Case Name: THE CANAL COMPANY'S CASE
Court: Court of Appeals of Maryland
Jurisdiction: Maryland
Decision Date: 1896-06-17
Citations: 83 Md. 549
Docket Number: 
Parties: THE CANAL COMPANY’S CASE.
Judges: 
Reporter: Maryland Reports
Volume: 83
Pages: 549–646

Head Matter:
THE CANAL COMPANY’S CASE.
Extension of Time During which Trustees Under a Mortgage were authorized to Operate the Chesapeake and Ohio Canal—Priorities Between a Mortgage to the State Upon the Properiy of the Canal and a Mortgage to Individuals Upon the Revenues and Tolls— When a Sale of the Canal May be Decreed— Waiver of State’s Priority—Rights of Mortgagee in Possession as to Mode of Operation.
-The State of Maryland was the holder of mortgage liens upon the property, tolls and revenues of the Chesapeake and Ohio Canal, when, by the Act of 1844, chap. 281, it authorized the issue by the company of bonds secured by mortgage, to be preferred liens upon the revenues and tolls of the company, and the lien of the State was waived so as to make such bonds preferred liens on said revenues. A mortgage to secure such bonds was accordingly executed in 1848, by which the revenues and tolls of the company were conveyed to-trustees by way of mortgage, who were authorized to collect the same in case of default. Under the Act of 1878, chap. 58, other bonds were issued which were conceded to be the first lien on the property and revenues of the canal as against the State and the bondholders under the Act of 1844. In 1890, the trustees for those bondholders filed a bill setting forth the broken and wrecked condition of the canal itself and the insolvency of the company. Upon this bill a decree was made, authorizing the trustees for the bondholders of 1844 to take possession of the canal, and repair and operate the same for four years ; and it was provided that if, at the end of that time, the revenues should not be sufficient to pay for restoring the canal and the operating expenses, such failure in the tolls should be regarded as conclusive evidence (unless the time be extended by the Court) that the canal could not be operated so as to produce revenue with .which to pay the bonded indebtedness, and the right was then reserved to the Court to decree a sale of the canal. The trustees took possession, expending a large sum of money in restoring the canal, and prior to the expiration of the four years mentioned in the decree applied for an extension of the time during which they might retain control, alleging that the canal would be able to pay something out of the revenues on account of the bonded indebtedness. It was objected by the State that the application for an extension of time was premature, also that the trustees were not entitled to the further aid of equity, and that the State had a right under its first mortgage of the corpus of the canal to demand a sale of the same free from the claims of the bondholders, the contention of the State being that its lien on the whole canal was by the Act of 1844 waived only so far as to give to the bondholders under that Act a lien upon the revenues and tolls. Held,
1st. That the trustees for the bondholders of 1844, who had taken possession of the canal when in a ruined condition and expended nearly |5oo,ooó' in putting it in good condition, were entitled to an extension pf time in which to operate tire canal, the business of the same having been largely increased under their management, and the order of the lower Court granting such extension for six.years is affirmed.
2nd. That assuming that the-parties representing the bonds of 1844 have a lien only on the net revenue and tolls and have no lien on • the proceeds of the sale of the corpus of the canal, then a sale of the same under the mortgages to the State would absolutely destroy their lien on the tolls, and such sale will not be decreed until it appears that the canal cannot be operated so as to produce reve-' nue applicable to the payment of the bonds.
3rd. That until it appears that the lien of the trustees on the net revenues is worthless, the same cannot be impaired' by the State, which had waived its lien in favor of the bondholders represented by the trustees.
4th. The the lien of the bondholders under the Act of 1844 is limited to the net revenues and tolls of the canal.
5th. That the amount expended by the trustees in restoring the canal should be paid,, with interest, from the tolls and revenue.
The trustees in possession were properly authorized by the lower Court to make a contract with a transportation company for the use of the canal for a fixed sum, subject to the control of the Court, such contract enabling the trustees to operate the canal advantageously.
The State, by the Act of 1896, waived its lien on the canal in favor of certain labor claims. Held, that since their priority was not passed upon by the order appealed from, they could not be disposed of by this Court.
Appeal from an order of the Circuit Court for Washington County. A former appeal involving some of the questions arising on this appeal is reported in State v. Brown, 73 Md. 484. The decretal order entered on October 2, 1890, and affirmed in that case, by which trustees representing certain bondholders were authorized to take possession of the Chesapeake and Ohio Canal, and to repair and operate it as a waterway, provided as follows :
“ Sixth. That if, at the end of four years from the first day of May next, there shall not have been tolls and revenues derived from the said canal, and -the property and rights appurtenant thereto (over and above the amount necessary to pay current operative expenses, and to keep the canal in repair), to liquidate and discharge the amount of the cost of repairing and restoring the canal to a working condition from its present broken condition, and the amount of money required to pay expenses and compensation to the receivers, and to pay any amount that may be determined to be a preferred lien on such tolls and revenues for labor and supplies furnished to the canal company, such failure in tolls and revenues shall be regarded as evidence conclusive (unless the time be extended by the Court for good and sufficient cause shown), that the said canal cannot be operated so as to produce revenue, with which to pay the bonded indebtedness of said company, the right and power is hereby reserved to this Court to order and direct the execution of the foregoing decree of sale.”
On January 30, 1894, the surviving trustees filed a report and petition in the lower Court in which they set forth :
“I. That in accordance with the decrees and orders of this Court in these consolidated causes and the decree and’order of the Supreme Court of the District of Columbia-,, dated November ist, 1890, and entered in the like causes'therein pending, under which decrees and orders these trus*tees were put in possession of the Chesapeake and Ohio Canal, they proceeded with all possible speed to repair the canal and put the same in good condition as a waterway. As the work of repairs progressed it was found that the' eighteen months during which the canal was practically abandoned and dried out had added much to the damage caused by the flood of 1889, and had also weakened the canal at points untouched by the flood. It was also found that the walls of many of the locks and the gates in almost all the locks required renewal. - These trustees have, nevertheless, ■ carried out the work of repair and renewal, although at a cost far exceeding what they had anticipated.
“ Owing to the extent of the repairs required and to the' unfavorable weather encountered, the water was not -turned' into the canal throughout its length until the month of August, 1891. Traffic did not fairly begin to move until Sqfrtember ist, 1891. From the latter date till the close '©f navigation in that year the canal remained open for the passage of boats, with some short interruptions ; but the amount of traffic transported was small, owing to the scarcity of boats. New of the boats used on the canal before the flood-of June, 1889, were even capable of repair in 1891. The work of repair by these trustees did not cease with the opening of the canal for the passage of boats. Throughout the year 1891, and indeed during the year 1892 and the winter of 1892—3, the repair of the canal and its works was continued, as the work could be done more economically.
