Page:Federal Reporter, 1st Series, Volume 3.djvu/688

 STEVENS V. L. & N. R. CO. 681 �said section, * * * and the state of Tennessee, upon the issuance of said bonds, and by virtue of the same, shall be invested with said lien * * * for the payment by said Company of said bonds, with the interest a? the same becomes due." �This section of the statute relates only to the first division of 30 miles, but the lien there declared is by another part of the act applied and extended to each additional section of 20 miles as fast as completed, and finally to the entire road, as security "for the payment of ail bonds issued to the Com- pany." Section 4. �The lien upon the property of the company was effected by virtue of the statute upon the issue of the bonds by the state and their acceptance by the company. Unless an intention of the legislature to secure the purchaser of the bonds can be implied from the act and the dealing of the parties, the claim of complainants to the relief asked in these suits rests upon a mere equity. There is no deniai that it was the state of Ten- nessee which was invested with the lien, but it is said that she occupies the position of a surety holding security for the payment of the debt, which security the crediter — the bond- holder — can, upon default of the principal debtor, — the rail- road company, — avail himself in equity; that default by the company and by the state in the payment of the interest hav- ing occurred, the state becomes, and is, a trustee of this lien for the benefit of the bond holder. It was the state and the railroad company that dealt togetlier in this matter. The statô dictated the tenns upon which it would grant aid, and the company accepted those terms without reference to what the purchaser of the bonds would say or claira. The bonds were loaned by the state, and passed over to the company to be sold for money to aid or accommodate the company. The bonds were accepted by the company upon the understanding: and agreement (1) that the state was invested with a lien upon the company's railroad and property to secure "the pay- ment by said company of said bonds, with the interest thereon as the same becomes due;" (3,) that the interest should be paid by the company -to the financial agent of the ����