Page:Federal Reporter, 1st Series, Volume 2.djvu/46

 KTSa V. 0. <fe U. B. 00. S9 �and security and first claim upon ail the property and fran- chises of the Consolidated railway company which existed at the time of the original issue of sueh preferred stock, which was in or ahout the year 1867, next after and subject only to the indebtedness of the $6,000,000 mortgage authorized by the articles of agreement, being the indebtedness created by the mortgage or deed of trust of December 24, 1867, and June 23, 1869, which last mortgage covers only the Louis- ville branch. Of course, if this claim were well founded it would postpone the payment of ail indebtedness under the second mortgage until the claims of the preferred stockhold- ers were satisfied. Both the original and cross-bills of 1876-7 are framed on the assumption that this claim of the preferred bond holders was not well founded, as they each entirely ignore any such claim, and in any payments which have been made by the receiver on the first and second mortgages this claim of the preferred bond holders has also been disregarded. �It is alleged, on information and belief, that the existence of the preferred stock and of the character of the certifioates issued for the same, and that such stock was and would always remain secured by a specifie lien upon ail the prop- erty and franchises of the railway company, subject only to the indebtedness created by the first mortgage, were well known to the trustees under the second mortgage, and also to the holders of the bonds issued under the second mort- gage ; and, in short, to ail parties who are elaiming their liens to be superior to that of the preferred stockholders. There is not set forth in the cross-bill any substantive act creating a specifie lien upon the property in the way of mortgage or deed of trust in favor of the preferred stock, unless the certifioates, or some agreements or stipulations which have been made and referred to, should constitute such a lien. �Whether or not, therefore, there was a specifie lien must depend upon what aetually occurred, and what agreements, stipulations and contracts affecting the property were entered into by parties who had the right to encumber it, and not upon what might have been in the minds of the preferred Btockholders at the time these various transactions took place, ����