“ The canal is now in better condition as a waterway than ever before in its history. It has a depth of six feet throughout its length for loaded boats, and as a consequence the average loading of the boats was heavier during the last boating season than ever before, despite the extremely low water in the Potomac River.
“ 2. These trustees have borrowed for the purpose of making said repairs $435,163.34. Their receipts from net tolls, rents and other sources to December 1st, 1893, have been $270,970.73. Their expenditures have been for the repair of the canal and its works, under the orders of the Courts, $430,764.43; for other accounts, $250,327.17, This statement does not include $15,000 borrowed and paid as the compensation of the receivers of this Court and the Supreme Court of the District of Columbia.
“ 3. When these trustees received possession of the canal, not only was the canal itself damaged by flood and doubly damaged by the delay in repairing it, but the canal as a business enterprise and a means of transportation was discredited. Its traffic had sought other routes and other methods of transportation. The port of Georgetown had lost its standing as a coal shipping port and vessels no longer sought it for cargoes of coal. Shippers of coal did not believe that the business of the canal could be revived, and coal shipped coastwise from Georgetown. The boats on the canal during 1891 numbered only ninety. Even after the restoration of the canal as a waterway became an accomplished fact, those who would have otherwise been willing to renew their investments of former years in canal boats and equipment, were deterred by the provisions of sub-section 6 of section 5 of the decree of this Court, entered herein October 2, 1890. Those provisions were regarded as limiting the possession of these trustees to four years, and the uncertainty as to the maintenance of the canal as a waterway after the expiration of four years prevented such investments by all except those sufficiently interested otherwise in the success of these trustees to take the risk. During the season of 1892 the number of boats on the canal increased to one hundred and eighty-two, representing with their equipment an additional investment of about $150,000. During 1893 the number has not materially increased, although some new boats have taken the places of old ones.
“ 4.. The provisions of sub-section 6 of section 5 of the decree entered in this cause October 2, 1890, have operated also to hamper greatly these trustees in the collection of the rents and revenues otherwise collectable for the occupation of the lands of the canal company and the use of water from the canal as a motive power. The apparent limitation of the possession of the trustees to four years has induced many holders of long term leases from the canal company (many of which reserve a merely nominal rent) to dispute the rights of these trustees under the mortgages of 1848 and 1878. The hope of these lessees is that these trustees will be unable to dispossess them by legal process within the four years. * * * *
“5. The provisions of said sub-section 6 have operated to prevent the recovery of much of the traffic which had been diverted from the canal, as already stated, but which would have returned to it had it not been for those provisions. Shippers of coal have been and are unwilling to break up their arrangements with the railroad carriers and ship again by. canal, because the order of Court, under which the trustees held possession, seems to treat their operation of the canal as an experiment limited to four years duration. (
" Nevertheless, the business of the. canal has grown in the face of the extraordinary obstacles above mentioned. In 1891 the number of tons of coal carried on the canal was 50,533.14, of which none were shipped coastwise from Georgetown. In 1892 the tons carried were 265,799.08, of which 92,369 tons went coastwise ; and in 1893 the tons carried rose to 336,295.11, and the tons coastwise to 146,997.14, an increase over the previous year in tons carried of 70,496.03. A reference to the reports of the Chesa.peake and Ohio Canal Company filed in this cause will show that not since 1885 has the number of tons of coal carried equalled the number carried in 1893. The expense of maintaining and operating the canal does not increase with the increase of tonnage and traffic. For the year 1893 the canal has been more than self-sustaining from traffic alone. The revenue that will be derived from the further increase of the traffic will be net revenue, as will be also the revenue from increased rents. For the further growth of the traffic of the canal additional boats and equipment must be put in service thereon. No one will make the investment of money necessary to put such additional boats on the canal, unless the uncertainty be removed as to the right of these trustees to continue the maintenance and operation of the canal after the expiration of the four years mentioned in the said decree of October 2, 1890.
“ 7. These trustees further report and show to the Court that they have negotiated a contract with the Chesapeake and Ohio Transportation Company of Washington County, a body corporate of the State of Maryland, recently organized for the purpose among others of conducting a forwarding or transportation business on the Chesapeake and Ohio Canal. By the terms of said contract the said transportation company agrees to furnish all the boats needed to transport traffic offering for transportation on the canal, and further agrees to guarantee to these trustees a fixed net revenue from their trust estate; all of which will more fully appear by reference to a copy of said contract with these trustees, filed herewith, marked “ Trustees’ Exhibit A,” and pray may be taken and read as part thereof. The said contract has been executed by the said transportation company and by these trustees upon the express condition that the same shall not be finally delivered or become effective, unless or until this Court shall by some proper order approve the execution of the same by these trustees, and also extend the period of four years from the first day of May, 1891, mentioned in sub-division 6 of section 5 of the said order or decree entered herein on the second day of October, 1890, so as to enable these trustees to cany out their agreement in said contract contained, to maintain and operate the said canal during the term of the contract.
“ These trustees further state to the Court that the said contract will greatly benefit the trust estate im their charge.
“ Wherefore these trustees and petitioners pray : I. That an order may be entered herein ratifying and approving the execution by these trustees of the said agreement with the Chesapeake and Ohio Transportation Company of Washington County, and authorizing these trustees to deliver the same. 2. That such order provide further that the period of four years from the first day of May, 1891, mentioned in sub-section 6 of section 5 of the decree entered herein on the second day of October, 1890, be for good and sufficient cause shown extended till the end of ten years from the date of the entry of said order.”
The Court .below (Stake, J.) passed an order by which it was adjudged “ that the said trustees’ petitioners have shown and do show good and sufficient cause for the extension by this Court, as prayed in said petition, of the period of four years mentioned in sub-section 6 of section 5 of the order and decree entered in these consolidated causes, on the second day of October, 1890; and doth further find and adjudge that the contract between said trustees and the said Chesapeake and Ohio Transportation Company of Washington County, mentioned in said petition, is one advantageous to the trust estate and proper to be executed by said trustees. And the Court doth thereupon order, adjudge and decree, that the said trustees be and they are hereby authorized to execute and deliver said contract; and doth further order, adjudge and decree, that the period of four years from the first day of May, 1891, mentioned in sub-section 6 of section 5 of the decree entered in these consolidated causes, on the second day of October, 1890, be and the same is hereby, for good and sufficient cause shown, extended to the end of six years from the first day of May, eighteen hundred and ninety-five.”
