Page:Federal Reporter, 1st Series, Volume 7.djvu/444

 432 FEDBBAL BEPOBTEB. �Chandler e Thompson, Bynum e Grier, J. H. Bion, and Mr. Brown, for complainants and trustees. �Evans, Bobo e Carlisle, Shipp d Bailey, J. H, Merriman, T. Coleman, W. J. Montgomery, and M. E. Carter, for de- fendants. �Bond, C. J. This is a bill filed by the mortgage trustees and the bondholders, secured by the mortgage against the defendant corporation and others, to-wit, creditors of the de- fendant corporation claiming mechanics' liens and statutory liens for la,bor done on the Spartanburg & Asheville Bailroad, to foreclose the mortgage and sell the road pursuant to the terms of the mortgage. The case is for final hearing upon the pleadings, evidence, report of the special master, and exceptions to his report. The material facts reported by the master are not controverted, and are these : �The Greenville & Prench Broad Railroad Company was incorporated by the legislature of North Carolina, February 13, 1855, and the Spartan- burg & Asheville Railroad Company was incorporated by the legislature of South Carolina, February 20, 1873, and the two companies were Con- solidated under the name of the Spartanburg & Asheville Railroad Com- pany, July 31, 1874, under the general laws of the two states, and the new Company thus formed is clothed with all the rights which were originally conferred upon the separate companies. The defendant company thus organized commenced to build its road froin Spartanburg, in South Caro- lina, to Asheville, inKortu Carolina, and, having expended its assets, the stockholders rcsolved, on the ninth day of August, 1876, to issue and scU bonds to the amount of $670,000, and to secure their payment and interest on them by a mortgage upon the Consolidated road. The mortgage waa duly executod by the company on the first day of October, 1876, and the bonds to the amount of |642,000 were sold or hypothecated, and came into the hands of the plaintifE holders and others for value bonaftde. The third section of the mortgage, which is flled as an exhibit, contains the conditions of it and the powers granted to the trustees, mortgagees there- under. It was not seriously contended in the argument that the defend- ant company had not power to make the mortgage, or that the conditions, had not been broken at the commencement of this action. �The master so finds, and his report is hereby confirmed, The defendant creditors daim that they, as contractor» and laborers, have a, lien upon the road prior and superior to the bondholders, and are first entitled to the proceeds of the sale of the road, if the court should decree a sale. Thip is the priuciple question m the case. These claimants are of two> ��� �