Dodgeville chronicle. [volume] (Dodgeville, Wis.) 1862-current, 1868-09-11

nrofess on its face to be executed in the
exercise of the power granted 10y that act,
but it is given to secure the payment. OF |
bonds to the amount Of $500, GOO. Ihis
is the maximum authorized by the act 10 |
be secured by the first mortgage, and the
defendant contends it furnishes strong
presumption that the Conan u Martin
mortgage, like Jacob, though younger born,
inherited the birth-right. All bondholderss /
were compelled not only to notice the spe-
cial act, but also the record OF the Jams
sen mortgage, that with a John the Bap
list humility, proclaimed in its own text
that there is Zone coming after me that is
mightier than /, and that shall be prefer
red before" The defendants claim that
this prophecy is exactly accomplished IN
the Conan G. Martin mortgage, and the
prerogatives and superiority guarantee1 TO
it by the terms of the Jansen instrument
cannot now be defeated by the bondhold-
ers claiming under the latter mortgage.
Even. say the defendants, if the Schuyler
mortgage could be regarded as 1.-THE lrst
mortgage" spoken of in the act of March
| 23d, 1858, yet it has been paid off or at
least it's bonds have been taken up by the
company, and the Conan & Martin mort
gage substituted for it, and the latter
| thereby becomes ''the first mortgage" and
entitled to the priority guaranteed by the
special act. ad - .a
The plaintiff counsel insists on anoth-
err theory He produces contract be-
tween the company and Robert and Geo.
! L. Schuyler, dated December 10th, 1858,
| according to which the company, in con-
sideration of the Schuylers coyenanting to
build and equip the road, agreed to issue
| to the Schuylers bonds. of the company to
| the amount of 100000, to be secured by
{" the first mortgage on the entire road.
AS question of factit admits of no doubt,
and | have so found, that the company
and Schuyler, at the time of the delivery
| Of the mortgage and bonds to him, intend.
| ed it should be the first mortgage
| But do not think that bona tide holders
| of the bonds under the Conan & Martin
mortgage could at all be affected by any
private intention or agreement, on the part
of the company or others, of which they
had no notice, nor could they be compelled
| to notice such documents. The contracts
and resolutions Of the company were a
sealed book to all bondholders, and to re-
quire them to knoao, and yet deprive them
of the means of knowledge, would be an
edict as despotic as the Roman sovereign,
who punished his subjects for disobeying
laws which per- industria he placed beyond
their sight. The question how far the
bona fde holders of municipal bonds
should examine the public records of the
corporation to see whether the supervisors
of the town had complied with the requi-
sites of the law authorizing the issue of
! its bonds, when the bonds were actually
issued by the supervisors, and recited on
their face a full compliance with the law,
is discussed at length in the case of Weed
err against The town of Lima 10 Wis.
Rep. D. $50. Whatever may be said of
municipal corporations whose records are
open to public inspection, there is no DIFF
ference of opinion with respect to semi
| public corporations, such as a railroad
company, whose records are not Of pub
| lie nature. fla railroad corporation has
authority, under its charter, to issue bonds
and execute mortgages to secure them,
such bonds are valid in the hands of bona
tide holders, if they have been issued by
the proper officers Of the company, in the
manner required by the charter, though
there may be no resolution of the company
authorizing their issue. t~.fs.ffsT. ,tn
And when the question of priority arises
between bondholders under different mort
cages, | think it cannot be determined by
| a reference to the written contracts of the
company or its recorded resolutions, which
no bondholder can be supposed to know,
/ or have the means of Knowing If there
was no law or public record postponing
| first mortgage of railroad toa second,
| surely the first mortgagee could not be de-
privcd Of his preference by private ar.
arrangement between the company and the
second mortgage, to which the first mort
gage was not privy. tgf 9nmle ..r7 81
| - But the plaintiff insists that aside from
every circumstance dc hors, or outside Of
the Schuyler mortgage, it appears on its
! face to be the mortgage to which prefer
encc is given by force Of the special act so
often alluded to. If I differ with the
plaintiffs counsel on this point, it is not
because the Schuyler mortgage is given
for. the sum of 100000, and when the: ac-
| tual length of the railroad is taken into, the
account, that it is found to be but 80 miles,
and the law only authorizes a paramount
lien to the extent Of $4,000 per mile, ]
think the Schuyler mortgage might be
valid as the preferred instrument, though
its dimensions exceed that of the power.
1t might be valid for, $500, 90O-that is, a
preferred mortgage to that, extent and
would have. no preference over other NOR
tgages, so far as the4excess was concerned
If the railroad on sale under the mortgage,
brought but $500, 000,. the Schuyler bond
holders would divide pro, rata,T-and this
is the amount they would divide among
themselves fsthe sale brought more. than
that sum, and the excess would be dispose
ed Of according to the priority of liens
If the, Schuyler mortgage showed on its
face, that it was eXecutedin pursuance Of
the special law, / think it's bondholders
would have the preference to the amount
of $4,000. Judge Redfield in his argu-
ment filed in this case, shows very couclu-
sively that a distinguishable and severable
excess does not invalidate the execution oil
a power. In interpreting powers derived
from legislative act, the same rules are
to be observed as though the power origi-
mated in the agreement of1the parties. FL
the railroad company had executed mort
gage to Jansen under its general power
to execute such instruments, ana had re-
served in that mortgage the power to make
subsequent mortgage which should have
preference over the Jansen mortgage
such preferred mortgage to be given for
sum not to exceed $4,000 per mile on the