The cause was argued at the October term, 1895, and a reargument was ordered as to the priority of liens at this term.
The cause was reargued before McSherry, C. J., Bryan,, Fowler, Briscoe, Page, Roberts and Russum, JJ.
Harry M. Clabaugh, Attorney-General, and John Prentiss Poe, for the appellant.
For the State it will be argued : i. That the cost of the repairs put upon the canal by the trustees of the bonds of 1844 under the privilege granted to them in the affirmed decree of October 2, 1890, upon their application to be placed in possession, is not a lien upon the canal, and accordingly that the trustees are not entitled to be reimbursed such cost out of the proceeds of sale. 2. That the repair bonds of 1878, issued under the Act of 1878, chapter 58, together with the unpaid interest thereon constitute the first lien and must first be paid in full. These bonds are secured by a first mortgage upon the corpus of the canal, and also upon its revenues. 3. That the mortgages held by the State are next in the order of priority, and are entitled to take precedence over the bonds of 1844.
The decree of 1890 ordered the sale of the canal, but suspended the execution of the decree, and postponed the sale for five years, with the right, upon good cause shown, to suspend the sale for a further period. It thus distinctly denied and rejected the claim of the trustees to complete possession of the canal, with the right to operate it indefinitely until the principal and interest of their bonds should be fully paid, and it also distinctly denied and rejected the prayer of the trustees that the sale should be made subject to their right, notwithstanding the sale, to still hold, repair and operate the canal, and take and apply the tolls and revenues to their use until their bonds should be fully paid.
By the decree the trustees were allowed the right to redeem the repair bonds of 1878, and to be subrogated to all their rights, and were declared to be entitled to possession of the canal upon such redemption; but this possession was not to be permanent in recognition of any contractual right on their part to enter into possession by reason of the default of the canal company to pay their bonds, and to retain such possession until, under their management, their bonds should be paid, but was allowed to them for a limited period in order that, at their own cost and expense, without lien on the corpus of the canal at all, and without lien on its revenues, except during the period of their possession for the purpose of reimbursement to them of such cost, they might,Jf they saw fit to do so, repair and restore the canal, and operate it by way of experiment, to see whether they could make it pay. If the experiment should prove to be a failure, the Court reserved the right and power to order the decree for sale to be executed. The trustees accepted this decree as a judicial determination of their rights. They did not appeal from it, but, on the contrary, insisted before this Court upon the appeal of the State that the decree was right and should be affirmed, and it was affirmed. It is now, therefore, the irreversible law of the case, binding upon all the parties to the suit, and especially binding upon the trustees of the bonds of 1844, who urged its affirmance here. The bondholders of 1844 are not now in a position to contend that the interpretation put by the Court below, and by this Court, upon the mortgage of 1848, executed for the purpose of giving “the fullest effect” to the Act of 1844, is erroneous, and that notwithstanding such interpretation embodied in the decree of the Court below, and affirmed at their instance, the contract between them, the canal company and the State, entitles them to retain possession of the canal and operate it until its revenues, under their management, shall be sufficient to extinguish their entire bonded debt.
The bondholders of 1844 have no lien on the corpus of the canal. By the clear terms of the Act of 1844, chapter 281, authorizing the issue of theses bonds, the pledge by which they were to be secured was a pledge of the net tolls and revenues only of the canal company, and the State’s waiver went no further than, but was merely coextensive with, this pledge. Hence, in the distribution of the proceeds of sale these bonds are not entitled to participate until after the State’s mortgage claims are fully paid. The claim of these bondholders is that notwithstanding the State (which prior to the Act of 1844 had a first and paramount lien, covering by clear, distinct and definite terms the entire canal and its works, and also its tolls and revenues) waived and postponed its lien in their favor upon the net tolls and revenues only, and after making this waiver required a new' mortgage to be made to it, covering also in express terms the canal, its works and also its revenues ; and notwithstanding these bondholders took their mortgage only upon the net tolls and revenues, yet now, when the security which they took has proved insufficient, a new and different and better security must be held to have been given them—that the waiver of the State is to be extended by implication beyond its terms and is to be made to be a waiver of its prior lien on the corpus of the canal as well as on its net tolls and revenues, and the lien upon the net tolls and revenues offered to and accepted by these bondholders is to be enlarged by construction and made equivalent to a lien upon the corpus as well as upon the net revenues.
The limited security which was tendered and upon which the bonds were negotiated is now claimed to be an unlimited security, not only upon the net tolls, but upon the corpus, which was in the most careful and express terms reserved from the pledge ; and simply to save these bondholders from a loss resulting from the unfortunate and greatly-to-be-regretted failure of the security, which, when it was accepted, was believed to be ample, the Court is called on to give them the benefit of a security which was never tendered to them, never asked for by them, never, until the imminence of loss made such a pretension necessary, supposed to have been given to or received by them, but which, with industrious precision, was most carefully withheld and excluded from the public statutory grant of the security offered to them when they were invited to take the bonds and upon which they relied when they made their investment. Chiek Judge Alvey, as has already been stated, after a careful examination of the -whole sub ject and in an opinion that leaves nothing new to be said, held that this claim was without foundation, and that upon the unfortunate failure of the security which they accepted they are only entitled to occupy the position of ordinary non-lien creditors of the company. Brown v. Ches. and Ohio Canal Co., 73 Md. 590-600. This is the proposition which the State now maintains, and this is the adjudication of her rights in her favor, upon which she now respectfully insists.
