When several plaintiffs claim under the same title, and the
determination of the cause necessarily involves the validity of
that title, and the whole amount involved exceeds $5,000, this
Court has jurisdiction as to all such plaintiffs, though the
individual claims of none of them exceed $5,000; but where the
matters in dispute are separate and distinct, and are joined in one
suit for convenience or economy, the rule is the reverse as to
claims not exceeding $5,000.
A mortgage by a railroad company of its railroad, rights of way,
roadbed, and all its real estate then owned or which might be
thereafter acquired appurtenant to or necessary for the operation
of the railroad, and all other property wherever situated in the
state then owned or which might thereafter be acquired by the
company and which should be appurtenant to or necessary or used for
the operation of its road, and also the tenements, hereditaments,
and appurtenances thereunto belonging, does not cover a grant of
lands within the state subsequently made by Congress to the company
in aid of the construction o� its road.
An appurtenance is that which belongs to or is connected with
something else to which it is subordinate or less worthy, and with
which it passes as an incident, and in strict legal sense, land can
never be appurtenant to land.
A grant to a railroad company of public lands within defined
limits not sold, reserved, or otherwise disposed of when the route
of the road becomes definitely fixed conveys no title to any
particular land until the location, and until the specific parcels
have been selected by the grantee and approved by the Secretary of
the Interior.
If a holder of one or more of a series of bonds issued by a
railroad company and secured by a mortgage in terms like this
mortgage has a right to institute proceedings for the foreclosure
of the mortgage -- about which no opinion is expressed -- he is
bound to act for all standing in a similar position, and not only
to permit other bondholders to intervene, but to see that their
rights are protected in the final decree.
The Court stated the case as follows:
This was a bill in equity to foreclose a mortgage, and a
cross-bill to have the mortgage decreed not to be a lien upon
Page 143 U. S. 43
the land grant involved in the controversy. The bill was
originally filed February 15, 1886, by the plaintiff Parker, "for
himself and for all parties holding bonds and coupons similar to
those herein set forth," against the New Orleans, Baton Rouge and
Vicksburg Railroad Company (hereinafter called the "Baton Rouge
Company"), the Union Trust Company of New York, the New Orleans
Pacific Railway Company, (hereinafter called the "Pacific
Company"), John F. Dillon and Henry M. Alexander, trustees in
certain land grant mortgages of the Pacific Company, and Samuel D.
McEnergy, then Governor of Louisiana, to foreclose a mortgage given
by the Baton Rouge Company, October 1, 1870, upon the property of
the company, and upon a land grant claimed to be covered by such
mortgage. Plaintiff Parker claimed only the amount of coupons
matured upon two bonds. Subsequently one Hamlin, another bondholder
under the same mortgage, intervened in the cause, which was tried
in the circuit court, and two distinct decrees rendered upon the
same day, one in favor of Parker, in the sum of $2,400, with
interest at five percent from October 1, 1885, and one in favor of
Hamlin, for $6,000, with like interest. 33 F. 693. The mortgage in
question, so far as it is material to be considered, purported to
cover the right of way;
"also all other property, real and personal, of every kind and
description whatsoever and wherever situated in the State of
Louisiana, which is now owned, or which shall hereafter be
acquired, by the said company, and which shall be appurtenant to or
necessary or used for the operation of said main line of railroad
or any of said branches,"
etc. The mortgage, which was made to the Union Trust Company of
New York, provided that the holders of bonds and coupons should
have the right to institute legal proceedings for its foreclosure.
The company put the bonds, secured by this mortgage, upon the
market and disposed of a number of them. This mortgage was by
public act, and was recorded in several of the parishes through
which the main line and the branches were to run.
By an Act of Congress approved March 3, 1871, 16 St. 573, c.
122, to incorporate the Texas Pacific Railroad Company, certain
lands in Louisiana were granted to the Baton Rouge
Page 143 U. S. 44
Company in aid of its construction of a railroad from New
Orleans to Baton Rouge; thence by way of Alexandria to the eastern
terminus of the Texas Pacific Railroad at Shreveport.
On November 11, 1871, the Baton Rouge Company filed in the
General Land Office a map designating the general route of its road
from Baton Rouge, by way of Alexandria, to Shreveport, and
thereupon the withdrawal of the public lands along this line was
ordered in accordance with the provisions of the above act of
Congress, secs. 12 and 22. In 1881, the Baton Rouge Company
transferred all its right, title, and interest in these lands to
the Pacific Company, and in March, 1885, patents were issued to
said company, as assignee of the Baton Rouge Company, for 679,287
acres of land lying in different parts of the state.
