Page:Federal Reporter, 1st Series, Volume 1.djvu/374

366 l^DERAL aBPOBXIB. �pledged the revenues and toUs upon which the state had there- tofore a prior lien as between the canal, its stockholders and itself, This suit is to compel the defendant company to fui- fil the obligation it then entered into. It would be a grosa deception on the part of the state to plead that while she waived her lien she never intended to hare the mortgage of the toUs enforced, The state does not set up this defence, but the defendant company seeks to shield itself behind it. In our judgment, the state of Maryland, when it authorized the defendant to deal with the publie under the act of 1844, chapter 281, and to borrow money by the pledge of its toUs and revenues, waiving its lien, said that to the extent of the loan the state had no interest in the property of defend- ant. AU the state'a prior dealings with the defendant were not to be considered. AU the rights were waived, sovereignty and ail, and were subordinated to the contract of the pur- chasers of these bonds with the defendant company. �The purchasers of the bonds dealt with the canal company, the now defendant, and it ought not to be aUowed to set up any interest of the state to defeat the enforcement ol its contract. AU questions of the distribution of the surplus revenues of the canal company have been conclusively de- termined by the state court in the action above alluded to, in whieh the state was a party. The bonds which complainant holds are an undisputed first mortgage debt, having priority over every claim of the state, which lien and priority have been determined by the state courts. If the state bas any interest whatever which it thinks is not here properly defended by the defendant, whom she authorized to deal in her behalf with these bondholders, she is at liberty to come here and in this court protect her rights. But the defendant is not to be aUowed, after making a contract which was authorized by the state, to set up by way of defence against its enforcement that the state is not made a party, and cannot be without the state's consent, and thus defeat the contract. This complainant did not deal with the state. He dealt with the defendant company. It is against it these complainants seek to enforce their elaim, and the defendant, having made a ��� �