Here, too, there is a preliminary question to be considered. Are these bondholders, upon the case made by this record in a situation to dispute this contention of the State ? In view of the averments made by them in their pleadings— in view of their last petition to the Court and the action which at their instance the Court took for their benefit, are they at liberty to claim that they have a lien upon the corpus of the canal and are entitled to have their bonds paid out of the net' proceeds of sale ? After demanding and being allowed the benefit of the right of redemption of the repair bonds of 1878, which were, by force of the State’s waiver, made a first lien upon both corpus and revenues of the canal company; and after claiming and being allowed the right to be subrogated to all the rights and remedies held by these repair bonds (including the right to the absolutely first lien on the corpus of the canal) can these bondholders of 1844 deny the priority of the State’s lien upon the corpus of the canal and upon the net proceeds of its sale, after the lien of these repair bonds upon such corpus shall have been extinguished by their payment to them as purchasers, and fairly claim even a priority over the State’s mortgages ? Are they not, in short, estopped by the record here, from setting up their presént pretension ? In their original bill, as already shown, they ask for a receiver upon the distinct and express ground that their lien extended only to the net tolls and revenues, and that they “ have no security for their debt other than the tolls and revenues of the canal." Can they “ blow both hot and cold?” Edes v. Garey, 46 Md. 41. Can they disaffirm at one stage of the case what they affirmed at another stage of the same case ? Hall v. McCann, 51 Md. 351 ; Boyce v. Fisher, 81 Md. 52. Can they both “ approbate and reprobate ? ” Can they ask the Court to give them a specific relief upon the plaintive and piteous averment that they have no lien upon the canal— no right to a foreclosure—no standing in Court to demand a share of the proceeds of sale if a sale be ordered upon the prayer of the State, which has a lien upon the corpus, and may, therefore, rightfully demand a sale, and then, when a sale is ordered, nimbly shift their position, repudiate their original attitude and claim to be entitled to the first paid out of the proceeds of sale, because they have a first lien upon the corpus, and possess, therefore, a legal right to a sale of the mortgaged property and all the fruits which such a right carries with it ?
But apart from these objections, the claim of these bondholders of 1844 to the priority which they assert, even if they were in a situation to urge it, cannot be maintained. To sustain it Your Honors must put upon the Act of 1844, and upon the mortgage of 1848 given to the original trustees of these bondholders, an interpretation of which, until very recently, they were never supposed to be susceptible. You must ignore and disregard the palpable distinction clearly, deliberately and purposely drawn in the Act of 1844 between a mortgage on the canal, and all its property and works of every description, and a mortgage upon its net tolls and revenues only. You must attribute to the State an intent to waive and postpone in favor of these bonds her first lien upon the corpus of the canal, when the act authorizing the bonds, after most plainly and carefully referring to her prior mortgage on both corpus and revenue, waived only her mortgage upon net revenues. You must hold that in waiving her prior lien on tolls and revenues and carefully reserving her prior lien on corpus she intended also to waive her lien on corpus in the face of her express reservation of such lien. You must hold that the supposed doctrine re lied on by these bondholders that a grant or mortgage of the rents, profits and revenues of a piece of real estate is in law and equity such an absolute and inflexible grant or mortgage of the real estate itself that no actual intent, however plain, that the grant or mortgage shall not have such effect, shall prevail against such doctrine. You must declare that a mortgage upon the revenues of a public work so means and includes and is equivalent to a mortgage upon the public work itself and all its real estate and property of every description, that no agreement or intent be-tent between the parties, however distinct and express, can give any other meaning or effect to the transaction. You must announce it as your opinion that there is something in a mortgage of the net revenues of such a work so inseparably interwoven with the corpus that the two must go together, and that when a person lends money on the income and expressly stipulates that his security does not and shall not be understood as extending to the corpus, it nevertheless does so inherently extend to it that it cannot be severed or divested. In order to reach such a conclusion you must say that Garrett v. May, 19 Md. 177, in which your predecessors held against the same authorities relied on here, that a pledge of all the income or revenues of a railroad did not amount to a pledge of the road itself creating an equitable mortgage on the road, its franchises and revenues, was erroneously decided. And you must overrule the judgment of this Court in Virginia v. C. & O. Canal Co., 32 Md. 501.
John K. Ctnoen and Hugh L. Bond., Jr. (with whom was C. F. T. Beale on the brief), for the appellees.
By the mortgage of June 5th, 1848, the canal company conveyed “the revenues and tolls of the entire and every part of the canal and its works between Cumberland and Georgetown.” By section 2 of the Act of 1844, chapter 281, the State had agreed that these bonds “ shall be preferred liens on the revenues and tolls that may accrue to the said company from the entire and every part of the canal and its works between Georgetown and Cumberland, which are hereby pledged and appropriated to the payment of the same and the interest to accrue thereon ; ” and by the 4th, 7th and 10th sections had provided that her own rights and liens should be waived, deferred and postponed in favor of these bonds, and be subject to the liens and pledges created or authorized by the Act, reserving only the right to redeem by paying the bonds and the interest thereon. Certainly the State’s contract and waiver are as broad as the canal company’s grant.
1. This grant of all the tolls and revenues carries the entire beneficial ownership. "It is not, however, necessary that the deed should in terms convey the land or thing intended to be granted if such grant is implied from what is described. Thus a grant of the rents, issues and profits ot a tract of land is the grant of the land itself. If the grant be of the use of and dominion over land it carries the land itself.” Washburn on Real Property, Book 3, ch. 5, secs. 4, 23. Caldwell v. Fulton, 31 Pa. St. 484; Legard v. Hodges, 3 Brown’s, Ch. Cas. 530; Green v. Biddle, 8 Wheaton, 76; Income Tax cases, 158 U. S. 601, U. S.; Southeastern Ry. Co. v. Jortin, 6 H. L. C. 424 ; Ketchum v. St. Louis, 101 U. S. 306.
2. What are the grounds of the contention that the grant by the canal company and the contract of the State did not create a preferred lien on the canal l We have shown that by the uniform and established principles of law, applicable to the construction of conveyances and of contracts concerning real and personal property and public works, the effect of the mortgage of 1848, and of the Act of 1844, chapter 281, would be to create a preferred lien on the canal and its works. The contention of the State now is, that those established principles of law do not apply, and that no lien was created. Why ? Can it be supposed, in the face of the authorities cited, that these principles of law were unknown to the parties making these contracts ? To change the natural legal import of these contracts, must there not be shown some clear and controlling intention and understanding that the contracts should not so operate ? The whole argument for the State is contained in the opinion of Judge Alvey.
