There can be no doubt of the general rule, that the question of amendment, in every proper case, in a court of equity, is not limited by the discretion of the chancellor, but is a matter of legal right, so long as the proposed amendment does not work an entire change of the parties, or introduce a radical departure from the case made by the origi
The statute provides, among other things, that “amendments to bills must be allowed, at any time before final decree, by striking out or adding new parties, or to meet any state of evidence which will authorize relief;” and if such amendment be allowed at the hearing, “the party against whom the amendment is allowed shall be entitled to a continuance, as a matter of right; and if the cause is continued, both parties shall have the right to take additional testimony.” — Code, 1876, § 3790.
This section of the Code can not, in our opinion, be construed to authorize as matter of right, in every case, the introduction of parties who have acquired by purchase, or voluntary assignment pendente lite, an interest in the subject-matter of litigation. It must be construed in the light of the established rules of chancery practice, which are in harmony with the known purpose of its enactment. One of these prevailing and necessary rules is, that courts of equity are never compelled to take notice of such assignments of interest as result from the voluntary act of parties, as distinguished from mere assignments by operation of law, — as in cases of death, bankruptcy, and the like. The two classes of cases are clearly distinguishable on the soundest principle, both in the light of reason and authority. Whoever purchases property pendente lite, takes it subject to the hazards of the pending litigation. The decree against the parties litigant is equally binding on all such purchasers. The unanswerable reason of the rule is, that otherwise chancery suits would be absolutely interminable, at the mere option of the litigants, who would be able, by collusion or otherwise, to protract litigation forever, by the single device of repeated and successive transfers from one to another.—Cook v. Mancius, 5 Johns. Ch. 89; Story’s Eq. Pl. § 156; Barbour on Parties, p. 361; Bishop of Winchester v. Paine, 11 Ves. 194; Peevey v. Cabaniss, 70 Ala. 253. In Sedgwick v. Cleveland, 7 Paige, 287, where this principle was announced, it was observed by Walworth, Oh., that “the assignee who is á mere voluntary purchaser, pendente lite, can not defeat the complainant’s rights, or delay his proceedings by such purchase; for, if he could do so,” he added, “the litigation by successive assignments might, be rendered interminable.”
It can not be supposed that the General Assembly, in the enactment of our statute of amendments, designed the repeal of so salutary a rule, the effect of which would be to destroy the most vital function of the judicial tribunals of the country, which is to administer right and justice, obediently to the mandate of the constitution, “without sale, denial or delay.”
The rule in question necessarily embraces the case of trus
We hold, therefore, that a purchaser, or voluntary assignee, pendente lite, from a defendant in the cause, is not a necessary party, and only becomes a proper party defendant by the sanction of the Chancery Court, when it is proposed to introduce him by amendment of the pleadings, and objection is interposed by the complainant, or other party whose rights may be prejudiced by delay of the proceedings.
Applying this principle, we see no error in the refusal of the court to allow the amendments proposed to the cross-bill of Morton, Bliss, and others. These amendments were each proposed and rejected as a whole, and each embraced the introduction of John Tucker, and the Cincinnati, Selma, and Mobile Railway Compan}7, as parties defendant. Both of these suggested parties had become interested in the subject-matter of the suit after the filing of the bill, and must be bound by the decree in the cause just as if they had originally been made parties. Tucker was appointed trustee by the directors of the defendant corporation, upon the removal by them of the Union Trust Company, without the approval of the court; and the Cincinnati, Selma and Mobile Railway Company also acquired its lease pendente lite. The proposed amendments were vitiated
Nor do we discover any error in the conclusion attained by the chancellor as to the status of Morton & Bliss, in reference to the bonds held by them. It is no where denied that they received these bonds for a large debt due them by DuPuy, for iron furnished to equip the first twenty miles of the road. They sold the iron to DuPuy for this express purpose, and none other, and the fact is so declared in a written contract between the parties, bearing date June 8th, 1870. They are, therefore, conclusively charged with a knowledge of the fact. The appropriation of the bonds to this purpose, so far as the State of Alabama was concerned, was in direct violation of the statute, because, as observed by Brioicell, C. J., when the canse was last before us for decision, it was “a diversion of the bonds from the uses and purposes to which they were by the statute appropriated, and to which the company, by the very act of procuring and accepting the indorsement, agreed they should be solely and exclusively appropriated.”—Gilman, Sons & Co. v. New Orleans and Selma R. R. Co., 72 Ala. 580, supra.
