Newport & Cincinnati Bridge Co. v. Douglass, trustee, &c.

Second. The commonwealth has a vendor's lien for the payment of $74,519.50 on the bond executed to the state by the Louisville & Frankfort Railroad Company under section 52 of the act of March 1, 1847. (Fish v. Howland, 1 Paige, 24-30; 1 Hilliard on R. P., p. 492, sec. 9 et seq.; Kleiser v. Scott, 6 Dana, 137; Burk v. Chrisman, 3 B. Mon. 50; Honore v. Bakewell, 6 B. Mon. 67, 74; Woodward v. Woodward, 7 B. Mon. 116; Harrison, &c. v. Lex. & Ohio R. R. Co., 9 B. Mon. 472; Lou. & Frankfort R. R. Co. v. Brown, 17 B. Mon. 772; Sinking Fund Commissioners v. Northern Bank of Ky., 1 Met. 183; 1 Leading Ca. Eq., pp. 148-281; Cox v. Fenwick, 3 Bibb, 183; Thornton v. Knox's ex'rs, 6 B. Mon. 74; Stewart v. Hutton, 3 J. J. Mar. 178; Ligon v. Alexander, 7 J. J. Mar. 288; Galloway v. Hamilton, 1 Dana, 576.)

As to the history of the bond to the state, etc. (Acts 1832–3, p. 263; Acts 1837-8, p. 237; Acts 1839-40, p. 208; Acts 1840-41, p. 74; Act 1843, p. 50; Charter of Louisville & Frankfort R. R. Co., Act of March 1, 1847; Charter of Lex. & Frankfort R. R. Co., Act of Feb'y 28, 1848.)

Third. The state is not included in acts of the general assembly unless it is so stated in the act or unless it is plainly inferable that such was the intention of the legislature. (Commonwealth v. Cook, &c., 8 Bush, 220; Divine v. Harvie, 7 T. B. Mon. 443.)

BARNETT & SPEED FOR APPELLANT THE LOUISVILLE, CINCINNATI & LEXINGTON RAILROAD COMPANY.

First. There are no words of survivorship in the mortgages as among the trustees. The heirs of deceased trustees hold the legal title and are not before the court; they are necessary parties.

A chancellor will not sell a mere equitable title and compel the purchaser to take it. (Debell v. Foxworthy, 9 B. Mon. 231; Thornton v. Knox, 6 B. Mon. 74; Roney v. Bell, 9 Dana, 5.)

Second. One half of the legal title, under the mortgage to Hawkins & Harrison, was in the heirs of Hawkins. Harrison, holding no bonds, had no legal capacity to sue. (B. & L. R. R. Co. v. Metcalfe, 4 Met. 199.) Third. The compensation provided for to the trustee in the mortgage to Douglass goes to the receiver or trustee, not both.

There is no authority to sell the company's property under this mortgage, if the past due interest is paid before the day of sale. No such right is reserved in the decree.

Fourth. The Masonic Savings Bank and the Western Bank each held the bonds of the railroad company as collaterals, sold them under decree, and bought them at a nominal price, and thereby increased their debts threefold. These banks should not have been allowed to credit their judgments by the price paid for the bonds, nor allowed the costs incurred in the sale of them.

Newport & Cincinnati Bridge Co. v. Douglass, trustee, &c.

Fifth. As to the attaching creditors generally and state and city taxes— The rights of the company are intangible, and therefore not liable to levy, and are not taxed. Only the property is taxed.

The company's franchises are-1. The right of succession; 2. The right to use the writ of ad quod damnum; and 3. The exclusiveness of its right to build and operate a railway between named points. These franchises can not be taken under execution or attachment. Rights and franchises may be alienated in the mode pointed out in the charter, but not otherwise.

Sixth. The returns on the orders of attachment are not sufficient to create liens on any thing, except possibly the fund in court.

Seventh. The earnings in the hands of the receiver since his appointment, and those earned but not collected before that date, were appropriated by the Lees mortgage before any of the attaching creditors had a debt. All earnings are by contract, and to meet the requirements of the public, to be appropriated in operating and repairs of the railway. No one can take any of the earnings while needed for these purposes. (2 Redfield on Railways, 537; G. & C. W. Railway v. Menzies, 26 Ill. 121.) Eighth. Attaching creditors have no right to a decree of sale. At best they can only claim a receiver and net earnings. (Winchester & Lex. Turnpike Road Co. v. Vimont, 5 B. Mon. 1; 2 Redfield on Railways, 552, 546, note 23; Ib. 553, sec. 235 a.)

Ninth. The sale sought in the decree is not the sale provided for in any of the mortgages, but these are suits for foreclosures and sales depending upon general chancery jurisdiction. This is certainly true as to all the mortgages preceding that to Green, and apparently true as to that and the succeeding ones. Such being the case, there can be no foreclosure or sale. (Bardstown R. R. Co. v. Metcalfe, 4 Met. 199; 2 Redfield, 507.)