We submit that even if no reasons appeared why the transaction on the State’s part took the foi'm it did take, yet the circumstances mentioned by Judge Alvey could-notbe held to contradict the legal impoxt of the State’s contract. The State authorized and assented to a form of conveyance the legal effect of which had been settled in the law for hundreds of years. The presumption that the conveyance was to have its legal effect cannot be rebutted by mere inferences. Certainly the mere fact that the conveyance was authorized in that fox'm, and not in another foi'm, can have no weight. But the reason why the State presci'ibed the pax'ticular form of moi'tgage appears on the face of the Act •of 1844 itself. We quote Mi\ Bernard Caller’s admix-able brief on the oxlginal appeal in this case :
“What did it do, and why did it do what it did do, in this regard ? The State of Maxyland, in chartering the canal company, and in assisting with the large sums of money it had spent on it, was moved by large expectations of great benefit to the State and its people, by the construction of what, in those days, was looked upon as a great public work ; and it was well known that even when completed, it might, in its early histoiy, have to struggle with difficulties which might prevent prompt payment'of the interest on the bonds about to be issued ; this is appai'ent on the very face of the Act of 1844; thex-efore, the State determined that it would, while waiving all beneficial intex-est or ownership on its part in the property of the canal company, by giving to' the bonds to be issued to complete the canal, an absolute and preferred lien on all the revenues of the company, at the same time make such provision that every opportunity should be given to the company to live, and under its- management controlled by the State, through its ownership-of the majority of the stock, to serve the great public purposes for which it had been created.
“Acting upon this view, there was incorporated those provisions in the Act of 1844 which declared that, while all the revenues of the company should be devoted to the payment of the interest on the bonds, and eventually to the payment of the principal, yet enough of these revenues should, in the first place, be taken for the purpose of paying the expenses and repairs necessary to keep the canal in operation and as a going concern; in other words, that as long as the canal company could, from its earnings, pay its expenses and keep its work in repair, so as to keep open and in operation this great (as it zvas expected to be) waterway, it should be so kept open and in operation ; and if it took all its earnings to do so, so that there was nothing left of said earnings to be applied to the interest and principal of said bonds, the bondholders must be content, as long as the canal was thus running, to go without payment; provided, always, such failure of earnings was not owing to want of business caused by faulty management by the company. In support of these views, see 32 Md. 535; 26 Md. 310.
“ The two great objects which the State sought to accomplish in the plan embodied in the Act of 1844 (and which are apparent on its face) were, 1st, to get the canal completed to Cumberland ; 2nd, to so arrange matters that the highway should be kept in operation to subserve the great public benefit which it was supposed it would be to the State at large and her people, and that it should be in charge of the company, in which she had a controlling voice; and, provided, any persons could be found to advance the money on terms which would accomplish these two objects, she was perfectly willing, in their favor, to subordinate all pecuniary claims which she had in the property of the company, under her mortgages. Therefore, in pursuance of this plan, and to accomplish these objects, the bondholders were not given a mortgage on the land and works of the company, which, if accompanied with the rights usually attendant on such mortgages, would have given the mortgagees the right, on default, to sell the canal property, and thus oust the company and the State from its control; but a first and absolute lien was given on the entire revenues derivable from the property of the company, which as effectually transferred to them all the beneficial interest in the property of the canal held by the State, until their debts were paid, and yet retained the control of the management of the canal in the company, and so, under the control of the State.
" If the State was not willing that the money necessary to finish the canal should be furnished on any plan which should involve the risk of stopping the operations of the canal, or taking them out of the hands of the company she had (in part) created, and which she controlled, as long as the affairs of the company were not negligently managed, what benefit would have been conferred on the bondholders by taking a mortgage on the bod)'' and works of the canal, which was not acquired by them by a mortgage on the entire revenues of the canal and all the property of the company? If they could not, on default made in the payment of their interest, on, their own motion, sell out the canal, (and we have seen that this the State was not willing to agree to), and if, as we have seen, the conveyance to them, in fee, of the entire revenues of the canal, transferred to them, until their debt was paid, the entire beneficial interest in the whole property of the company, then they had no. object in seeking a conveyance of the land and works out of which the revenues grew.
“ Therefore, though the State at the time of the passage of the Act of 1844 had mortgages which, by their terms, conveyed the lands, property and tolls and revenues of-the company, and, though the mortgage to the bondholders did not, in terms, convey anything but the entire revenues of the company, yet from the foregoing it clearly appears that the absence from the mortgage to the bondholders of any conveyance, in terms, of the land and works was’ not intended in any way to minimize or detract from the usual, and, indeed, necessary effect of a transfer of the whole revenues of an estate, which, as we have seen, as long as it ex ists, is a transfer of the entire beneficial interest in the property, but that this mode of mortgage was adopted to make the protection of the bondholders consistent with the plan determined upon of keeping the canal in operation, and in operation under the control of the State, as long as the revenues to be derived therefrom were sufficient to keep it in operation.
“ Now, no doubt, it is true, and the appellant in no way contends to the contrary, that at the time the bonds of 1844 were issued it was supposed that the revenues of the company would be sufficient in time to pay the bonds. But this fact in no way affects the legal rights of the parties; these are to depend on the legal effect and operation of the Act of 1844, and the mortgage issued thereunder, when those instruments are given that construction which the established principles of the lata permit and require
Are not Mr. Carter’s reasons the more reasonable? Do they not explain the distinction which the Act made between the mortgage to secure the new loan and the mortgage to the State? The contract of the State, as interpreted by the other side, is a legal monstrosity. The supposed divorce of the tolls and revenues of the property from the property itself is impossible in law and unthinkable in reason. The very reason of the doctrine that the disposition of all the income of property disposes of the property is, that no other doctrine is consistent with reason. As Mr. Carter says, it is axiomatic. The attempt to apply any other doctrine leads to the rcductio ad absurdum at every turn.
When the State of Maryland has agreed that the bondholders of 1844 shall have the possession of the Chesapeake and Ohio Canal, and shall take its tolls and revenues until their bonds and interest thereon are fully paid, no Court in Maryland has the constitutional power to say to those bondholders : “ Come, we do not think your contract is beneficial to you ; we’ll sell the canal and give the money to the State.” Should the Legislature attempt to do that thing, would this Court hesitate to declare the law unconstitutional ? Whence do Courts of Equity derive the power to abrogate contracts lawful in themselves ? This question is in no way affected by the decree of October 2, 1890. In that decree Judge Alvey did reserve the power to sell under certain circumstances, but he did not reserve, or attempt to reserve, the power to sell and give all the proceeds of sale to the State. The reservation of the power to direct a sale was so framed as to leave the question open to the future decision of the Court. While the construction given it by the public has done great injury to the business of the trustees, the reservation was so framed as not to constitute a decision on the rights of the parties, and did not in law constitute a ground for appeal by the trustees. The present question, to-wit: The power of the Court to take the canal from the trustees and sell it and appropriate the proceeds to the State so as absolutely to destroy the bonds of 1844 ; this question was not decided by Judge Alvey’s decree. 73 Md. 515. The State asks for the sale only on the condition that the proceeds be given to her and not to the bondholders of 1844. Her application raises squarely the question of the power of the Court to abrogate a contract lawful in itself, the making of which was induced by the very party who now seeks its destruction, and of which that party, and that party alone, has received the benefits. The State’s contract with these bondholders was enforced by this Court in 1891, in this cause. It was certainly in existence then. What has happened since to destroy it ? The trustees have spent $430,000 in repairs on the security of it. The canal is a going concern, producing net reveunes over and above the expenses of operation, repair and improvement. There are now in the trustees’ hands $60,150.18, derived from the operation of the canal and its works. Have these facts operated to destroy the contract ?