At the time this assignment was made, no work either upon the
main line or upon the branches had been done by the Baton Rouge
Company. December 28, 1870, the Baton Rouge Company executed a
second mortgage to the governor of the state, as trustee, to secure
the payment of certain bonds which were never issued. Such second
mortgage having been subsequently cancelled, on September 4, 1872,
one Allen assuming to act as president of the Baton Rouge Company,
also executed a mortgage to secure the payment of 12,000 bonds,
which, however, appear never to have been issued.
By acts of mortgage dated April 17, 1883, and January 5, 1884,
the Pacific Company executed to appellants Dillon and Alexander a
land grant and sinking fund mortgage upon the lands acquired from
the Baton Rouge Company, to secure the payment of certain bonds,
which the bill averred to be subsequent and subordinate to the
mortgage executed by the Baton Rouge Company to secure the payment
of the bonds in suit.
None of the defendants named in the bill appeared except the
Pacific Company and Dillon and Alexander, trustees of the land
grant mortgage of this company. These parties filed a general
demurrer which was argued and overruled, in September, 1886, and a
decree
pro confesso was entered against the other
defendants. Subsequently an answer was filed alleging in substance
that the charter of the Baton Rouge Company
Page 143 U. S. 45
did not authorize a mortgage on the land grant or on future
property; that the mortgage did not embrace the land grant; that
the Baton Rouge Company made no definite location of its road, nor
built any portion of the same; that the Pacific Company purchased
from the Baton Rouge Company, as alleged in the bill, and thereupon
constructed its road, and that the legal title to the land grant
remained in the United States until patents were issued to this
company. October 13, 1886, these defendants filed a cross-bill
setting forth that the cross-complainants were endeavoring to sell
the lands that had been patented to them, and were being
embarrassed and prevented by reason of the claim set up by Parker
in his bill; that as the mortgage sought to be foreclosed and the
outstanding bonds secured thereby did not mature for several years,
they would continue to be embarrassed for a long time; that Parker
had sued on behalf of himself and of other holders of bonds issued
under the mortgage of 1870, and, as complainants were advised and
believed, represented upwards of two hundred of said bonds, each
holder of which might bring suit and involve them in a multiplicity
of suits, and that only a court of equity could afford relief by
removing this mortgage as a cloud upon the title of the Pacific
Company to the lands, and prayed for a decree adjudging that the
mortgage did not embrace the land grant in question. Parker
subsequently filed a demurrer to this cross-bill. On December 24,
1886, Hamlin intervened by petition, and was admitted as a
co-plaintiff in the cause. Subsequently the case was heard, and
separate decrees rendered in favor of Parker and Hamlin for the
amounts of their several claims, adjudging the mortgage to be a
valid lien upon the lands, which were ordered to be sold, and
dismissing the cross-bill. Appellants took an appeal from these
decrees to this Court. Parker thereupon moved for a dismissal of
the appeal as to him upon the ground that less than $5,000 was
involved. The consideration of this motion was postponed to the
merits.
Page 143 U. S. 50
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
(1) The motion of the plaintiff Parker to dismiss the appeal as
to him, upon the ground that less than $5,000 is involved demands
our first consideration. His position is that the suit embraces two
separate and distinct controversies -- one between Parker and
appellants and one between Hamlin and appellants; that there were
separate decrees in these several causes; that these decrees cannot
be aggregated for the purpose of sustaining the jurisdiction of
this Court, nor can the appeal be sustained as to him by reason of
the fact that, as to Hamlin, more than the requisite jurisdictional
amount is at issue. It is true that the amount of Parker's decree
was but $2,400 and interest, but his bill was filed not only for
himself, but for all the other bondholders under the mortgage, and
the cross-bill avers that he actually represented upwards of two
hundred of the bonds issued under this mortgage (an averment
admitted by his demurrer), and prayed for a decree declaring the
invalidity of the entire mortgage as to these
Page 143 U. S. 51
lands. Had the bill been filed by the trustee under this
mortgage for the foreclosure of the whole amount of the debt, and a
similar cross-bill had been filed for its cancellation, there could
be no doubt of the appealable character of any decree rendered upon
these pleadings. This mortgage, however, contained a provision
permitting a foreclosure by any holder of an overdue bond or
coupon. Parker's bill was filed practically for the benefit of the
entire number of bondholders, and the cross-bill could not be
sustained except upon the theory that the entire mortgage was
invalid as a lien upon these lands. While a decree in favor of the
cross-plaintiff might not have been binding upon any defendant to
the cross-bill who did not appear, it certainly would have been
binding upon Hamlin as well as Parker, since Hamlin, on being made
a plaintiff, expressly stipulated that the cause should be
considered as if he had been one of the original plaintiffs; that
Parker's pleadings should be considered as his, and that the
pleadings of the defendants should apply equally to him. If
Parker's argument in this connection be sound, it would necessarily
follow that if every bondholder of this mortgage had intervened and
a cross-bill had been filed against them all praying a cancellation
of the entire mortgage, our jurisdiction to review a dismissal of
this bill could not be sustained as to any of such bondholders
whose decrees were not more than $5,000, notwithstanding it would
be sustained as to others whose decrees were larger. The result
would be that the land might be sold for the benefit of the larger
bondholders and freed from the lien of the smaller.
