant, the Erie Railway Company, is a corporation duly created and existing under and by virtue of the laws of the State of New York; and said company has a corporate existence under certain laws of the State of New Jersey, and also a like corporate existence under certain laws of the State of Pennsylvania; that said company, up to the time of the appointment of a Receiver, hereinafter referred to, had, since its organization in 1861, been engaged in the operation of its main lines of railroad, extending from Jersey City and from Piermont, on the Hudson River, in part through the States of New Jersey and Pennsylvania (being in the counties of Pike and Susquehanna in the latter State), but mainly in the State of New York, from said places to Lake Erie, being situated in the counties of Orange, Delaware, Sullivan, Allegany, Cattaraugus, Chemung, Broome, Chatauqua, Tioga, Steuben, and Rockland, and a portion of the property covered by the fifth and supplemented mortgages is situated in the county of New York; and also in the operation of various branch roads and leased lines hereinafter referred to.

That on the 26th day of May last, in a suit brought by the People of this State through their Attorney-General, Hugh J. Jewett, Esquire, was appointed a Receiver of the property, rights, and franchises of the said company, as by the order of appointment will more fully appear, and thereupon said Jewett entered into the possession and has since been engaged in the operation of the roads and leased lines of said corporation, and is now in the possession and engaged in the operation of the same. That the appointment of said Receiver was made, as appears by the complaint and proceedings in said suit, by reason of the said company having been insolvent for more than a year last past, and in said suit no question is raised as to the validity of the fifth and prior mortgages, hereinafter referred to; and the plaintiff on information and belief alleges that suits in aid of that of the People aforesaid have been instituted in the States of New Jersey and Pennsylvania, respectively, and that by orders therein the receivership of said Jewett has been extended to the property and franchises of said corporation in each of said States.

II.—That since the defendant the Erie Railway Company commenced the operation of said lines it has from time to time acquired additional engines, cars, other rolling stock, and supplies and material for the use and operation of its said lines, which property has been used thereon, and is now in the possession of said Receiver, and is necessary for the operation of said roads. That said company has also acquired various rights and interests by way of lease and contract with other corporations, some of which corporations are railroad corporations, which own or operate railroads running in connection with said lines, and other of said corporations are coal, or mining, or other business corporations which have important relations and connections with the corporation defendant, and by statute the corporation defendant has acquired certain additional authority or franchises in one or more of said States; and on information and belief this plaintiff alleges that all said rights and property, whether real or personal, and all

said franchises, by virtue of the provisions of the fifth and supplemental mortgages hereinafter referred to, and of the law thereto applicable, come under and are subject to a lien thereon by or in favor of the said fifth and supplemental mortgages, and the bondholders thereunder interested.

III.—That prior to the 9th day of June, 1860, there existed in the State of New York a duly organized railroad corporation known by the name of the New York and Erie Railroad Company, legally recog. nized in the other States aforesaid, which corporation owned and possessed the greater portion of the property and franchises hereinafter mentioned, and also operated the main lines of roads hereinbefore referred to, in said States. That said New York and Erie Railroad Company, under certain statutes of the State of New York, issued a series of bonds, in the year 1847, which bonds, being over two millions in amount, are commonly spoken of and are herein designated as the first mortgage bonds, and said statute is spoken of as the first mortgage; that the last named corporation also in the year 1849 executed its certain mortgage, herein and commonly designated as its second mortgage, under which it issued two millions and upwards of its bonds, which are in like manner designated as second mortgage bonds. That in the year 1853 the last named corporation executed a certain mortgage, herein and commonly designated as the third mortgage, under which it issued bonds in the amount of over four millions of dollars, which bonds are in like manner designated as third mortgage bonds. That in the year 1857 the last named corporation executed its certain mortgage, herein and commonly designated as the fourth mortgage, and thereunder issued bonds in the amount of over two millions of dollars. Of said first mortgage bonds there are now, as this plaintiff is informed and believes, outstanding in the hands of bona fide holders, in amount $2,483,000; of said second mortgage bonds $2,174,000; of said third mortgage bonds $4,852,000; of said fourth mortgage bonds $2,927,000; which bonds are respectively secured by the mortgages aforesaid, which remain a valid lien upon the property, rights and franchises in said mortgages respectively mentioned, and for the payment of the principal and interest of which the corporation defendant has been, since its organization, and is now, liable. That under said third mortgage (as modified by a subsequent agreement), and under said fourth mortgage, respectively, this plaintiff, and the defendant James Brown, are the sole trustees, and no interest, as this plaintiff is informed and believes, is in arrear upon any of the aforesaid bonds, secured by either the first, second, third or fourth mortgages.