The court is of opinion that Morton & Bliss must be charged with notice of DuPuy’s illegal use of these bonds, and that, for this reason, they can not be considered as bona fide purchasers of them for value without notice. The law under which they were issued required the railroad company to construct the first twenty miles of the road exclusively out of its own resources, and independent of State aid, as an indispensable condition to the indorsement of its bonds by the State; and any expense incurred in building such portion of the road is also prohibited from being refunded, in whole or in part, from the proceeds of the bonds indorsed by the State.—Acts 1869-70, p. 152; Gilman, Sons & Co. v. N. O. & S. R. R. Co., supra. This is a sweeping prohibition, of plain meaning and purpose.
The bonds themselves make special reference to this statute, under which they were indorsed and issued ; and it is not de
The claimants knew that their demand against DnPuy was incurred for materials sold by them to aid in building the first twenty miles of the road. They knew that the laws of Alabama forbid the bonds of the road being used for this purpose ; and they must have known, therefore, that prima facie they were participating in the violation of the law, when they accepted these securities, thus indorsed by the State, in payment of their debt against DuPuy. It was their duty to make inquiry as to the true state of facts, and, had they done so, such inquiry would have disclosed the information that the work on the road had been abandoned after the construction of the first twenty miles. It was entirely immaterial that the Governor of Alabama had required the proof to be made, as provided for by statute, that the portion of the road already constructed had been built from other resources of the company, independent of the aid derived from, the State, or that he had indorsed the bonds in the name of the State on the faith of this evidence. The use made of the bonds was prohibited by the statute, without any mention of the time when it might be done. A misappropriation after such proof was made to the Governor was just as unlawful as it would have been before such executive action. Morton & Bliss can not claim to have been misled by this act of the Governor, in view of the knowledge imputed to them by the facts of this case. They acquired only the right of DuPuy, and received the bonds subject to all the equities attaching to them in his hands.
The chancellor properly decreed that the lien of the mortgage, or deed of trust, executed by the railroad company to. the Union Trust Company, of New York, enured to the benefit of Morton & Bliss equally with the other holders of all the 320 bonds issued by the company and indorsed by the State. But such lien is subordinate to that created by the statute in favor of the State, to which all parties are entitled to be subrogated who are shown to be bona fide purchasers for value before maturity, and without notice of existing defenses against the original holder. This mortgage was duly recorded, and this charged the complainant, Robertson, with notice of its existence. The lien of the complainant’s judgments described in the original bill were properly, therefore, decreed by the chancellor to be subject to these superior incumbrances.—Kelly v. Trustees, 58 Ala. 489; Colt v. Barnes, 64 Ala. 108.
While these principles of chancery practice are admitted by counsel, their logical consequences are nevertheless denied. ít can scarcely be contended that the register committed any error in refusing to permit Seligman and others to re-try before him the issues settled by the decree of reference. But, as we understand the argument, the objection is, that the chancellor rendered a decree in which he undertook to settle any equity before all the creditors had been brought before the court by proof of their claims. There is no complaint of any refusal on the chancellor’s part to correct any alleged error in his decree, upon the evidence before him at the time of its rendition. The objection urged, it will be seen at a glance, assails the right of the chancellor to render any final decree, settling the equities of a class, until after a reference has been made to the register, and all persons interested, however numerous, have appeared in court by making proof of their claims. A sufficient answer to this position is, that the contrary practice is settled in this State, on a basis too solid and ancient to be disturbed at
One of the equities involved in the present case, and raised by the pleadings, was, whether Gilman, Sons & Co. were Iona fide holders of the bonds claimed by them, and purchasers of the paper for value before maturity, and without notice. This issue was fairly litigated between the complainant as a judgment creditor, and with Morton & Bliss and others as representing the other bondholders secured by the deed of trust, whose interest it was to defeat the priority thus claimed by and adjudged in favor of Gilman, Sons & Go. If one of the other bondholders, who afterwards might appear before the register and make proof of his claim under the decree, could introduce new evidence, and thus re-open the ease on the reference, why may not every other bondholder and judgment creditor do the same? And, if each can do so successively, as they are permitted to come in, when is the litigation to cease in the given cause? It is not to be lost sight of that, in the case of stock companies, and large corporations whose capital stock is now often valued at millions of dollars, the number of litigants will not improbably be numbered by thousands. If the Chancery Court in such cases be prevented from rendering a decree which would preclude the right of perpetual litigation, the utility of the rule allowing a single creditor to represent the class to which he belongs, would be defeated, and especially would its main purpose of saving expense and delay be practically frustrated. It has often been objected before, that this rule operates unjustly against all parties not before the court when the decree was rendered ; but to this objection it may be answered, that “it is better to go as far as possible towards justice, than to deny it altogether.”—Cockburn v. Thompson, 16 Ves. 328, 329.