Where several plaintiffs claim under the same title, and the
determination of the cause necessarily involves the validity of
that title, this Court has jurisdiction as to all such plaintiffs,
though the individual claims of none of them exceed $5,000. Thus,
in
Shields v.
Thomas, 17 How. 3, where a bill was filed by
several distributees of an estate to compel the payment of money
alleged to be due them, and a decree was rendered in their favor,
it was held that this Court had jurisdiction over an appeal
although the amount payable to each individual was less than
$2,000. It was
Page 143 U. S. 52
held that the matter in controversy was the amount due the
representatives of the deceased collectively, and not the
particular sum to which each was entitled when the amount was
distributed among them. Said the Court:
"They all claimed under one and the same title. They had a
common and undivided interest in the claim, and it was perfectly
immaterial to the appellant how it was to be shared among
them."
The case of
Rodd v.
Heartt, 17 Wall. 354, is still more nearly
analogous. In this case, which was in admiralty, a fund exceeding
the jurisdictional amount paid into the registry of the court was
claimed on the one hand by several creditors secured by one
mortgage, and on the other by a number of mariners and materialmen.
A decree having been made adverse to the mortgagees, an appeal was
taken by them to this Court and it was held that although no one of
the claims under the mortgage equaled the jurisdictional amount,
yet as the claim of the appellants, which was disallowed, exceeded
that sum, an appeal would lie. In
The Connemara,
103 U. S. 754, it
was held that where salvors united in a claim for a single salvage
service jointly rendered by them, the owner of the property was
entitled to an appeal where the sum decreed exceeded $5,000, though
in the division among the several parties sharing in the recovery
several were awarded less than $5,000. In line with these cases are
those of
Davies v. Corbin, 112 U. S.
36, and
Handley v. Stutz, 137 U.
S. 366.
The true distinction is between cases in which there are several
plaintiffs interested collectively under a common title and those
wherein the matters in dispute are separate and distinct, and are
joined in one suit for convenience or economy. Of the latter class
are those relied upon by the plaintiff Parker in this case, and his
motion to dismiss must therefore be denied. Indeed, the cross-bill
to set aside the whole mortgage as to these lands is sufficient of
itself to remove all difficulty with regard to our
jurisdiction.
(2) The case upon the merits depends upon the question whether
the mortgage of 1870 should be construed to cover a land grant made
by Congress the following year to the Baton Rouge Company in aid of
the construction of its road. To
Page 143 U. S. 53
answer this question satisfactorily it is necessary to consider
the power of this company under its charter and the manner in which
it attempted to exercise this power.