IV. That on or about the first day of June, 1858, said New York and Erie Railroad Company executed and delivered to said Brown and Davis, as trustees and parties thereto, a mortgage upon the property, real and personal, and rights and franchises and income of the last named corporation, in each of said States, which commonly and is herein designated as the fifth mortgage. It was executed for the purpose of securing an issue of bouds, commonly and herein called the fifth mortgage bonds. Said mortgage provides for the issue of a series of four thousand bonds, of $1,000 each, and two thousand bonds of $500 each, being five millions in all, of a like tenor and date, in and by which it was provided that interest should be paid thereon at the rate of seven per cent. per annum, payable one half semiannually, on the first days of June and December in each year. Of these bonds there was issued an amount of about two millions of dollars, of which a considerable portion have been retired, so that there is now outstanding of the said bonds, as this plaintiff is informed and believes, only an aggregate amount of $709,500, which are held by bona fide owners thereof; and said fifth mortgage still remains a valid and subsisting lien upon the property, rights and franchises therein mentioned, for the security of the bonds last aforesaid.

V. That the last named corporation, soon after the making and delivery of said fifth mortgage, also executed and delivered to said last named trustees, as parties thereto, for the better securing of the last named bonds, another mortgage, bearing date on the 12th day of August, 1859, commonly and herein designated as the supplemental mortgage; but under this last mortgage no bonds were specially issued, and the same remains a valid, subsisting lien upon the property, rights and franchises therein mentioned; and each of the aforesaid mortgages was duly recorded soon after the date thereof, and still remain of

record in the several counties in which any portion of the mortgaged property is situated, in each of said three States.

VI. That in or about the month of August, in the year 1859, default having been made by said New York and Erie Railroad Company in the payment of interest upon said fifth mortgage bonds, this plaintiff and his co-trustees instituted a suit in the county of Broome, in the State of New York, against said New York and Erie Railroad Company and others, for the purpose of foreclosing the said fifth and supplemental mortgages; that in and by the complaint in said action, such facts were stated, and thereafter such proceedings were had in said suit that said court acquired jnrisdiction thereof, and the same was carried forward to a final decree of foreclosure and sale, which was entered therein in the County of New York, to which the venue had been changed at a Special Term, holden at the City Hall therein, on the 9th day of June, 1860, wherein and whereby said New York and Erie Railroad Company, and all persons having any lien on said mortgaged property were foreclosed, and said property was ordered to be sold by a referee appointed by said Court, for the purpose of procuring the means of paying the judgment entered in said suit in favor of the holders of the said fifth mortgage bonds, and others whose interest was in arrear. And pursuant to such judgment, a sale of said mortgaged property, rights and franchises was made, in and by which, and certain intermediate sales and transfers, said property, rights and franchises so mortgaged came into the possession and ownership of the Erie Railway Company.

VII. That in and by two Acts of the Legislature of the State of New York, one entitled "An Act relating to the foreclosure and sale of the New York and Erie Railroad," passed April 4th, 1860, and the other entitled "An Act in addition to an act relating to the foreclosure and sale of the New York and Erie Railroad," passed April 2d, 1861, provision is made for the creation of a new corporation for the purpose of acquiring the property, rights and franchises so foreclosed, and under the provisions of said act certain articles of association were formed on or about the 30th day of April, 1861, in and by which certain persons, in conformity thereto, formed themselves into a railroad corporation under the name of the Erie Railway Company, which is the corporation defendant. And thereupon, having acquired said property, rights and franchises by virtue of the sales and transfers aforesaid under said foreclosure, said new corporation entered into the possession and enjoyment of said property, and to the exercise of said franchises. VIII. That at or near the dates of said judgment of foreclosure in the State of New York, such proceedings were taken in certain suits instituted in the States of New Jersey and Pennsylvania, respectively, in aid of said foreclosure, that final judgments were entered therein near said dates, in and by which it was adjudged that said New York and Erie Railroad Company and all persons having subsequent liens to that created by said fifth and supplemental mortgages upon said property, rights and franchises, be, and they were, in each of said States, thereof foreclosed; and it was further adjudged in each of said States, as this plaintiff on information and belief alleges, that said property, rights and franchises should be treated in each of said States as having passed to the purchaser by virtue of the sale and transfers in the State of New York; and on information and belief this plaintiff further alleges that in each of said three States, and in the several suits aforesaid, orders of confirmation were duly made after said sale, whereby the title thereby transferred and the action in execution of such final judgments was established and confirmed.

