Source: https://openjurist.org/15/f1d/6
Timestamp: 2019-04-20 14:41:35+00:00

Document:
stricted to non-residents. If, however, the question is to be determined by the citizenship of the parties to the record a.t the time the administrator became a. party to the record, which position is sustained by our view of the ruling in Relfe v. Rundle, supra, and also by tile ease of Burdick v. Peterson, McCrary, 135, [$. C. 6 FED. REP. 480,] the same result follows, as the administrator was then a citizen of Iowa, and hence could not remove the cause under the act ')f 1867. Under either view, Grayson did not possess the right of removal under the act of 1867 at any time, and hence the cause could not be removed to this court under that act. The motion to remand must therefore be sustained.
1. STATE LoAN-IN AID OF RAILliQAD.
The act of the legislature of Arkansas, providing for a loan of the bonds of the state to railroad companies, construed, and held (1) to create a statutory Tnortgage on the roads, and their income and revenues, to secure the payment of the state bonds by the companies accepting the loan; (2) that such lien took effect from the date of the award of the loan, by the board of railroad commissioners, to the company applying for the same; (3) that the duty of the governor to issue the bonds, after the award of the loan, was ministerial; (4) that all persons were bound to take notice of the lien reserved by the act, and when it accrued; (5) that the lien reserved to secure the payment of the bonds is primarily a security for tho;e h.olding the bonds; (6) that as between the state and the company receiving the bonds, the company was the principal debtor and bound to pay the bonds, or furnish the state means for that purpose; and if the bonds are void as obligations against the state, the company which received and negotiated them as genuine is bound to pay them to bonafide holders, and the latter may enforce the lien reserved by the act to secure thIs result.
i. DEBTOR AND ("'REDITOR-LIEN BY CONTRACT-ENFORCEMENT.
Where a creditor acquires the right by contract to seize and sell the property of his debtor, or sequester its income and revenues to pay tho latter's debt, such contract necessarily imports and creates a lien on the property. which may be enforced by any lawful holder of the debt.
·, Income and revenues" of a railroad company are all the income and enues of the company, and necessarily embrace the" earnings" of its road.
... MORTGA.GES FOR FUTURE ADVANCES.
It is a well-settled rule that where the mortgagee has the option to make the advances or not, each advance is as upon a new mortgage; but where the mortlI;agee is bound to make the advances, the lien relates back to the date of the b ... Ctgage, and is superior to any subsequent lien or conveyance. "
TOMPKINS V. LITTLE ROCK &; FT. S. BY.
The payee of negOtiable paper who transfers idor value thereby: t"llltrllnttes the genuineness of the paper, and thl: truth of on ita facti" Wlitl:flal to its validity .and value.
seize and take possession of the income and reyenues of said company until the amount of said defaults shall be fully paid up and satisfied, with of sequestration, after which said treasurer shall release the further revenues of said company to its proper officers." "Sec. 12. At the next general election to be holden under the provisions of section 3 of article 15 of the constitution of this state, the proper omcers haYing charge of such election shall upon·a poll, as in other cases, take and receive the ballots of the electors qualified to vote for officers at such election for and against this act, in compiiance with section 6 of article 10 of the constittltion,such ballot to contain the words, 'For Hailroads,' or 'Against. Railroads;' and if it appear that a majority so voting have voted' For Railroads,' this act shall immediately become operative and have full force, and all laws heretofore passed for loaning the credit of this state in aid of railroads shall cease and be void; but if a majority shall be found to haVe voted 'Against Railroads,' this act shall be void and of no effect."
TOMPKINS 11. LITTLE BOCK & FT. S. BY.
(1) That the act of 186l:S was not in force when the election was held under it, and that the consent of the people to the loan not having beert given at all election held in pursuance of law, the act of 1868 and the bonds'issued there- ' under are unconstitutional and void. (2) 'rhat no lien in favor of the state, or of any holder of the is (;lreated or reserved by the act in questio,n. (3) That the lien created by the mortgage deed under which. the defendant, the railway company, claims title, is superior and prior to the lien, if any, reserved and created in favor of the state or the holders of the state bonds under the act of 1868.