The act of 1869 of the Legislature of Louisiana incorporating
the Baton Rouge Company authorized it (sec. 13) to obtain from any
parish or other municipality any rights, privileges, or franchises
that such municipality might choose to grant in reference to the
construction of the road, and by section 14 it was authorized to
borrow money or to purchase property for the purpose of
constructing the road, to issue its corporate bonds, and, to secure
the payment of such bonds, to mortgage its road, etc. By section
15, provision was made for a second mortgage, guaranteed by the
state, and for bonds to be issued and made payable to the state or
bearer. By section 16, the first mortgage that should be given was
declared to be a prior lien upon the railroad within the state,
including all the
"real and personal estate within the State of Louisiana
appurtenant to or necessary for the operation of said main line of
rail road, owned by the company at the date of said mortgage, or
which may be acquired by it thereafter, and upon the corporate
franchises and privileges of said company, granted by the State of
Louisiana, relative to the construction, operation, and use of said
main line of railroad within the State of Louisiana,"
etc. The mortgage did not differ materially from this act,
though its description of property covered by it is still more
explicit, and is as follows:
"About five hundred and one miles of railroad within the said
State of Louisiana, together with the right of way, roadbed, rails,
depots, stations, shops, buildings, machinery, tools, engines,
cars, tenders, and other rolling stock; also all the real and
personal estate within the State of Louisiana owned by the said
company at the date of this mortgage or which may be acquired by it
thereafter appurtenant to or necessary for the operation of said
main line of said railroad or any of said branches connected with
the said main line, or to be connected therewith; also all other
property, real and personal, of every kind and description
whatsoever and wherever situated in the State of Louisiana, which
is now owned or which shall hereafter be acquired by the said
company, and
Page 143 U. S. 54
which shall be appurtenant to or necessary or used for the
operation of said main line of railroad or of any of said branches;
also the tenements, hereditaments, and appurtenances thereunto
belonging, and all of the estate, right, title, and interest, legal
and equitable, of the said company and its successors and assigns
therein, together with the corporate franchises and privileges of
said company at any time granted or to be granted by the State of
Louisiana relative to the construction, operation, and use of said
railroad within said state."
The bonds issued under this mortgage contained a similar
description of the property, the latter clause of such description,
however, purporting to include "the corporate franchises and
privileges of said company granted by the State of Louisiana,
or by act of Congress, relative to the construction," etc.
How these words "or by act of Congress" came to be inserted in the
bonds does not appear. It may have been an oversight, or the
company may have supposed that the land grant would be acquired and
that the insertion of these words would impart additional currency
to the bonds. It is not material, however, to determine why or how
this was done, since neither the act of the legislature nor the
mortgage itself assumed in terms to cover anything granted by the
act of Congress.
The language of the act of the legislature and of the mortgage
itself restricts its lien to real and personal property situated in
the State of Louisiana, then owned, or which should thereafter be
acquired, and which should be appurtenant to or necessary or used
for the operation of the main line of said road or any of its
branches. The succeeding clause, which includes tenements,
hereditaments, and appurtenances thereunto belonging, etc., was
manifestly not intended as an expansion of the prior clause, and
for the purposes of this case may be treated as superfluous. No
argument is needed to show that a land grant is not necessary to
the operation of a railroad. It may be a necessary aid in the
construction of a road, but it is certainly not necessary in its
operation. Plaintiffs' contention, then, if supportable at all,
must be upon the theory that the land grant was appurtenant to the
road -- not
Page 143 U. S. 55
necessarily to its operation, but to the road itself. The word
"appurtenant," as ordinarily defined, is that which belongs to or
is connected with something else, to which it is subordinate or
less worthy, and with which it passes as an incident, such as an
easement or servitude to land; the tackle, apparel, rigging, and
furniture to a ship; a right of common to a pasture; or a barn,
garden, or orchard to a house or messuage. In a strict legal sense,
it is said that land can never be appurtenant to land,
Jackson
v. Hathaway, 15 Johns. 447, 454;
Leonard v. White, 7
Mass. 6;
Woodhull v. Rosenthal, 61 N.Y. 382, but it was
evidently contemplated by this mortgage that real as well as
personal property subsequently acquired, such as land for stations,
machine shops, or other purposes immediately connected with the
road should pass under the lien of the mortgage. Property, however,
not connected with what is ordinarily termed the "plant," or not
forming a part of the organic structure of the road is never
treated as appurtenant to it. Thus, in
Humphreys v.
McKissock, 140 U. S. 304,
decided at the last term of this Court, it was held that a railroad
company joining in the construction of an elevator upon land not
belonging to it, and situated at some distance from its road, did
not, by its ownership of stock in the elevator company, acquire
such an interest in it as would pass as an appurtenance under the
mortgage of the road as constructed or to be constructed, and the
"appurtenances thereunto belonging." The Court went further, and
held that the elevator itself, if owned by the company, would not
be appurtenant to its road. In line with this are the earlier cases
of
Harris v.
