Alabama v. Montague
117 U.S. 602 (1886)

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U.S. Supreme Court

Alabama v. Montague, 117 U.S. 602 (1886)

Alabama v. Montague

Submitted March 31, 1886

Decided April 12, 1886

117 U.S. 602

Syllabus

By an act of the Legislature of Alabama, the state loaned its credit to the Alabama & Chattanooga Railroad Company upon condition that the company should first give to the state "a first mortgage upon the lands granted by the United States to said railroad company" and a first mortgage

"on the telegraph line and telegraph offices along the line of said road belonging to said company; also on the machine shops and all outer property in the state and in Georgia, Tennessee and Mississippi belonging to said company; also on all coal mines now opened or hereafter to be opened and worked, belonging to said company; also upon all iron or other mineral lands, and all iron manufacturing establishments now in operation and hereafter to be constructed."

The company made a mortgage to the state in which the words of description were identical with the language of the statute. In a suit in equity brought to foreclose the mortgage as covering some town lots in Tennessee not granted by the United states to the company and not coming within either of the specified classes,

Held:

Page 117 U. S. 603

(1) That the words of description in the mortgage did not cover the lots.

(2) That the words "all other property" were intended to cover property of the company in and about the telegraph offices, machine shops, coal mines, iron mines and manufacturing establishments about which a doubt might otherwise arise whether it was part of those classes of property.

Wilson v. Royce,92 U. S. 320, distinguished.

This was a bill in equity to foreclose a mortgage alleged to have been made by the Alabama and Chattanooga Railroad Company to the State of Alabama on certain town lots in Chattanooga. The case is stated in the opinion of the Court. For the purpose of understanding the points made in argument, it is sufficient to say that the act of the Legislature of Alabama, authorizing the loan of the credit of the state to the company contained the following provision:

"That the governor of the said state shall only issue said bonds upon receiving in exchange therefor an equal amount of first mortgage bonds of said railroad company, bearing the same rate of interest as the above-mentioned state bonds and secured by first mortgage upon the lands granted by the United states to said railroad company and upon any interest which said company now has or may hereafter lawfully acquire in or to said lands, with this reservation, . . ."

"Provided further that the governor shall require said railroad company, before issuing to said company said bonds, to give the State of Alabama a first mortgage on the telegraph line and telegraph offices along the line of said road belonging to said company; also on the machine shops and all other property in the state and in Georgia, Tennessee, and Mississippi belonging to said company; also on all coal mines now opened or hereafter to be opened and worked belonging to said company; also upon all iron or other mineral lands and all iron manufacturing establishments now in operation and hereafter to be constructed."

The company executed the required mortgage with words of description identical with those in the mortgage. It was not claimed in the bill that the premises in controversy were embraced in either class of property specially named, but they were shown to have been acquired by deed subsequent to the mortgage in execution of a contract for sale made prior to it.

Page 117 U. S. 604

Decree below for respondent on the ground that the statute of limitations was a bar, from which complainants appealed.

Page 117 U. S. 605

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