Page:Federal Reporter, 1st Series, Volume 3.djvu/681

 674 ■ PED'EEAL :ilEPORTEB. �state and the companies are in default in the payment of the interest siace July, 1875, the bond holders by these euits seek to have a lien in their favor established upon the roads. �The general assembly of the state of Tennessee passed, February 11, 1862, an act known as the "Internai Improve- ment Act of the State of Tennessee," extending aid to railroad companies by a loan of state bonds, the proceeds to be nsed in ironing and equipping the roads. Prior to the time of passing the act there had been issued state bonds for varions purposes, of whioh above $3,500,000 was outstanding. The state of Tennessee was now in good credit. Her 6 per cent, bonds brought a premium in the money markets of the world, as did also, subsequently, her bonds issued to the defendant railroad companies under the act in question, and acta amendatory thereof, which bonds are the subject of contro- versy in these suits. The, scheme of internai improvement now adopted was to issue to each company 6 per cent, bonds to the amount $8,000 per mile, in instalments, — afterwards extended to $10,000, — the first when a section of 30 miles of road was completed ready for the ties, and the subsequent instalments upon completion of each additional section of 20 miles; afterwards changed to 10 miles. The bonds are transferable by delivery, run not less than 30 nor more than 40 years from the respective dates of issue, the interest matures semi-annually, and, with the principal, is payable in New York. They were paid to the railroad company, and Bold in open market, without indorsement or guaranty. The state was invested by the terms of the statute with a lien upon each section of the company's road as soon as the bonds for that section were issued, and upon final completion of the road such lien was to attach to the entire road and its equip- ments. Tho company was to be incapable of creating any lien conflicting with that in favor of the state. �The amount of the lien claimed by complainants in behalf of such bond holders upon ail the railroads is about $15,- 000,000. The litigation, however, affects the holders of be- tween $30,000,000 and $35,000,000 of other mortgage bonds gecured upon these roads, and issued under authority of the ����