Elliott, 10 Pet. 25, holding that the soil and
freehold of a street did not pass as appurtenant to a lot of land
fronting upon such street. So in
Linthicum
v. Ray, 9 Wall. 241, it was said that the right to
use a wharf would not pass as appurtenant to a lot, as it was not
in any way connected with the enjoyment or use of the lot, and a
right not so connected could not be annexed as an incident to land
so as to become appurtenant to it. In
Smith v. McCullough,
104 U. S. 25, a
mortgage executed by a railroad company upon its then and
thereafter to be acquired property contained a specific description
of such property, and was
Page 143 U. S. 56
held not to cover municipal bonds issued to it in building the
road, which were not embraced in such description. And in
Bank
v. Tennessee, 104 U. S. 493,
where a bank was required by its charter to pay a certain tax in
lieu of all other taxes and was authorized to purchase and hold a
lot of ground for its use "as a place of business," and hold such
real property as might be conveyed to it to secure its debts, it
was held that the immunity from taxation extended only to so much
of the building as was required by the actual needs of the bank in
carrying on its business.
See also
Tucker v.
Ferguson, 22 Wall. 527.
Analogous cases in the state courts are numerous. Thus, in
Parish v. Wheeler, 22 N.Y. 494, it was held that canal
boats purchased with the funds of a railroad company and used and
run by it in connection with its railroad, but beyond its terminus,
were not covered by a mortgage of its engines, cars, etc., "and all
other personal property in any way belonging or appertaining to the
railroad of said company." So in
Boston & New York Air Line
Railroad v. Coffin, 50 Conn. 150, the property mortgaged by
the railroad company was described very nearly in the terms
employed in the mortgage under consideration, and it was held that
lands purchased by the company outside of the layout of the road,
and not needed for its use or construction, were not covered by the
mortgage. It was said in the opinion that
"lands purchased and sold at a profit, although the profit might
be expended in the construction of the road, were never intended to
be embraced by the phrase, 'acquired by the company for the
purposes of the railroad.'"
In
Mississippi Valley Co. v. Chicago, St. Louis & New
Orleans Railroad, 58 Miss. 846, a railroad mortgage covering
property thereafter to be acquired was confined to such as was
appurtenant to or necessary for building or operating the road, and
carrying out the purposes for which it was created, and was held
not to include an hotel and brick storehouse, some vacant town
lots, and a farm of three hundred acres, the hotel being used as a
railroad eating house and the other property being rented out for
the several purposes for which it was adapted. In
Meyer
Page 143 U. S. 57
v. Johnston, 53 Ala. 237, a mortgage of a railroad and
"all other property now owned and which may be hereafter owned by
the railroad company" was held not to cover a land grant of the
United States, made by an act of Congress subsequently passed.
Other cases to the same purport are
Shamokin Valley Railroad
Co. v. Livermore, 47 Penn.St. 465;
Dinsmore v. Racine
&c. Railroad Company, 12 Wis. 649;
Farmers' Loan
&c. Company v. Commercial Bank, 11 Wis. 207, 15 Wis. 424;
Morgan v. Donovan, 58 Ala. 241;
Walsh v. Barton,
24 Ohio St. 28;
Calhoun v. Memphis & Paducah Railroad,
2 Flippin 442;
Seymour v. Niagara Falls Railroad, 25 Barb.
284.
A consideration of the circumstances attending and following the
execution of this mortgage strengthens the inference that we have
drawn from it that the land grant was not intended to be included.
There is no allegation in the bill that the parties to this
mortgage expected or had any reason to expect that the land grant
would be made, and had it been intended to include so important an
item, it is scarcely possible that the mortgagor would have left
such intention to be inferred from the indefinite and ambiguous
language of this instrument. Nor is there any evidence that after
the act of Congress was passed, the line of the road was ever
definitely fixed, as contemplated by section 9 of the Act of March
3, 1871, 16 Stat. 573, 576, c. 122, although it had filed a map
designating the general route of the road pursuant to sections 12
and 22, and obtained an order from the Secretary of the Interior
withdrawing from entry and sale the odd-numbered sections of land
within the grant and indemnity limits. As the grant was, by section
9, of lands not sold, reserved, or otherwise disposed of at the
time the route of the road was definitely fixed, it is settled in
this Court that the title to any particular lands would not pass
until the line was so located, because until that time it could not
be definitely ascertained what lands had been otherwise disposed
of.
Van Wyck v. Knevals, 106 U. S. 360;
Kansas Pacific Railway v. Dunmeyer, 113 U.
S. 629;
Sioux City Land Co. v. Griffey, ante,
143 U. S. 32. As to
lands
Page 143 U. S. 58
within the indemnity limits, it has always been held that no
title is acquired until the specific parcels have been selected by
the grantee and approved by the Secretary of the Interior.
Grinnell v. Railroad Company, 103 U.