It is certainly true that the only holder to whom the law merchant accords full protection is thebona fide purchaser for value, without notice, and before maturity. Purchasers of bonds, and other commercial paper past-due, take only the right and title of their immediate vendors.—Texas v. White, 7 Wall. 700; Fenouille v. Hamilton, 35 Ala. 319.
There seems to be no difference of opinion on the proposition, that where the principal of the bond or bill is payable in installments, the paper becomes dishonored by a failure to pay any one installment, which is overdue.—1 Danl. Neg. Instr. § 787; Vinton v. King, 1 Allen, 562.
But, according to the weight of authority, in our opinion, this rule is not strictly applicable to a failure to pay interest. Some courts, it is true, have repudiated this distinction, and have held, with much reason, that the payment of interest stands on precisely the same footing as the payment of the principal, and that the failure to pay either dishonors the paper.—Nevell v. Gregg, 51 Barb. 263; First Nat. Bank of St. Paul v. County Comm’rs, 14 Minn. 77. But this does not seem to be the view generally adopted, especially as applicable to coupon bonds, which may be regarded as an invention of modern commerce, and have recently become so common a subject of merchandise in the stock markets of the commercial world.
In Boss v. Howit, 15 Wis. 260, decided by the Supreme Court of Wisconsin in the year 1882, it was held that the maturity of a note, within the meaning of the law-merchant, is the time when the principal falls due, and that the interest being due when one comes into the possession of commercial paper by purchase, does not make him a purchaser after maturity, so as to let in defenses that might have been made as between the original parties. This view was subsequently affirmed by the same court in the case of Kelley v. Whitney, 40 Wis. 110; s. c., 30 Amer. Rep. 697.
In Brooks v. Mitchell, 9 M. & W. 14, where a promissory note, payable on demand, had been indorsed several years after date, and no interest had been paid on it for three years before such transfer, it was held not to be dishonored as overdue by reason of this fact, in the hands of a holder otherwise without notice of any existing defense or infirmity of title. In this case it was observed by Baron Parke, that “ a promissory note, payable on demand, is intended to be a continuing security.”
In National Bank v. Kirby, 108 Mass. 497, the court declined
The same doctrine has been approved by the Supreme Court of the United States, in many decisions, especially as applicable to coupon bonds. In Cromwell v. County of Sac, 96 U. S. 51, it was decided,*that the mere fact of one installment of interest being overdue and unpaid, disconnected from other facts, was insufficient to affect the position of one who was otherwise a bpna fide purchaser of coupon bonds for a valuable .consideration. “The interest stipulated,” said Mr. Justice Field in this case, “ was a mei’e incident to the debt. The holder of the bond had his option to insist 'upon its payment when due, or to allow it to run until the maturity of the bond — that is, until the principal was payable.” The court further said: “To hold otherwise, would throw discredit upon a large class of securities issued by municipal and private corporations, having years to run, with interest payable annually or semi-annually. Temporary financial pressure, the falling off of expected revenues or income, and many other causes having no connection with the original validity of such instruments, have heretofore, in many instances, prevented a punctual payment of every installment of interest on them as it matured; and similar causes may be expected to prevent a punctual payment of interest in many cases hereafter. To hold that a failure to meet the interest as it matures renders them, though they may have years to run, and all subsequent coupons, dishonored paper, subject to all defenses good against the original holders, would greatly impair the currency and credit of such securities, and correspondingly diminish their value.”
The doctrine of this case was approved in Railway Co. v. Sprague, 103 U. S. 756, where it was held, that the presence
In Thompson v. Perrine, 106 U. S. 587, where the contention was that conpons, which were detached from the bonds, and overdue when purchased by the plaintiff, were dishonored, and therefore not negotiable by the law-merchant, the court refused to sustain the point, and held that, the bonds not having matured at the time of the purchase, the coupons, though overdue, had not lost the quality of negotiability.