The only answer the State makes is that the canal has not produced enough net revenues. Does the Act of 1844 provide that the mortgage shall be defeasible, if the net revenues of the canal be small, or even if they be nothing ? On the contrary, the act recognizes the continued existence of the mortgage in case of the failure of revenue. The question recurs, then, can the Court decree a defeasance of the mortgage because the net revenues have been small ? To decree the defeasance of the mortgage is an entirely different and distinct act from decreeing a sale. We admit that smallness of revenues, unless there be prospect of an increase, would constitute ground on which the Court might say : “ This method of paying off the debts is too slow. The Court will realize a fund from the property, and will distribute it to the creditors in the same order in which they would respectively be entitled to receive payment from the net revenues. Thus deferred creditors will not be forced to wait so long, and lose interest on their distributive shares.” So far the power of a Court of Equity extends, but no farther.
The exercise of power which the State is asking here is entirely different. She asks that the fund realized from the sale be distributed, not in the order of priority in which the net revenues would be distributed, but to her, to the exclusion of those who, by her own contract, are entitled to be preferred over her in the distribution of the revenues. By her contract she agreed that her own claims should be "waived, deferred and postponed” until these bonds were fully paid out of the revenues, and that the bondholders, through their trustees, should have possession for the purpose of appropriating the revenues to the bonds. If now the State finds that method of payment too slow, and asks for a conversion of the property into money, she must pay those bonds out of the money realized before paying herself ; otherwise she would repudiate her contract.
But there seems to be lurking in the minds of counsel for the State an idea that if they can impress the Court with the opinion that the contract rights of the bondholders of 1844 are of small value, the Court will disregard those rights altogether, and will decree their destruction. From this idea springs the constant effort to belittle what the trustees have accomplished. The repair and operation of the canal by the trustees is described as ‘' an experiment which has proved a dismal failure,” &c., &c. Whence does a Court of Equity derive the power to rescind a contract and ■release the obligor, on the ground that he thinks, or the Court thinks, that the contract is of no great value to the obligee ? Hitherto, we believe, the rule has been that contracts should be rescinded only by the voluntary consent of the parties. When the opinion of a Court as to the value of the contract shall determine its binding force, the inviolability of contracts will have ceased to exist.
Benjamin A. Richmond, for the labor claims.
The docket title of this case was The State of Maryland v. John K. Cowen, et al., Trustees.

Opinion:
Fowler, J.,
delivered the opinion of the Court.
This appeal presents questions growing out of the controversy between the State of Maryland and various classes of creditors having liens against the Chesapeake and Ohio Canal, its property, franchises, revenues and tolls. The State is the largest creditor, and next to it stands the appellees, who represent the bonds issued under the Act of 1844, ch. 281, as well as those of-1878, ch. 58, generally known as repair bonds, which latter are conceded to be a prior lien on the canal, its property and revenues, so far at least as concerns the claim of either the State under its mortgages or of the appellees under the Act of 1844, ch. 281.
While the history of the canal and the relation of the State to it as creditor and the legislation which from time to time has been adopted by the State for the purpose of waiving its liens in favor of others, are so well known that it would be useless to refer to it here, it will be necessary, in order to have an intelligent understanding of the questions before us, to examine the decree in this case which we affirmed on the former appeal and which is reported in 73 Md. 503, as well as to refer somewhat fully to the opinion of this Court in that case, which was delivered by the late Chief Judge Robinson.
The decree which we have said was affirmed in 73 Md. provided that upon certain conditions therein prescribed the appellees should take possession and control of the canal, together with its rights and property, with power and authority to use and exercise the franchises of said company and operate the said canal to the same extent that said company could do. Provision was made for the disposition of the net revenues, and in the sixth section of the decree it was provided that if at the end of four years from the first day of May, 1891, there should not be tolls and revenue over and above the amount necessary to pay cur^, rent operative expenses and to keep the canal in repair, sufficient to liquidate and discharge the amount of repairing and restoring the canal to a working condition from its then broken condition, and the amount necessary to pay expense and compensation to the receivers, and also certain other expenses not necessary now to mention " such failure in the tolls and revenues was to be regarded as evidence conclusive (unless the time be extended by the Court for good and sufficient cause shown) that the said canal cannot be operated so as to produce revenue with which to pay the bonded indebtedness of the said canal company." It was also one of the provisions of that decree that whenever it shall clearly appear that the said canal cannot be operated by the said trustees so as to produce revenue with which to pay the bonded indebtedness of said company, the right and power was reserved to the Court to order and direct a sale, as provided by that decree.
Prior to the expiration of the four years mentioned in the decree, during which the appellees were to possess and operate the canal, they applied by petition to the Circuit Court for Washington County for the extension of time they were authorized to ask for by said decree, for the purpose, as they allege, that they might have an opportunity under better auspices to demonstrate that the canal would, with proper management pay annually out of its net tolls and revenues something on account of and in reduction of its bonded indebtedness. The State, through its Attorney-General, resisted this application, first, upon the ground that it was premature, and secondly, because, assuming that the Court below had the power upon a proper case to grant the extension, the appellees had failed to make out such a case as called for the further interposition of the powers of a Court of Equity. But the Circuit Court having come to the conclusion that the appellees had shown good and sufficient cause, on the i$th February, 1895, passed an order so declaring and directing that the said period of four years jxxed by the decree should be extended to the end of six years from the first day of May, 1895. From this order the State has appealed.
It was not seriously contended in argument that if a proper case was made, the Court did not have power to pass the order appealed from, and we shall therefore proceed at once to consider the question presented. But before doing so, it is proper to mention the fact, that after the question as to the extension of «time, which was regarded as the only one directly presented by this appeal, was argued in this-Court, we acquiesced in the request expressed at the hearing, that befoi-e passing upon the question of sale vel non, the question as to the pi'ioxdty of liens as between the State and the appellees, should be fully px-esented, so that in case this Court should come to the conclusion that a sale should be had, there need be no further delay caused by reason of the uncertainty of the x'ights of the State or of the appellees in i-espect to their respective liens—it being apparent, as we said in 73 Md., that the question as to the priority of liens is one " which the pai'ties are entitled as matter of right to have decided before a sale is made."
