The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1858-04-10
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Mo9lu hod the last named bond as of higher lien
% hu preference over the income bonds and to their
usEdr"Ge ement them how forcibly would the doctrine
| "PPy, that they were suppressinp a most vital and
important fact, which it was their dntv to con,mni
cate, ana from the conceament of which the com
pailiits are now entitled to relief for the injury
baIo ocesohed; that the Messrs. Garrett must
nave known the purposes and policy of their ,,r;oc
| pas the Road) cannot be doubted and tbay tno,y
better than any one else at the time what securities
Would De given to It's creditors if anv were to bn
sued being themselves, as their answer shows lsr
ly Interested creditors to the amount of S3 m
! UOO, and holding as they now do the Sd MORTGAGE
Donds TO large amount, as security to themselves
over ana above the income bonds also held by them
and which they doubtless have subordinated in ropl
to the Sd mortgage bonds, having a much LARGER
amount OF the Sd mortgage bonds to secure their
Wnole debt without in any event being compelled to
iaLi PACK on the income bonds, which they regard as
INFERIOR IN priority to the Sd mortgage bonds which
they now hold
On the whole therefore | am of opinion that the
c0mplalnants are entitled to such relief as Court of
chancery IN such case give. But before indicat
ing the nature of that relief and the form of the de-
the bar.
In the case of Myatt rs. W. Helens Rail
road Company, ~ f. c. Law Reports n T15
the Company by act of parliament was authorized to
oorroW money on mortgage Of the rates and
tolls Of their road, and it was held that the
mortgagee could not take the land in that
case and Lord Denman saws in his opinion that be
sees no reason to suppose that the Legislature IN
fehdcd so lnconvenient a thing as to compel the
company to part with that property by which the
Undertaking was to be carried on.
The case, IL Simon's reports, Perkins rs Debt
ford Pier Company, 2Sl, much relied on was ON q
similar special act, which authorized the borrow
ing OF money the tolls and rates alone bv special
mortgage and not referring to the land, &c; but
IN the Maryland reported cases: see Terrence
u.s. Torrence, COakley and wife u.s. Mver, the
true rule is laid down when a devise of the rents
conveys the land also it decided in the case of
Hudson rs. Walker and Vance, Harris and Gill,
4l5-that the grantee of second mortgage re-
corded 1ih notice of prior nloytgaqe ,chic6 9os mt
d"g recorded, is bound by the equitable rights of the
rst mortgagee unless upon inquiry, he is led to be-
heye that the incumbrance was removed, '.that was
as personal property, but the principle should ap-
ply as fully in equity to real estate. See page BAL
opinion of the Court also, Gill page 3l5, as
to notice. And Judge Story in his work on equity,
trine: at is general principle in equity that as
against the party himself or any claiming under
HIM, voluntarily or with notice. such as an agent
that Is under an agreement or contracts creating
lien on real estate personal property it raises a
trust Without, therefore. longer pausing to ex-
anime all the authorities, English and American,
cited and to be found in the books am clear in
regarding this case as one on the evidence coming
within the operation of that rule of Equity which
makes an agreement or contract creating a lien.
binding on the parties OF party, who, with knorIedqe
and notice of such agreement or contract afterwards
by subsequent agreement or contract by speciality
VI erWlse atteihPts 10 supersede the hrst CON
tract or impair the liens arising under it; and
Court of Equity should give relief in such a
case shall decree, therefore, IN conformity
to this opinion, and upon the fullest authorities
as understand them, that the defendants,
especially the Messrs. Garrett d Sons, who are
within the direct jurisdiction of a Maryland Court
of Chanccry, shall hold the Sd mortgage bonds now
in their hands, in trust for the benefit of the
eomplainants in this case, whose prior equita-
bic lien under the income bonds, | regard as
paramount, and to be preferred over the Sd
mortgage bonds, so held by the defendants
Intoxicated to them or as apenfs of their ca