, _DERAL REPORTER,

vol. 50,

with interest; also no notice was ever given to petitioner to present 'the same for payment. Wherefore petitioner prays that said certifmay be declared a first and paramount lien upon so much of said realty as is in the state of West Virginia, and that out of the proceeds thereof it may be first paid the amount of said certificates, with interest. The following are by stipuLation admitted to be facts: (1) That on the faith of the orders of December 13, 1883, and March mentioned in the inten'ening petition, and in consideration of receiyer's certificates simultaneously delivered to it by said Sharp, the Company paid to said Sharp, receiver, the sums stated upon the days stated in the intervening petition; the receiver's certifiqates heing in form as shown therein. .(2), 'rh\tt none of the money so as aforesaid paid to said Sharp by the Company was used for the purposes specified in said order 9fDecem1?er 13, 1883, odor any other purposes ofsaid receivership, or for the benefit of the property held therein or of the parties to said cause., ' ,' :, (3) neither ,the purchasers, nor their grantee, nor the Kanawha & ,9hj9Railway Company, nor the complainant herein, knew of the of said certificates until September, 1887; and that the Adams pOpjpa.ny never demanded oftb;eKanawha & Ohio Railway Compll-nr ;<j?aYqJent of said certificates, nor l:lverin anyway, until the filing of iW, petition herein, sought to enforce the alleged lien which it now asserts. Said certific(ltes have been paid, nor the money rep· . Jt ,is, 1obJected that the certificates, having been issued upon orders notice to parties interestedj,are not entitled to recognition ,because the cou;rt in West Virginia has not, after notice and themjciting Union Trust Co. v. Illinois M. Ry. Co., 117U, S. 476, 6!3up. Ct. Rep. 809. It is urged that in legal effect thrse cei'tificates have been by that court, because it directed a. for the determination of all claims against its receiver, and tpe report qf the referee was .approved and embpdied in the final deqree. of June, 1886, and that thus court in effect adjudged that nothing ,should be paid on these certificates. The objection will be Qverruled. The holding in Union Trust 00. v. illinois M. Ry. Co. was ;r@ceiver and thoseJending money to him on certificates issued qnorpers rpade without prior notice to parties interested, "take the risk oJ action of the court in regard to the loans." .So they do, but the aside; and it has not been set I\sidtt. As to the sQggestion that. the referenpe and the confirmation, of the report of the amounted to an adjudication against these certificates, it is only the facts that petitioner had no notice of the reference, and did not appear, and that its claim was not presented or considered, 8Jl0; cite the old case of Ravee v. Farmer, 4 Term R. 146, and the stm older c!l!!e of Golightly v. Jellicoe, Hit 9 Geo. 3 B. R. ,refarred to in tJIe note to Ravee v. Farmer. The certificates in question ,were issued aq; declared that they should be a first and para:-

MERCANTILE TRUST CO. 'II. KANAWHA" O. RY. CO.

87'1

mount lien on so much of the property of the Ohio Central Railroad Company as was then in the possession of the receiver, or as might thereafter come into his possession. The court had jurisdiction over the parties and possession of the res, .and the certificates were ordered for a purpose authorized by law. Under the order of the court they became a valid first lien upon the railroad. Wallace v. Loomis, 97 U. S. 146, 162; Union Trust 00. v. Illinois M. Ry. Co., 117 U. S. 434,6 Sup. Ct. Rep. 809; Vilas v. Page, 106 N. Y. 439, 451,452, 13 N. E. Rep. 743. The certificates were delivered by the receiver to the petitioner contemporaneously wi.th the payment by the petitionel' to the receiver of their par value. The fact that the receiver appropriated the money is immaterial. Union Tr'ust Co. v. Illinois M. Ry. 00., supra. There is no showing of any facts sufficient to put the petitioner on inquiry. It is a joint-stock company organized under the laws of the state of New York. It had no notice of the proceedings in the United States conrt in West Virginia to foreclose the mortgage, and the court had no notice of the issuing ofthe certificates. Wood v. Oarpenter, 101 U. S. 135, 143, and Jesup v. Railroad Co., 43 Fed. Rep. 503, cited by :Counsel for the complainant, do not apply. In each of those cases the found that complainant had knowledge of facts sufficient to put himon inquiry. The only question in the case, therefore, is whether the lien has been discharged. ,The real suggestion of the complainant is that by virtue of the sale and transfer of the railroad property the lien was transferred from the property to the fund. Had the purchaser been a party to the suit, or an independent party, and paid the purchase money in cash, it might well be daimed that the lien was transferred to the fund. But it appears from the record of the decree and proceedings of sale that the purchase was made by a reorganization committee .of the Qondholders, who paid in only money enough to meet the costs :and other expenses of the case, and for the residue turned in bonds. Under the decree of confirmation the conveyance was directed to be made, and was made, expressly subject to the payment of any sums which the court might thereMter direct to be paid in cash on account of the purchase money. and a vendor's lien was ordered to be reserved in the deed upon the property and premises conveyed for the security of such payment, with the right to resell if such payment should not be .made within 30 days aJter an order of court directing it. These provisions of the decree were incorporated by recital in the deed to the purchaser, and subsequently in the deed made by the purchasing com mittee to the Kanawha & Ohio Raihvay Company. It follows logically :and necessarily that the lien. which would have been transfE'l'red to the furid had the purchaser paid in money for the property, was preserved against the property itself, the recital's in the deed having all the force of ·covenants running with the lllnd, and' binding upon anyone who should ':acquire the title. The precise point was adjudicated in Vila8 v. Page, 106 N. Y. 439, 13 N. E. Rep. US. ANDREWS, J., at page 454, lQ6 N. Y., and page 747, 13 N. E. Rep., says:

878

I,

DVlmA.I. 'REPQBTER,

voL 50.

,.,' ,,'t.,

"IUbJl tml'chRs8TS,!l.1) th/.! whetl:\er ortbirll ,bad paid" t,he, :,P,U e mOD, Q,a"slf.,orst\pured its payment. there w,QuId, we tlle lien wooI(J be transferred to the proceeds. cpncei va. be, Ilo ,dOll bt 1'herewould,then be for the thing sold, upon which the lien would attach, relieving tile land in the Ilands of the purchasl'rs. But it could not 'have' bf'en the iutllntion ,of the court to make a constructive paylhent,'oll apufchase by the 'mortgagees; through a cancellation of the ru,ortgagedebt,l'qulvalent to an actual payment, so as to I'l'liev!l the propl'r,ty the Such a !it'n would be illusory merely, haVing no substantIal The purchasers cannot claim to have the premises purchased discharged from the lien. " the power to enforce the' lien. A portion of the line oith e railroad sold is within, its territorial juriscliction, and proceedings to those conduCted: in the United States circuit court in and lor WeJ;ltVirgillia were,conduetedbere. In Swann v. Clark, 110 U. S. Sup. Ct. the lien of receiver's certificates was enforced ill aq suit. , ' . . . has not beeq guilty of The rece1':er's certificates call, loana, and the petitIOner had the right to assume thHthe receiver, the c,ourt's olHcer, would noti(y it when the loan was the OlOl1ey paid. ' .. The decree will be in favor of the petitionl.'r for a hen, pnor to th,e ItoJl)plainant's mortgage anll to any claims against the Kanawha ,COUlVUUy, 1'01' th.'eamount of t4e certUicatlls, with intllflll:lt and costs.

DU;UTl'!

"'tni

STORAGE

&

FonWABDING

Co. et al. ".

PRENTICE.

(Cof1'Cutt Court, D. MInnesota, TMrd

DBBD-DESCRIPTION-FLoAT, '

m",tsWlt. June 20, 1892.)

,A described the IQ.nd IlORveyed as beginning at a certain rock and running thence one mile east, one mllenortb, one mile west, and one mile south, to place of beginning; and also stated that it was tbe land set of! to a certain indian under a treatYW;i\p :the governwent. 'rbe Indian had freVioQ.sly selected bls land as "a tractol!llm\!e square, tblil exact boundaries 0 which may he defined when the 'Aftel',tlie deed Was given, the Indian'sland'waslocated and patented. !lo atl.; ito J'Qur distinct' but adjacent no part of wbich lay within.tbe b,oundaries name,d in the deed. Held, that the deed was not a float, but attached to tbe described tRuds, and in the absence of mistake could not be conlltrUed to pasat.lt,le to anV of the patented lands.

In Equity, Bill toeatablish title ,to lands. Decree for complainantEl· . Statelllent:by N EI,soN,Diiltrict JUdge: This llction, was begun in April, by the D\lluth Storage & ForCompany altd the Duluth Stl,'eet Railway Company on their :own hllhalf, and also on behalf or /l.U similarly situated with reference to thesubjeot of; !the acti<m who might thHrealter cOme in and be join,tID as varties thereto. The lands, or which, those are a part, were vstented in severalty, and in .four distinct but adjacent