Tenth. There is no sufficient description of the property in the pleadings or decree upon which to have a fair sale for value or a valid sale. 1. No intimation is given as to the width of the right of way or the length or number of tracks. 2. There is no attempt at defining the extent or boundary of any tract of land owned, except a few acres at each end, while it is shown that the company does own other lands, such as depot grounds, station-houses, grounds, etc. 3. There is nothing to show where the company has a mere easement and where it owns the fee, either of which may be acquired under its charter. No advertisement can cure these defects, for the decree gives the basis for the advertisement.

Eleventh. Counsel fees are denounced as penalties. (Garr, &c. v. Louisville Banking Co., 11 Bush, 180; Rilling, &c. v. Thompson, 12 Bush, 310.) Twelfth. The chancellor has no jurisdiction to decree a sale on longer credits than allowed by law, and both sale and bonds taken would be

Newport & Cincinnati Bridge Co. v. Douglass, trustee, &c.

void. No purchaser could hold his purchase at such a sale, if excepted to (Dunn, &c. v. Salter, &c. 1 Duvall, 347), and such a sale ought not to be allowed to take place, for the exception would certainly come.

JOHN ROBERTS FOR APPELLEE GEORGE L. DOUGLASS, TRUSTEE, AND BARR, GOODLOE & HUMPHREY for appellee NORVIN GREEN, TRUSTEE.

First. The fund in the hands of the receiver is not the subject of an attachment. (High on Receivers, sec. 151; Drake on Attachments, secs. 509 a, 458; Field v. Jones, &c., 11 Ga. 413; Taylor v. Gillean, 23 Texas, 514; Glenn v. Gill, 2 Md. 1; Nelson v. Conner, 6 Robinson (La.), 339; Taylor v. Carryl, 20 How. 584; Bishop of Winchester v. Payne, 11 Vesey, 195; Scott v. McMillen, 1 Littell, 302; Scott v. Coleman, 5 Mon. 73; Thoms v. Southard, 2 Dana, 475; Wickliffe's ex'rs v. Breckinridge's heirs, 1 Bush, 443; Edgell v. Haywood, 3 Atkyns, 357; Bullett v. Stewart, 3 B. Mon. 115; Parsons v. Meyburg, 1 Duvall, 206; Winchester & Lex. Turnpike Co. v. Vimont, 5 B. Mon. 1; Covington Draw-bridge Co. v. Shepherd, &c., 21 Howard. 112; White Water Valley Canal Co. v. Vallette, 21 Howard, 414; Civil Code, secs. 328, 329.)

Second. The appellees, the mortgagees, are entitled to the fund in the hands of the receiver, by virtue of their claim to the property from which the earnings were derived, the earnings being preserved for them by the action of the chancellor in appointing the receiver. (Keech v. Hall, 1 Smith's L. Ca. 654; Kerr on Receivers, 40, 48, 50, 159, 161, 163; High on Receivers, p. 688; Tanfield v. Irvine, 2 Russell, 150; Cortleyeu v. Hathaway, 3 Stockton, 40; Warner v. Gouverneur's ex'rs, 1 Barb. S. C. R. 38; Bank of Ogdensburg v. Arnold, 5 Paige, 39; Shotwell v. Smith, 3 Edw. Ch. Rep. 588; Sea Ins. Co. v. Stebbins, 8 Paige, 566; Wiswall v. Sampson, 14 Howard, 64; Chase's Case, 1 Bland Ch. 213; Post v. Dorr, 4 Edw. Ch. 414; Howell v. Ripley, 10 Paige, 44; Beverly v. Brooke, 4 Grattan, 208; White v. Bishop of Peterborough, 3 Swanston, 109; Davis v. Duke of Marlborough, 2 Swanston, 137; Langton v. Langton, 31 Eng. Law & Eq. 422; Parker v. Calcraft, 6 Maddox Ch. 15; Henshaw v. Wells, 9 Humph. (Tenn.) 568; Lofsky v. Mauger, 3 Sandf. Ch. 69; Brown v. N. Y. & Erie R. R., 19 How. Pr. 85; Denniston v. Chicago, Alton & St. Louis R. R. Co., 4 Bissel, 414; Walker v. Bell, 2 Maddox Ch. 352; Ellis v. Boston, Hartford & Erie R. R. Co., 107 Mass. 1.)

Third. The attachments were unauthorized by law, the property and funds attached being in the hands of the court.

Even if the attachments are valid, being sued out lis pendens, they must await the termination of the principal case, and can only affect such property or funds or such interest therein as the court would otherwise turn over to the railroad company.

Newport & Cincinnati Bridge Co. v. Douglass, trustee, &c.

Fourth. Irrespective of the preceding propositions, as the appellees have mortgages upon the property which produced the earnings distributed by the judgment, and as the receiver was appointed upon their application and in a suit to which all the lien claimants were parties, both under the rule laid down in New York and that in Virginia and England, and according to the necessary signification of our Civil Code, these earnings must go to those holding claims upon such property, in the order of their priority.

Green, Douglass, and Lees all have a special contract pledge of the earnings.

Fifth. As to the appeals of the Newport & Cincinnati Bridge Co. and the Pittsburgh, Cincinnati & St Louis Railroad Co.

