Railway Company v. Sprague - 103 U.S. 756 (1880)
U.S. Supreme Court
Railway Company v. Sprague, 103 U.S. 756 (1880)
Railway Company v. Sprague
103 U.S. 756
1. A mortgage executed by a railway company, to secure its bonds, provides that, in case of default for six months in the payment of the interest upon either of them, the entire amount of the debt secured "shall forthwith be come due and payable," and that the lien of the mortgage may be at once enforced. The bonds themselves declare that,
"in case of the nonpayment of any half-yearly installment of interest which shall have become due and been demanded, and such default shall have continued six months after demand,"
the principal of the bond shall become due, with the effect provided in the mortgage. Held that the mortgage being a mere security, the terms of the bonds must control in determining when the principal is payable.
2. Overdue and unpaid interest coupons do not of themselves make the bond to which they are attached dishonored paper. Cromwell v. County of Sac, 96 U. S. 51, cited and approved, and Parsons v. Jackson, 99 U. S. 434, distinguished.
3. The facts in this case show that the appellee is a bona fide holder of the bonds in controversy.
The facts are stated in the opinion of the Court.