Page:Federal Reporter, 1st Series, Volume 3.djvu/695

 688 FEDERAL EBPOETBR. �and the company màde no promise to the bond holder. Sueh equity created no lien which foUowed the property ; the liabil- ity of the state was to the bond holder. She held no relation as surety to him ; as in the Chamberlain case, it was only as between hier and the company that in any possible view the state could be regarded as surety, and this view would make it necessary to treat the company as the principal debtor to the bond holder, whereas the company was not the principal debtor, nor, indeed, a debtor to the bond holder in any degree. �The reasoning in the case of Hand v. Railroad Co., in the supreme court of South Carolina — manuscript — referred to on, the argument, cannot ail be adopted as applicable to these cases, if the conclusions might be. �It is not upon its fact authority. The railroad company made its own bonds, and the state guarantied their payment to the holder by indorsement. The state was secured by a lien upon the company's road, reserved by the statute which authorized the guaranty. As a surety, the state assumed contract obligations to the crediter — the bond holder. If a creditor bas a right to claim the benefit of seeurity given by the debtor to his surety for the latter's indemnity, it does not follow that the right exists where the principal debtor takes the seeurity from the acoommodatee, and where the seeurity holder holds no other relation to the creditor than that of debtor, and the giver of the seeurity is neither a debtor nor surety to the creditor, �It becomes unnecessai-y to further consider the effect of the reservation of power to the state under section 12. The court bas already stated that such reserved power is ample to an- thorize a modification of the sinking-fund provisions, as bas been done by increasing the amount to be paid annually into the sinking f und and changing the ti'me for such payment to commence. �It follows that by this judgment neither the foreclosed nor the non-foreclosed roads are subject to any lien in favor of the holders of internai improvement bonds issued by the state bf Tennessee, under the acts passed by that state, and to ����