The mortgages or deeds of trust to Green and Douglass embraced all future-to-be-acquired property of the mortgagor.

A railroad company executing a deed of trust or mortgage, under legislative sanction, may include future-to-be-acquired property. (Phillips v. Winslow, 18 B. Mon. 431; Pennock v. Coe, 23 Howard, 127; Dunham v. Railway Co., 1 Wallace, 265; Coe v. Columbus Railway Co., 10 Ohio St. 373.)

The one thousand bonds issued under the Douglass mortgage were authorized by law; five hundred by act of Feb. 8, 1870, and five hundred by act of March 21, 1870.

The act authorizing the company to issue bonds "bearing a rate of interest not exceeding eight per cent per annum, and having not more than thirty years to run," did not mean that the interest should be made payable at the maturity of the bonds. (Maddox, &c. v. Graham & Knox, 2 Met. 80; Coe v. Columbus, Piqua & Indiana Railroad Co., 10 Ohio St. 396.)

A provision for the precipitation of a debt bearing interest from the date of the obligation, and not having any future interest added to its face, is not a penalty, is enforceable, and equity does not relieve against it. (Valentine v. Van Wagner, 37 Barb. 60; Rubens v. Prindle, 44 Barb. 337; Ottawa New Plank Road Co. v. Murray, 15 Ill. 337; Robinson v. Loomis, 51 Pa. 78.)

The contract between the railroad company and the bridge company does not attempt to create a lien on the property of the railroad company to secure the fulfillment of any of its obligations. That contract is not binding on the mortgagees, and the purchaser of the road should not be required to assume its obligations. (Dunham v. Isett, 15 Iowa, 291; Haven, &c. v. Adams, &c., 4 Allen, Mass. 80; Ellis v. Boston & Hartford R. Co., 107 Mass. 1-4.)

Sixth. As to the appellant the Louisville Bridge and Iron Co., its claim for building an iron bridge for the railroad company is not entitled to any preference on the theory of "conservation." (Galveston R. R. Co. v.

Newport & Cincinnati Bridge Co. v. Douglass, trustee, &c.

Cowdrey, 11 Wallace, 459; Dunham v. Railway Co., 1 Wallace, 254; Denniston v. Chicago, Alton & St. Louis R. R., 4 Bissel, 414; Brown v. Erie R. R. Co., 19 Howard, 85.)

Seventh. As to the appellant the Western Bank.-The lien the bank acquired by its attachment was subsequent and inferior to that of the mortgages, because all the mortgages were in existence long before the bank sued.

When a mortgagee gives a tenant of the mortgagor notice that he has determined his will as to the collection of the rents by the mortgagor, the tenant must pay over to the mortgagee all rent that has not been paid to the mortgagor, even if it be past due, or to fall due in future for a period of occupancy, part of which has transpired. (Moss v. Gallimore, 1 Douglass, 278; 1 Smith's L. Ca. 843, and notes; Clark v. Abbott, 1 Md. Ch. 474; L., C. & L. R. R. Co. v. Commonwealth, MS. Opinion, Oct. 12, 1875.)

Eighth. The bond for $76,420.25, executed by the Louisville & Frankfort Railroad Co. to the commonwealth, under the act of March 1, 1847 (Acts 1847, p. 41), for the interest of the state in the road, binding said railroad company "before each and every payment of dividends to the stockholders of said company shall be declared and made, to pay into the treasury" interest at the rate of six per centum per annum on said amount, was in effect simply a certificate of preferred stock in the railroad company. This bond is not secured by any express lien, nor by a lien raised by implication. If the money was the consideration, then a vendor's lien existed. If the covenant was the consideration, then the execution of the covenant was considered as payment, and there was no lien for its performance. (1 Smith's L. C. in Eq., 235, Mackreth v. Symmons; Buckland v. Pocknell, 36 Eng. Ch. Rep. 406; Dixon v. Gayfere, 21 Beaven, 625; Earl of Jersey v. Britton Ferry Floating Dock Co., L. R. Eq. 409; McCandlish v. Keen, 13 Grattan, 615; Parrott v. Sweetland, 3 Mylne & Keene, 655; 10 Eng. Ch. R. 348; in re Albert Life Assurance L. R., 11 Eq. 178.

Ninth. As to the appeal of the Louisville, Cincinnati & Lexington Railroad Company. The company being hopelessly insolvent, the sole question to be considered is, can the purchaser obtain a good title under the sale ordered by the judgment.

The trustees can represent every interest, and are appointed for that purpose. (Civil Code, secs. 37, 577; General Statutes, p. 586, secs. 13, 14; Cahill v. Bigger, 8 B. Mon. 214; Galveston R. R. Co. v. Cowdrey, 11 Wall, 460; Griffith v. Burton, 5 Bush, 360.)

As to the objection to the various attorneys' fees allowed. This is certainly not a case coming within the principles of Thomasson v. Townsend, 10 Bush, 114.

In a railroad trust-deed or mortgage there are three parties-the rail