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SMITH V. MCCULLOUGH, 104 U. S. 25 (1881)

U.S. Supreme Court

Smith v. McCullough, 104 U.S. 25 (1881)

Smith v. McCullough

104 U.S. 25




A mortgage executed by a railroad company upon its then and thereafter to be acquired "property" contains a specific description of the different kinds of such property. Held that certain municipal bonds, issued to aid in building the road, which are not embraced by such description, do not pass by the use of the general word "property."

The case here presented is an outgrowth of a suit instituted in the court below for the foreclosure of a mortgage executed on the first day of April, 1872, to the Farmers' Loan and Trust Company, by the Burlington and Southwestern Railway Company, to secure the payment of certain bonds issued by the latter. A decree of foreclosure having passed, Elijah Smith, the receiver in that suit, filed his petition therein (to which Warren McCullough and other persons were made defendants) asserting his right, as such receiver to certain county bonds of the par value of $40,000 (or their proceeds), constituting the last installment of an issue of $200,000 by Sullivan County, Missouri, in payment of its subscription made in 1871 in aid of the construction of the Linneus Branch of the Burlington and Southwestern Railway. The entire issue, conformably to the contract of subscription, was originally deposited in the hands of McCullough, as trustee for the county and the railway company, with authority to deliver them in installments of $40,000, as the work of construction progressed. By the terms of that contract, the railway company was entitled to receive the last installment when the branch road, with the iron and rolling stock thereon, was completed and paid for by the company. Prior to Smith's appointment as receiver, all the bonds had been delivered except $40,000 which the railway company had not earned and which, by reason of its insolvency, it had, as is now claimed, become unable to earn.

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