Page:Federal Reporter, 1st Series, Volume 8.djvu/138

 12e FEDERAL REPORTER. �fined to those already out. This, however, tliej' did not see fit to do, and corisequently the rights of those they represent dej^eud on the effect to be given the instrument they took; and in this, as it seems to me, the intention of the company to keep the first moitgage on foot as a standing and continuing security, to the full extent of the oiigi- nally-authorized issue, is elearly manifested. The language is "that the mortgage herein above granted shall be and continue at all times subject to the lien of the mortgage executed by the South Caro-, lina Eailroad Company to Henry Gourdin, H. P, Walker, and James M. Calder, and to all renewals or extensions of said mortgage, or of the bonds secured thereby, to the full amount of the principal of said bonds." This, I think, means not only the principal of bonds then out- but of all that might thereafter lawfully be put out under the mort- gage, as well. The use which the company had been making, and which it was no doubt expected would be continued, of the surplus bonds remaining after providing for the old issues, must have been in the minds of all. One of the trustees under the second mortgage was at the time director of the company, and the idea of actually cancelling any of the old lien in favor of the new, seems never to have been sug- gested by any one. �The question is thus distinctly presented whether bonds then in the hands of the company, or which afterwards got there, coul^ be issued or re-issued so aa to carry with them a lien under the tirst mortgage as against the second. This, as it seems to me, is a question of intention to be gathered from the language of the instrument, con- sidered with reference tO the surrounding oireumstances and the sub- ject-matter of the contract. I am aware that, ordinarily, a debt once paid is extinguished, and that as a mortgage is but an incident of the debt it secures, if there is no debt there can be no mortgage. But here the point of the inquiry is whether the parties intended to apply this rule in all its strictness to the prior mortgage, about which they were contracting. Certain it is that, before the mortgage can be cancelled, the debt it pijrports to secure must be shown never to have been created, or, if created, extinguished within the meaning of the contract for security expressed in the mortgage. As against other bondholders secured by the same mortgage, I cannot believe there is a doubt of the power of the company to put out and keep out the entire issue up to the time the bonds become due. The contract with the individual bondholder is no more than that he shall have his due proportion of the security the mortg-ige on its face' implies. �Eailroad bonds are a kind of public fund;s. They are put ou tho ��� �