The principal question with which we are confronted^at the vexy outset is whether the canal shall be sold. In order to solve this question in a satisfactory manner it will be necessary to point out the relations of the parties to each other and to the encumbered property, and thus to ascertain their respective rights in and to said property. There can be, we think, no difficulty in so doing, for these rights and relations, with one exception, have been so clearly and fully fixed by what we said on the former appeal (73 Md.) that we need only refer to and cite portions of that opinion to show what these rights and relations are.
What, then, was decided on the former appeal? We affirmed the decree of the Circuit Court for Washington County, holding, first, that these appellees were, by virtue of their rights under the Act of 1844 and the mortgage of June 6th, 1848, which was executed in pursuance of said Act, as well as because of their rights as trustees for the holders of the bonds issued under the Act of 1878, ch. 58, entitled to take possession of the canal upon the terms prescribed by the decree ; second, that the appellees being lawfully entitled to the possession of the canal under the decree, they must " be allowed to put it in a condition to produce revenue—otherwise its possession would be without benefit to them." It was, however, contended on the former appeals as now, by the State, that whatever may be the rights of the appellees, as against the mortgagor, the canal company, the State has superior lights under its long overdue mortgage, and especially the right thereby to demand an immediate sale of the entire canal and its franchises —free from any claim of the appellees as trustees-under the Act of 1844. The attempt to enforce this right was thus commented on in 73 Md.:
" Now upon what grounds can this right be supported ? To induce the bondholders of 1844 to furnish the money necessary to complete the canal, the State not only agreed to waive its own liens upon its revenues, but agreed, also, that the company should pledge them by mortgage as security for the payment of these bonds. And now, when the State and the company have operated the canal till they are no longer able to operate it, and when the canal itself is no longer in a condition to earn revenue, and the com pany, during all these forty years, has been in default in the payment of its indebtedness, according to the terms of the mortgage, and when the bondholders ask to be allowed to take possession of the canal, and to repair and operate it for the purpose of ascertaining whether it can be made to produce any revenue applicable to the payment of the mortgage, the State interposes and insists that it shall be sold clear of the liens of these bondholders, which the State agreed should be preferred liens upon its revenues, and when it is sold, the State further claims as against them, the entire proceeds of sale, because their liens, it is said, extend to the revenues only, and not to the property of the canal. In other words, the State insists that they shall be deprived of the only remedy open to them by which they may have the opportunity, at least, of reimbursing themselves for the money which they, at the instance of the State, furnished to finish the canal. So it is not the case even of a junior incumbrancer asking for the sale of mortgaged property, and the proceeds of sale to be applied to the payment of the several liens upon it, according to their priority ; but it is one in which the State, holding liens upon the revenues and property of an unfinished canal, in order to induce others to furnish the money necessaiy to finish it, waives its own liens upon the revenues in favor of such persons, and then insists that the canal shall be sold, whereby .these liens are destroyed. Wc do not see on what ground, legal or eqttitablc, such a contention as this can be supported
Such being the rights of the parties, and the appellees having been in possession of the canal for the past four years, and the right of the State to demand a sale having been thus denied by us in 1891, when the canal was in a broken and useless condition, what has happened since that time which would justify us in now ordering a sale?
This brings us to the consideration of the direct question presented by this appeal, namely, should the application for an extension of time be favorably considered. The answer to this question depends upon the terms and conditions of the decree, which, as we have seen, has already been affirmed, and the facts relied on by the appellees, which we do not understand to have been seriously denied to show that, as a matter of justice and equity, the extension of time asked asked for, should be allowed. As we have seen were held in the former appeal (73 Md.) that not to have granted the appellee's possession of and time to operate the canal for the benefit of their cestuis que trustcnt would have been inequitable as well as illegal under the then existing circumstances. Then the canal was a wreck —useless for any of the purposes for which it was intended; now it has been restored. Then the appellees had not expended nearly half a million dollars, which they have since done, in restoring it to its unprecedented good condition. It is apparent also that it was impossible then to know definitely what would be the effect upon the future business of the canal of the conditions under which the appellees took possession. The amount of money as well as the length of time required to repair the canal could only be estimated, and the many difficulties encountered by the appellees as set forth in their petition and brief, could not possibly have been foreseen, nor could they have been provided for, except by the wise provision which was inserted in the decree providing for an extension of time upon showing good and sufficient cause. If it was inequitable to deny the appellees possession of the canal in 1891, we think it would be even more so now, when, in addition to the loss they would then have sustained by a sale, they would, according to the State's contention, now lose also the large amount they were authorized under the decree to spend in repairs and restoration.