S. 739;
Kansas Pacific Railroad v. Atchison, Topeka
&c. Railroad, 112 U. S. 414,
112 U. S. 421;
St. Paul &c. Railroad v. Winona & St. Peter
Railroad, 112 U. S. 720;
Barney v. Winona & St. Peter Railroad, 117 U.
S. 228;
United States v. Missouri &c.
Railway, 141 U. S. 358,
141 U. S. 375;
St. Paul &c. Railroad v. Northern Pacific,
139 U. S. 1. A
definite location of this line was subsequently made by the Pacific
Company, but there is no evidence that such location coincided with
the general route designated by the Baton Rouge Company, and, as no
patents were ever issued for the lands earned by the construction
of the road until March, 1885, when they were issued to the Pacific
Company as assignee of the Baton Rouge Company, it is difficult to
see what lands were ever "acquired" by the latter company to which
this mortgage would attach.
Not only this, but there is no allegation or evidence that the
Baton Rouge Company paid the cost of surveying, selecting, and
conveying these lands as required by the Act of July 31, 1876, 19
St. 102, 121, c. 246, as a preliminary to their conveyance.
New
Orleans Pacific Railway v. United States, 124 U.
S. 124;
Deseret Salt Co. v. Tarpey,
142 U. S. 241. Nor
is there any evidence to show that the Baton Rouge Company ever
built any of its line of road or did anything to earn or acquire
the title to any part of its land grant.
The decrees in this case were also fatally defective in ordering
all the lands assumed to be covered by this mortgage to be sold,
free from all liens, mortgages, and encumbrances, to satisfy a
claim of $2,400 in one case and $6,000 in another, without making
provision for other bondholders, subsequent mortgagees, or other
creditors of the road. Assuming for the purposes of this case that,
under the peculiar terms of this mortgage, these bondholders had
the right to file this bill without calling upon the trustee to
act, a point upon which we express no opinion, they had no right to
a decree for their exclusive benefit. It a single bondholder has
any right
Page 143 U. S. 59
at all to institute proceedings, he is bound to act for all
standing in a similar position, and not only to permit other
bondholders to intervene, but to see that their rights are
protected in the final decree. Upon this principle it was held by
this Court, in
Pennock v.
Coe, 23 How. 117, that a bondholder cannot, by
getting a judgment at law, be permitted to sell a portion of the
property devoted to the common security, as this would disturb the
pro rata distribution among the bondholders, to which they
are equitably entitled. "These bondholders," said Mr. Justice
Nelson,
"have a common interest in this security, and are all equally
entitled to the benefit of it, and in case of a deficiency of the
fund to satisfy the whole of the debt, in equity a distribution is
made among the holders
pro rata. . . . To permit,
therefore, one of the bondholders under the second mortgage to
proceed at law in the collection of his debt upon execution would
not only disturb the
pro rata distribution in case of a
deficiency and give him an inequitable preference over his
associates, but also have the effect to prejudice the superior
equity of the bondholders under the first mortgage, which possesses
the prior lien."
Jones on Railroad Securities, sections 392, 393, 434;
Fish
v. N.Y. Water-Proof Paper Co., 29 N.J.Eq. 16;
Martin v.
Mobile & Ohio R. Co., 7 Bush 116.
In
Railroad Company v.
Orr, 18 Wall. 471,
85 U. S. 475, a
bill was filed by a bondholder on behalf of himself and all others
against a county and a railroad company for the foreclosure of a
mortgage given by the railroad company to secure the redemption of
certain bonds issued by the county, and for a sale of the mortgaged
property. The railroad company demurred for want of proper parties.
It was held that the other bondholders should be parties to the
suit, and, in delivering the opinion of the Court, Mr. Justice Hunt
observed:
"It is the interest of every bondholder to diminish the debt of
every other bondholder. Insofar as he succeeds in doing that, he
adds to his own security. Each holder therefore should be present,
both that he may defend his own claims and that he may attack the
other claims should there be just occasion for it. If, upon a fair
adjustment of the amount of the debts, there
Page 143 U. S. 60
should be a deficiency in the security, real or apprehended,
everyone interested should have notice in advance of the time,
place, and mode of sale, that he may make timely arrangements to
secure a sale of the property at its full value."
In the view we have taken of the case, it is unnecessary to
consider the other points made by the defense. We are satisfied,
both from the words of the mortgage itself and from the
circumstances attending its execution, that it should not be
construed to include the land grant subsequently made to this
company.
The decrees of the court below must be
Reversed, and the case remanded, with instructions to
dismiss the bills of Parker and Hamlin, and for further proceedings
in conformity with this opinion.