In Morgan v. United States, 118 U. S. 476, 501, after a full review of the previous decisions, and a recognition of the principle, that a demand must be made in a reasonable time for paper payable on demand, as conpons usually are, the rule in question was again approved, with the assertion, that any holder of a coupon bond “had a right, without prejudice except as to the loss of interest, to wait without demand for the whole period at the expiration of which the bond was unconditionally payable.”
In Plock & Co. v. Cobb, 64 Ala. 127, 158, the following language was used by this court: “ The dishonor of the unpaid coupons for interest did not infect with dishonor the bond or other coupons, putting on inquiry those who in the usual course of trade, in good faith, and upon a valuable consideration, should acquire them.”— See Jones on Railroad Securities, § 199 ; Danl. on Negotiable Instr., § 1506 a; Colebrooke on Collateral Secur., § 46.
We adopt the rule announced in Railway Co. v. Sprague, 103 U. S. 756, among other reasons, because of its simplicity and certainty. If a failure to punctually present coupons attached to such bonds, now so rapidly increasing as a part of the vast circulating capital of the country, is to operate to dishonor them on their face as matter of law, the question may arise as to how many coupons will be required to have this vitiating effect. Shall the courts name a dozen, or a score ?
The opposite rule, which is contended for by the learned counsel with such ability and earnestness, would not necessarily operate to protect the makers of dishonored paper, who have just defenses, because of the facility with which holders could remove overdue coupons before putting them on the market. It might rather tempt to the frequent commission of fraud, by clipping such coupons from the bonds prior to selling them.
It is obvious, moreover, that great inconvenience, if n.ot injustice, would result, in having one rule prevailing in the Federal courts, and another in the State courts, affecting the title of commercial paper. Litigants who were non-resident would resort to the Federal courts to sue on such paper, where ample security would thus be afforded their titles. The State courts would deny this protection to resident citizens, under precisely the same state of circumstance's. What was justice in one court would thereby be adjudged to be injustice in the other. Commerce, on the other hand, is broad and expansive, and is growing more so with the progress of civilization, and with every new discovery of modern art and science. Uniform rules, therefore, are desirable, which, being based on liberal and comprehensive principles of public policy, will be recognized as of force in every commercial.centre, where its currents are permitted to ebb and flow freely and without restriction.
There is, however, one aspect in which, according to all the authorities, the presence of overdue coupons upon such bonds is material and important. While not conclusive of the fact of dishonor, “ it is still a fact proper to be considered by the jury, in connection with other circumstances, on the question whether the holder is entitled to the position of one who has taken it in good faith, and without actual or constructive, notice of existing defenses.”—National Bank v. Kirby, 108 Mass. 497. It goes, in other words, to the question of good or bad faith, because it may often tend to show that the purchaser had notice, actual or constructive, of the fact of dishonor. Taken
We have said that every holder of these indorsed bonds must be presumed to have knowledge of the laws of Alabama by authority of which they were created and put in circulation. Morgan v. United States, 103 U. S. 477. The bonds themselves make reference to the act of February 21st, 1870, and
It is true, as asserted in argument, that all of the litigants admit in the pleadings that there was such a demand and refusal to pay, and that thereby the principal of the bonds became due in the year 1812, as well as the entire interest; but this is not an admission that they knew this to be true at the time of their respective purchases, — a fact'which is negatived by an express denial of all notice. When it was shown that a fraudulent use had been made of the bonds, the burden was on the holders to show that they were bona fide purchasers for value in due course of trade. This proof being made, the burden was again shifted on those assailing the validity of the bonds to prove notice to the purchaser of any alleged defect in the title of the transferror. The fact of such notice has reference to the time of the purchase, and not afterwards; and time is,
It is further contended that such of the bond holders as purchased after March 17th, 1875, were charged with notice of the fact that the bonds had been dishonored from refusal to pay, because on that day the General Assembly of Alabama in effect repudiated the liability of the State, as indorser of the bonds, by repealing the act of February 21st, 1870, under which the indorsement was made, and by which provision was made for their future payment by the State, in the event of a default of payment by the railroad company as maker. — Acts 1874-75, p. 269. This being a public law, a knowledge of which was imputable to every holder of these bonds; the law repealing it was equally so, and was a fact of which no holder had a right to be ignorant. There was no other manner in which the.State could constitutionally and authoritatively declare its status and purposes on the subject, than by