John McOlure and John R. D08 Pa8sos, for plaintiff. G. W. Huntington, for defendant, Little Rock & Ft.
and ora contract. Brifthe contract is SimBEl The the loan was tendcompany was not bound to borrow' the state ered on certain terms and conditions, and when it applied for and accepted the bonds, it voluntarily assented to be bound by the provisions of the ads, which at once constituted a contract between the company and the state. By the terms of this contract, if the company did not pay the interest on the state bonds as stipnlated, it authorized the treasurer of state, "by writ of sequestration, to seize and take possession of the income and revenues of said company until: 'the amount of said default be fully _paid up and satisfied, with costs of sequestration, after which said treasurer shall return the furtherrevenues of said company to its officers." . Such seizure and sequestration might be repeated from time to time as often as the company made default. The "claims and liens on the part of the state" were not to be discharged until "the bonds issued to such company, and the interest thereon," had been fully paid. Section 7. There is nothing mysterious or doubtful in the meaning of "sequestration" and "writ of sequestration," as used "in the acts. The word is here used in its usual sense, and Dieans "to seize or take possession of the property belonging to another, and hold it till the profits have paid the demand for which it Wag taken." WorcesL This is preeisely what the company agreed'the state might do with its property if it failed at any time to furnish the state with the funds to pay the interest and principal of the state bonds according to the terms of its contract. Where a creditor acquires the right by conttiwt to seize and sell'the property of his 'debtor, or sequester the incomes and revenues of the same, to paY,the latter's debt, such right, in equity, necessarily imports arid cieatesa lien. .Jones, Mortg. § 162. A creditor at large pORsess6s no such right" and cannot seize and sell the property of his debtor or sequester its income. The terms "tax" and "taxation" are not/used in the actin the sense of a tax that is to be ltssessedand levied for the support of the state or any of its subdivisions; A tax, in the legal signification of the term, has to be levied on all property "by a uniform rule, " not only as to the ratle. but in the mode of its,'ass6ssment.. Article 10; § 2, Const.; FletcMr v. Oliver, 25 Ark. 295. Clearly. this word as used in th'e act has no reference to a tax ,in its strict legal signification. The. sense in which a word is used in any given case is to be determined by theeontext.
'v. LITTLE BOOK &' FT. S. BY.
.. The taxation in this section provided to continue until the amount of bonds issued to such company, with the interest thereon, shall have been paid by said company'as herein specified, in which ca,se the said road shall be entitled to a discharge from all claims or liens on the part of the state."
TOMPKINS ,".!LITTLE BOOK & FT. S. BY.
TOMPKINS V. LITTLE BOCK & FT. S. BY.
TOMPKINS V. LITTLE nOOK· & FT. S. BY.
.. This bond is one of a series, issued in aid of the Jacksonville, Pensacola & Mobile Railroad Company,to the ext.ent of $16,000 per mile upon completed road; the state of Florida holding the first-mortgage bonds of. said railroad . company for a like amount, as further security to the holder hereof."
.. Issued in pursuance of an act of the general assembly of the state of Arkansa!<, approved JUly 21, 1868, entitled' An act to aid in the construction of railroads,' the said act having been submitted to and duly ratified by the people of the state at the general election held November 3, 1868."
TOMPKINS U. LI'J:Tllllh:BOOK&.fT. S. BY.
"The broad doctrine lleen that regard security, given, by a principal debtor to his surety, though merely for the surety's indemnity, as a trust created for the payment of the debt, and will see that it is applied for that purpqse, by substitnting, if necessary, the creditor' to its benefit." Section 163. "The security for the debt, in whosesoever hands it may be, is treated as a fund held' in trust for the paYment of the debt; if it is in the hands of the creditor, surety, upon paying the deot, will Oil sUOrogated to it for indemnity; if· it is in the hands of. a surety, the creditor may resort to it to secure the payment of his demand," Section 155·.