IX.-And on information and belief this plaintiff further alleges that in the State of New Jersey the acts and proceedings aforesaid in that State were authorized and confirmed by an act approved by the Governor thereof on the 22d day of March, 1860; and that in the State of Pennsylvania the acts and doings aforesaid therein were authorized and confirmed by an act of the last named State, approved by the Governor thereof on the 22d day of March, 1860.

X.-That, as this plaintiff is informed and believes, said several judgments of foreclosure and confirmation, as will be shown by the production thereof, retained and recognized the continued validity and lien of said fifth and supplemental mortgages upon said property, rights and franchises, for the continued

security of the bonds thereby secured and which remained and still continued outstanding, and by a statute of the State of New York the said fifth mortgage is made a continued lien upon the personal property of the corporation defendant, without continued filing of the same as a chattel mortgage.

XI.—That after the organization of the said corporation defendant, the Erie Railway Company, and its entering into the possession of said property and the exercise of said franchises, said corporation continued to run and operate said several lines of road in said three States down to the time of the appointment of said Jewett as Receiver, and paid the interest as it matured upon said outstanding fifth mortgage bonds, until the first day of June instant, when default was made upon the payment of the interest which matured on that day, and though, as the plaintiff on information and belief alleges, demand was duly made for the payment of interest on said coupons, or a portion thereof, the same was not paid and interest still remains in default, by reason of the want of means on the part of the corporation defendant and of said Receiver to make such payment.

XII. That the property, right, and franchises which were ordered to be sold and which were sold under said judgments of foreclosure, was, as appears by the final judgment ordering the sale in the State of New York, so made on the 9th day of June, 1860, the following, viz.:

All and singular the railroad of the said New York and Erie Railroad Company, and now in the possession of the Receiver, from and including Piermont, on the Hudson River, to and including the final terminus of said railroad on Lake Erie, and that part of said road known as the Newburgh Branch, from Newburgh to the main line, together with the lands, tracks, lines, rails, bridges, ways, buildings, piers and wharves, erections, fences, walls, fixtures, privileges, franchises, rights, and all the real estate and leasehold property which were of the said company, of every kind, in the States of New York, Pennsylvania, and New Jersey, on the first day of June, A. D. 1858; and all the tolls, incomes, issues, and profits to be had from the same, and all rights to receive or recover the same, and all railway stations and depots, with the appurtenances necessary for the complete use of the road. Also all the locomotives, engines, tenders, cars, carriages, tools and machinery belonging or appertaining to said railroad. Also all the estate, right, and property, terms, and remainder of terms, franchises, and privileges, and rights of action of whatsoever name or nature, in law or in equity, conveyed or assigned unto the New York and Erie Railroad Company, by the Union Railroad Company, by an indenture bearing date September 10th, 1852, being the railroad of the Union Railroad Company, as it then existed, and all the land and real property forming or connected with, or appurtenant thereto, and all the rails, tracks, bridges, culverts, viaducts, turnouts, switches, fixtures and superstructures of every kind connected therewith; and all their buildings, erections, depots, stations, station-houses, offices, factory shops, and edifices on, or adjacent to, or connected with, or appurtenant to said road; and all the estate, right, title, interest, possession, and demand of the said Union Railroad Company, of and to the premises, and every part and parcel thereof, the rights, privileges, franchises, titles, power and properties of the said Union Railroad Company, with the right to transport persons, mails, and property over the said Union Railroad, and charge, demand, collect, and receive tolls for the transportation of persons, mails, and merchandise, and other estates and rights, all of which are fully described in said indenture. Also an indenture of lease, bearing date the ninth day of September, A. D. 1852, made by and between the President and Directors of the Paterson and Hudson River Railroad Company and the Union Railroad Company; and also an indenture of lease, bearing date the ninth day of September, A. D. 1852, made between the Paterson and Ramapo Railroad Company and the Union Railroad Company, together with all and singular the premises therein mentioned and described, and the buildings thereon, and the property, real and personal, with the appurtenances, in the said two indentures, and each of them, demised, conveyed and transferred for and during all the rest, residue and remainder then to come of and in the terms respectively mentioned in the said indenture of lease, subject to the conditions, rents, covenants, provisions and agreements in the said indentures respectively contained. Also all the estate,