State of Alabama v. Montague

• Decision Date: 12 April 1886
• Citation: 6 S.Ct. 911,117 U.S. 602,29 L.Ed. 1000
• Parties: STATE OF ALABAMA and others, Trustees, etc., v. MONTAGUE and others. Filed
• Court: U.S. Supreme Court

6 S.Ct. 911

117 U.S. 602

29 L.Ed. 1000

STATE OF ALABAMA and others, Trustees, etc., v. MONTAGUE and others.

Filed April 12, 1886.

[Statement of Case from pages 603-604 intentionally omitted] Saml. F. Rice, for appellants.

Xenophon Wheeler, for appellees.

MILLER, J.

This is an appeal from the circuit court of the United States for the Eastern district of Tennessee. The suit was originally brought in the chancery court of Hamilton county, from which it was removed into the court first mentioned. It was a bill to foreclose a mortgage on 22 acres of land in that county, which is described with particularity by metes and bounds in the bill, and is there alleged to have been purchased of J. P. McMillin by the Alabama & Chattanooga Railroad Company, the mortgagor, on the twenty-fifth day of March, 1869. No such description of the land is found in the mort- gage which is the foundation of this suit, and if it is covered by that mortgage, it is by a phrase which, it must be supposed, was intended to cover it by a general reference to all other property of the mortgagor in the state of Tennessee, rather than by any specification of this property. The defendants deny that, by any fair or just construction of the mortgage, it can be held to include the 22 acres in question.

There are other grounds of defense set up, on one of which the decree against plaintiffs was rendered, namely, that the suit was barred by the statute of limitations. But if the defendants are right in the assertion that the land was not conveyed by the mortgage deed, all other questions are immaterial.

It appears that the legislature of the state of Alabama authorized the governor of the state to issue to the Alabama & Chattanooga Railroad Company its bonds to the amount of two millions of dollars. The statute, however, required the governor, before he delivered these bonds, to demand of the company its own bonds of an equal amount, secured by a mortgage on certain property mentioned in the statute. The mortgage was made and the bonds issued to the state in exchange for bonds of the state delivered to the company. As the language descriptive of the property to be mortgaged, as found in the statute, is found identically in the reciting part of the mortgage and in its granting clause, and as this question is to be decided by a construction of that language, it will be given here verbatim from the mortgage deed, (Exhibit C to original bill:)

'This instrument of mortgage, made this second day of March, in the year eighteen hundred and seventy, by and between the Alabama & Chattanooga Railroad Company, a corporation of the states of Alabama, Georgia, Mississippi, and Tennessee, the party of the first part, and the state of Alabama, the party of the second part, witnesseth that whereas, said state of Alabama, by an act entitled 'An act to loan the credit of the state of Alabama to the Alabama & Chattanooga Railroad Company, for the purpose of expediting the construction of the railroad of said company within the state of Alabama,' and approved February 11, 1870, has granted certain aid to said corporation, and has in and by said act required the governor of said state to issue bonds of said state to an amount not exceeding two millions of dollars in favor of said company, bearing interest at a rate not ___ eight per cent. per annum, which said interest shall be payable semi-annually in currency or coin, and the bonds shall be payable at the expiration of not less than fifteen nor more than thirty years, upon the terms and conditions in said act set forth; and whereas, said act further provides that the governor of the state shall only issue said bonds upon receiving in exchange therefor an equal amount of first mortgage bonds of said railroad company, bearing the same rate of interest as the above-mentioned state bonds, and secured by a first mortgage upon the lands granted by the United States to said railroad company, and upon any interest which said company now has or may hereafter lawfully acquire in or to said lands, with this reservation: That the said Alabama & Chattanooga Railroad Company shall have the privilege and right of selling said lands, or any part thereof, in accordance with the act of congress granting the same: provided, however, that the proceeds of said sale shall be appropriated to the payment of the aforesaid first mortgage bonds of the said railroad company issued to the state: provided, further, that the governor shall require said railroad company, before issuing to said company said bonds, to give the state of Alabama a first mortgage on the telegraph line and telegraph offices along the line of said road belonging to said company; also on the machine-shops and other property in the state, and in Georgia, Tennessee, and Mississippi, belonging to said company; also on all coal mines now open or hereafter to be opened and worked belonging to said company; also...