Trustees of Wabash & Erie Canal Co. v. Beers - 67 U.S. 448 (1862)
U.S. Supreme Court
Trustees of Wabash & Erie Canal Co. v. Beers, 67 U.S. 2 Black 448 448 (1862)
Trustees of Wabash & Erie Canal Company v. Beers
67 U.S. (2 Black) 448
1. Where the legislature of a state authorized commissioners to borrow money to be used in making a canal and for the redemption of the loan pledged the canal itself, its tolls, rents, and lands, the lien of a lender under such act cannot be divested or postponed by a subsequent act of the legislature.
2. The holder of bonds given for money advanced under such a law has a security for his debt which is protected by that provision in the Constitution of the United States which forbids a state to pass any law impairing the obligation of a contract.
3. The bondholder does not lose his lien on the lands and revenues of the canal by surrendering other bonds of a later issue and of inferior security and taking canal stock and other bonds of the state in place of them.
4. The holder having a legal security incapable of being defeated without his consent, his surrender of one class of bonds raises no presumption either of law or fact that he intended to, give up his rights under the bonds which he kept.
5. Where a lien creditor brings a bill in behalf of himself and other creditors of the same class, and with similar rights, the decree should provide proper relief for all of them.