speaking through a public law. The effect of this repealing law was to withdraw from every State official all authority to proceed under the abrogated law to make payment of the bonds in any event. It was alone by virtue of the provisions of this law that the Governor was authorized to negotiate temporary loans, if needed, to pay the interest on them. It was by a like authority, and that only, that the Auditor of the State was empowered to draw his warrant upon the treasury of the State, for the purpose of paying such interest, in the event of a failure of the railroad company to make provisions for its prompt payment. — Acts 1869-70, sec. 4, p. 153. The. constitution and laws of the State provide, in plain terms, that no money shall be paid out of the treasury except upon appropriation made by law, and on warrant drawn in pursuance therof by the proper officer, who is designated, eonomine, tobe the Auditor. — Const. 1875, Art. IY, § 33; Code, 1876, §§85, 187. Whether this repealing act was strictly an open repudiation by the State of its liability as indorser of these bonds, such as to dishonor them ipsofaeto, we need not decide. It was certainly a significant circumstance, sufficient to put the purchaser'on inquiry, and charge him with notice of the fact that there was something wrong about the bonds ; especially when taken in connection with the other fact, that, at the time of such repeal, several
In applying the foregoing principles, we need not enter into any protracted discussion of the testimony. The chancellor, in our opinion, has properly found that J. & W. Seligman & Co. were bona fide purchasers for value, and before maturity, of the forty-seven bonds held by them, without notice of any existing infirmity of title. The evidence is, in our minds, satisfactory to show that they became purchasers of these bonds prior to March 17th, 1875, when the act of February 21st, 1870, was repealed. The fact of the coupons for four years being overdue and unpaid, was not alone sufficient to impute bad faith to the holders in their failure to make inquiry as to the real status of these bonds ; nor was the fact sufficient to dishonor the paper, when taken in connection with the other facts of the case known at the time to such purchasers.
Perkins, Livingston & Post are shown to have purchased their two bonds in April, or May, of the year 1877, and, therefore, after March 17th, 1875. Eleven coupons were then overdue upon them. The chancellor erred in decreeing that they were bona fide purchasers for value without notice.
lie likewise erred, under the foregoing principles, in holding W. S. Nickols to be entitled to protection as an innocent purchaser of the ten bonds bought by him imFebruary,'1883, for which he paid only twenty cents on the dollar. '
The same we hold to he true as to his finding as to^the fifty bonds owned by A. W. Jones and his associates, and purchased in 1884 from Levy, who himself bought from Barlow' after February, 1880. It needs no argument to show' that Barlow, as Crawford’s administrator, held no better title than Dupuy ; and we have shown that, in his hands, all of these bonds were subject to existing equities in favor of the State.
The above named parties, not being bona fide purchasers for value, in due course of trade, without notice, are not entitled to be subrogated to the statutory lien of the State as indorser of these bonds. But they will be allowed to come in subordinated with the other creditors, in like condition as being secured by the mortgage, or deed of trust executed by the defendant corporation to the Union Trust Company of N. T.
We find no other errors in the decree of the chancellor.
The decree will be reversed, and a decree rendered in this court, in substance the same as that rendered by the chancellor, except as to the errors above pointed, out.
The costs of the case in this court, and in the court below, so far as they remain unpaid, will be paid out of the proceeds of the sale of the road, its franchises and other property, included in the deed of trust and prayed to be sold,
An application is made in this cause, by the attorneys of Morton & Bliss, for the allowance to them of counsel fees, to be paid out of the general fund which may accrue from the sale of the property, which is declared to be subject to the lien of the mortgage described in the pleadings. A like application is also made in behalf of the counsel for the complainant in the original bill, who sues as a judgment-creditor of the defendant railroad company.
We are also asked to modify the decree, so as to allow to Seligman & Co. the right to prove for the full amount of the forty-seven bonds held by them as collateral security, and to permit them to retain so much of the proceeds of these bonds as they may recover, not in excess of the debt for the security of which the bonds were received.
We propose to first consider the questions involved in the last suggestion.
The pledgee of negotiable paper, who is a bona fide holder for value, and before maturity, is practically the owner of such paper, and is entitled to be protected to the extent of his debt, as fully as if he were the owner, He may, ordinarily, sue on such collaterals in his own name, and, in the absence of any defense, is entitled to recover for their full amount. From the sum thus recovered he can rightfully deduct his debt, with interest and costs, and the surplus he holds as trustee for the pledgor.—Jones on Pledges, §§ 89, 669-670; Colbrooke on Collat. Sec., §§ 85, 87, 90, 143; Tooke v. Newman, 75 Ill. 215.