"The principle is well settled that where a surety; or a persoustanding in the position of a surety, for the paymElnt of a·debt. receives security for his indemnity, and to discharge such ihdebtedness, the principal creditor is. in' equity entitled to the of' that security, and it makes no difference that the plincipal creditor did not know of at the time, or give, cr64it on the faith of i t . " ,.
pany is void also, and must fall. We do not so understand the law. Undoubtedly a constitutional part of a statute may be so connected is unconstitutio.lal as to make it impossible, if the with that unconstitutional part is stricken out, to give effect to what, taking the whole together, appears to have .been .the legislative will. In such a case the whole statuto is void; but in this, as in every other statutory construction, all depends upon the intention of the legislature, as shown by the general scope of the law. To our minds it is clear, in the present case, that the object of the legislature was not to create a debt which the state was expected to pay, but. to aid the company in borrowing money .upon the credit of the state. As between the for the money borrowed was to be the state and the company the debt of the company. If the state paid its bonds from its own funds, the mortgage could be enforced'to compel the company to make the state good' for all such payments. If the state did not pay, then the creditors had their own recourse upon the mortgage. The state credit,strfar as the state and the 'oompany were concerned, was only to aid' the company in borrowing money on its own bonds. In any event, the company was to be bound for the payment of the entire debt-'whenit matured, and its 'property was to be given as security. Under these circumstances, it seems to us that the unconstitutional part of the statute may be stricken out, and the obligation of the compltny, including its statutory mortgage in favor of state bond. holders, left in full force. The striking out is not necessarily by erasing words, but it may be by disregarding the unconstitutional provision, ana reading the statute as if that provision was not there. These bonds, as state obligations, were void, but as against the com· pany, which had actually put them out, they were good." This judg. mentof the supreme court, in a case on all fours with the case at bar, concludes the question. And see Johnson v. Griswold, 2 Mo. Ct. App.150. A single question remains. The act of 1869 was repealed oy the act of May 29, 1874. This repeal does not affect the rights of the parties to this suit. All contracts made under the act, or of which it constituted a part, and the rights acquired by such contracts, are unaffected by the repeal. The obligations of the railroad company to the holders of the state bonds, and the rights acquired by the latter, whatever they may have been, under and by virtue of that a.ct, remain to be enforced the same as if no repeal had taken place. If this were otherwise, the act of 1888 would still remain, which con· tains all the essential provisions embraced in the act of 1869.
It is believed the conclusion reached is in accordance with wellsettled principles of law, and the authority of adjudged cases binding on this court; and it unquestionably is in harmony with the plainest principles of justice. The company borrowed these bonds and put them in circulation upon a distinct engagement that it would provide the funds to pay them, and it gave its assent to the statutory lien on its road to secure this result. It sold them to innocent parti<ls for money to build its road. It has received all the benefits that were expected to accrue to it under the contract, and the road and its earnings remain bound for the performance of the contra.ct by the company. There is no principle upon which this obligation can be avoided, either by the company or subsequent purchasers with notIce of the equities of the state bondholders. It WQuid be proach to the law if there wits. The demurrer to the bill is overralod.
The division of a donation to a married man, under section 4 of the !!onatton a.ct of September 27, 1850, (9 I;t. 497,) between the settler and his wife, is comto the discretion of the surveyor general, and in contemplamitted by the tion of law is made when the. settler proves to the satisfaction of said officer that lie has complied with the provisions of the act, and the latter issues the certificate containing the facts constituting such compliance, and specifying the portion of the donation set apart to the husband and that to the wife, as provided in section 7 of said act j and no valid objection thereto Is found by the commissioner of the general land-office, which is shown by the subsequent issue of a patent thereon.
BUIT FOR PARTITION-8TATUTE OF LIMITATIONS.
The wife of a married settler, under section 4 of the donation act, died after · final proof by the settler of compliance with the act, and before the iS$ue of the patent. Held, (1) that the half of the donation to which she was or would have been entitled, was thereupon granted, by the act, to her surviving husba.nd and children in equal parts as the direct donees of the United States; and (2) the statute of limitations did not commence to run against the right of the heirs of Did husband to maintain a suit against his vendees of certain distinct portions thereof, for a partition of their interests in said half of said donation, until t1Ie aame was formally and finally divided by the surveyor general as aforesaid.

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