But, irrespective of the right of the appellees to possession upon equitable grounds, based on the facts set forth in their petition, and the conditions upon which they took posession, we do not think that the State can maintain its right to a sale upon any fair or reasonable construction of the Act of 1844, ch. 281, its mortgage of January 8th, 1846, and that of the appellees of June 5th, 1848, which together contain the contract between the canal company, the State and the bondholders of 1844; Certainly no right to such a sale can be enforced until it appears that the cestuis que trustent can derive nothing on account of their claims from the operation of the canal by the appellees. It is manifest that under the decree we affirmed no sale of the canal by the State, under the terms demanded by it, can be decreed until " it shall clearly appear that the said canal cannot be operated by the said trustees so as to produce revenue with which to pay the bonded indebtedness." But the rights of the bondholders of 1844 are still more emphatically recognized in the mortgage which the State accepted from the canal company, for we find in that instrument the following provision : " Subject, nevertheless, to all and singular the liens and pledges created by the provisions of the Act of 1844, which said liens and pledges are in nowise to be lessened, impaired or interfered with by this deed or by anything herein contained." Assuming, then, that the contention of the State is correct, namely, that the appellees representing the bonds of 1844 have a lien only on the net revenue and tolls, and have no claim whatever by virtue of said bonds on the proceeds of sale of the canal, its property and franchises, it would necessarily follow, unless the canal is worthless and cannot be operated to any advantage for said bondholders, that a sale would not only impair and lessen their lien, but would absolutely destroy it. But so far from the canal being in such a hopeless condition, we think enough can be found in the record before us to demonstrate that under its present management by the officers appointed by the Court, and who are under its control and supervision, the business, as well as the earning capacity of the property, has been largely increased. Notwithstanding the fact that the appellees, after restoring the property to a condition for earning revenue, had to build up the business and .win back the tráfñc which had been diverted to other routes of transportation, they appear to have met with success. For during the few months of the year 1891, during which the canal was in working condition, there were carried by it 50,533.14 tons. The next year, although there was a scarcity of boats, over 250,000 tons were carried. And in 1893 the tonnage arose to 336,295, which has not been equalled during the past ten years. Under these circumstances we are not disposed, even if we had the power, to decree a sale at this time, and thereby destroy the only source from which, as contended by the State, the bonds of 1844, or any part of them, can ever be paid, and at the same time, perhaps, deprive the public of one of fhe means of cheap transportation of coal and farm products which the canal now affords. For it will be remembered that the State had been careful, in order to protect itself and its citizens, as well as those who should advance their money to complete the work, to provide in the charter granted to the company " that the said canal and the works to be erected thereon in virtue of this Act, when completed, shall forever thereafter be esteemed and taken to be navigable as a public highway." When, therefore, it appears, and not till then, that the property cannot be operated so as to produce revenue applicable to the payment of the bonded indebtedness of the company, then, under the provisions of the decree affirmed by this Court, the Court may be asked to decree a sale under the State's mortgage. Until that time, in other words, until it " clearly appears " that the liens of the appellees are valueless and can therefore neither be lessened nor impaired, a sale under the conditions demanded by the State, as was said in 73 Md., State v. Brown, can be supported upon no ground, either legal or equitable. We have already indicated our opinion that it has not yet been made clearly to appear that the said lien of appellees has become valueless ; and, therefore, it would follow that no such decree of sale would be valid, because neither the State, acting by its officers, the Courts, nor through the Legislature, can destroy or impair liens which exist by virtue of contract.
We have thus far assumed, as contended by the State, that the appellees have no claim upon the corpus of the canal or the proceeds of its sale, in case a sale should be ordered, but that the only source from which they can look for repayment of the bonds of 1844 is from net revenue and tolls. This question has been during this term most ably and elaborately argued. But, inasmuch as we have come to the conclusion that there can be no sale at present, under existing circumstances, the question as to the distribution of the proceeds of such sale, ceases to have that commanding importance which would otherwise attach to it. We think, however, there cannot be any doubt as to the correctness of the views upon this question expressed by Judge. Alvey, former Chief Justice of this Court, while presiding in the Circuit Court for Washington County in the former trial of this case. We can add nothing to the force and fullness of the convincing arguments so cogently presented by him in that able opinion, and upon the views therein expressed we are content to rest our conclusion that the lien of the bondholders of 1844 is limited to the net revenue and tolls of the canal. Opinion of Alvey, C. J., Appendix 73 Md. 590-600.
According to the provisions of the decree the amount expended by the appellees in restoring the canal, to-wit: the sum of $430,764, with interest, is to be paid from the tolls and revenue, after paying certain other expenses as set forth in the decree. This decree stands affirmed by this Court, and is the law of this case, so far as applicable. If we had come to the conclusion to decree a sale upon the conditions asked by the State, and the source, namely, the revenue, from which this sum is decreed to be paid, had been thus destroyed, another question, not now before us, might be presented.
During the argument at this term in reference to the question of priority of liens, some reference was made to what are known as the labor claims "for labor and supplies furnished the company before the freshet of 1889 to keep the canal in repair and operation." These claims, however, were not before the Circuit Court for Washington County at the time of the former appeal, and they are not before us now. Hence no definite determination can be made in regard to them.
To a contract such as that proposed to be made by the appellees with the Chesapeake and Ohio Transportation Company, and approved by the Court .below, we can see no valid objection. The rights of both parties, as well as those of the public in relation to the canal appear to be carefully guarded. By means of this contract the appellees will secure a guaranteed fixed income of not less than $100,000, and an increased number of boats, thus increasing facilities for transportation, and providing means for increasing the revenue and tolls. Without further reciting the various provisions of the contract, we agree with the learned Judge below that there is no good reason why a contract similar to the one proposed should not be authorized by the Court. It provides that " nothing therein shall be taken to give the Transportation company any exclusive rights whatever on the said canal, or to prevent the appellees from making with any other person or corporation a contract or contracts similar to the one proposed in whole or in part, or that the use of electrical power, if it be found practicable, shall interfere with the use of animals or steam by individual boat owners."
It will be seen that we are of opinion, first, that under the circumstances disclosed by the record the appellant is not now entitled to a decree for sale of the canal, its property and franchises, and that, therefore, the order of the Court below extending the time for operating the canal by the appellees under the order and control of that Court, should be affirmed ; second, that the bondholders of 1844 are entitled to payment out of and have a lien only on the net revenue and tolls ; third, that although the State has waived its lien on the canal and its revenue and tolls in favor of the labor claims, as they were not before the Circuit Court for Washington County, nor in any manner passed upon by the order appealed from, we cannot on this appeal dispose of them; and fourth, that the contract proposed to be made between the appellees and the Transportation company is proper and appropriate to enable the former to operate the canal advantageously.
(Decided June 17th, 1896).
And in conclusion we may say, as we substantially said in the opinion from which we have already quoted (State v. Brown, 73 Md. 503), that we have nothing to do with the alleged ulterior purposes of any of the parties to this controversy. We have endeavpred to dispose of the questions considered in accordance with what appear to us to be the clearest principles of law, equity and justice. But, if by reason of the conclusion we have reached, the appellant shall be prevented from enforcing its claims by a sale, and if it is thus prevented from destroying the canal as a waterway, it may be some satisfaction to remember that the view we have expressed is in strict accordance with' the solemn declaration the State has made, that the canal shall forever be taken and esteemed as a navigable highway. It has, however, been doubted whether the property in question could under any circumstances be sold for enough, so that, after the payment of all-claims which are conceded to have legal priority over that of the State, there would be anything left to go towards a reduction of its claim of many millions. But whether this be so or not, whether the sale would produce much or nothing towards the paying the State's claim, her contract that the liens of the appellees created by the Act of 1844, should not be lessened, impaired, or interfered with by her under her mortgage, must be recognized and enforced, and her good faith impliedly, at least, pledged for the maintenance of the canal as a waterway by the declaration in the charter she granted that the canal should forever thereafter be esteemed and taken to be a navigable highway, must be maintained at any cost.
Order affirmed.
Bryan, Briscoe and Page, JJ., dissented, and Bryan, J., delivered the following opinion, in which Page, J., concurred :