Where the negotiable paper, which is thus pledged, is without consideration, or is subject to prior equities, or has been fraudulently misappropriated, the pledgee, if a bona fide holder for value before maturity, may nevertheless prove or sue for the entire amount of the collaterals, but can recover no sui’plus over and above the amount of his debt or advances, with proper costs of suit. He is the pledgee of the entire debt or demand represented by the collateral transferred to him, and not of a mere fractional part of it. The primary purpose of the pledge was to place in his hands the means of paying his debt. If he is permitted to prove'only for an undivided or fractional part, it must be upon the theory that he is the transferree of an interest less than the whole. The true intention
In Stoddard v. Kimball, 6 Cush. 469, the plaintiff sued as pledgee of a negotiable note, which had been transferred to him as collateral security for a debt less in amount. The transfer or pledge was made in fraud of the indorser and other parties to the paper. The facts showing him to be a bona fide purchaser before maturity, it was held that he could recover so much of the note as would satisfy his claim for which it was pledged as security. Siiaw, O. J., said:. “It being obvious that the plaintiff can recover nothing as trustee for the party frjm whom he received it (i. e., the collateral), he is liable over to nobody for the surplus, and therefore can have judgment only for the amount due to himself, for his own use, and in his own right, which is so much of the note as may be necessary to satisfy the balance of the debt, for the security of which lie received it.”
In Chicopee Bank v. Chapin, 8 Metc. (Mass.) 40, a like ruling was made, the plaintiffs being held entitled to recover “to the amount of the note, for which they took the note in suit as collateral security.”
In Duncomb v. New York R. R. Co., 84 N. Y. 190, where a railroad mortgage had been foreclosed by trustees, and numerous pledgees of bonds appeared, holding them as collateral security for debts due from third persons, they were allowed to prove for the full amount of these bonds; but their recovery was limited to the amount of the claims for the security of which they respectively held these collaterals. This ruling of the referee was approved by the court, without so much as questioning its correctness.—See, also, Williams v. Smith, 2 Hill (N. Y.), 301; Allaire v. Hartshorn, 21 N. J. L. 663; Colbrooke on Collat. Sec., §§ 78, 92; Jones on Pledges, § 674.
In England, the more recent rule in bankruptcy, based on general principles of equity, is to permit the holders of collateral securities, who are bona fide purchasers for value, to prove for the whole amount of such collaterals, with this limitation only, that they can not receive dividends in excess of the debt for the security of which such collaterals are held. And this rule applies where the paper pledged has been fraudulently issued, or is otherwise without consideration.—Ex parte Newton, 16 (L. R.) Chan. Div. 330 (1880-81); In re Gomersall 1 (L. R.)
If this were not the rule, the absurd result would follow, that one pledgee, who holds one hundred bonds, of one thousand dollars each, for example, would be no better secured than another who holds only one of such bonds, the debt secured being, we will say, one thousand dollars. Can a rule be sound which would produce this strange sequence? Would it comport with the fundamental principles commonly supposed to govern the rights of transferrees of commercial paper, that the purchaser of a hundred bonds will obtain no more of value, nor better indemnity, than the purchaser of one bond of the same kind and denomination, when the very intention of the contracting parties may have been the contrary ? Such is not our view of the law.
These conclusions are not, in Our judgment, affected by the rule of subrogation prevailing in this State.
Under the influence of these principles, it is perfectly clear that Seligman & Go. should be permitted to prove for the entire amount of the collaterals held by them ; but the amount of their recovery can not exceed the debt for the security of which-these collaterals are pledged, with lawful interest added.
The largest preferred claim which has been allowed in the present case is that of Gilman, Sons & Co., who are decreed to be entitled to the lien secured by the statutory mortgage of the State of Alabama. Any fees taxed on the proceeds of sale would probably be largely at their expense. The only other party holding a like priority are Seligman & Co., whose attor
We will modify the decree, however, so as to allow the attorneys of Morton & Bliss to make application to the chancellor for the allowance to them of reasonable counsel fees out of any fund that may be left after paying the costs of suit, and discharging the claims of Gilman, Sons & Co., and that portion of the claim of Seligman & Co., which constitutes a first lien on the property in controversy, in the event that there may be a surplus going to those creditors who hold a second lien under the deed of trust executed to the Union Trust Company, and who come in under the cross-bill of Morton & Bliss and belong to the same class.