Court Opinion

ID: 5557503
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:43:58.285344+00
Date Added: 2024-06-11T08:35:22.478433
License: Public Domain

McCay, Judge.
The whole equity of the bondholders to be subrogated to the security given by the road to the state as the indorser of the bonds, depends upon the fact that they became the pur*317chasers of the bonds upon the faith of the state’s indorsement. We do not go into the question of the right, even of these bondholders, to be so subrogated — that lias been decided1 by the court below without appeal, and, for the purposes of this case, is admitted. We ean only say that there seems lo be equity in it. The bondholders may fairly be presumed to have looked behind the indorsement, and to have advanced their money in view of the fact that the state, the apparent indorser, was secured by the mortgage. At any rate, that is the equity upon which the decree is based — the fact that the state seemed to be the indorser — that they advanced their money on the faith of the indorsement, secured as it was by the mortgage. Nothing of that kind can be said in favor of Clews, the holder of the other bonds. He was not in any way deceived. He knew there was no indorsement of his bonds. He trusted nothing to the indorsement, and, therefore, nothing to the mortgage given to secure it, and he does not in any fair sense come within the equity on which the decree is based. Besides, as an officer of the company, he is charged with notice that his bonds were issued directly in the teeth of the charter, upon a part of the road not even graded, when, by the terms of the charter, the bonds were only to be issued on each section of twenty miles as it was completed. We think Judge Hill was right. There is no view of the case that brings these bonds, hypothecated to Clews, within the equity of the decree.
Judgment affirmed.