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Thompson v. White Water Valley Railroad Company, , to enforce an alleged lien claimed by them upon earnings of a section of the road of the White Water Valley Railroad Company, against the claim to priorty of bondholders secured by an earlier mortgage The White Water Valley Railroad Company was organized as a corporation in 1865, under the laws of Indiana, with authority to locate, construct, and operate a line of railway from Hagerstown, in Wayne county of that state, to the town of Harrison, Dearborn county, on the boundary line between Indiana and Ohio To raise the necessary means to construct the railway, the company issued its coupon bonds to the amount of $1,000,000, in sums of $1,000 each They were dated August 1, 1865, and were to mature the 1st of August, 1890, and draw interest at the rate of 8 per cent per annum, payable semi-annually To secure the payment of the principal and interest of these bonds, the company executed to trustees, by way of mortgage, a deed, bearing date on that day, of its railroad, and all the right of way and land occupied thereby, with the superstructure, and all property, materials, rights, and privileges then or thereafter appertaining to the road, and the benefit of all contracts with other railroad companies then existing, or thereafter to be made, and all property, rights, and interests under the same The deed contained the usual covenants to execute suitable conveyances for the further assurance of property subsequently acquired, and intended to be included in the instrument The company soon afterwards commenced the construction of the road, and by the 4th of November, 1867, completed that part of it which lies between the towns of Harrison and Cambridge City, leaving the distance from the latter place to Hagerstown-between seven and eight miles-unconstructed It was then without the requisite means to equip the part of the road completed, or to undertake the construction of the remaining portion of the road In this condition it entered into a contract of perpetual lease with the Indianapolis, Cincinnati & Lafayette Railroad Company, a corporation then in existence, in consideration of which the latter company agreed to furnish all the necessary equipments, material, and laborers to operate the line of the road then completed, and to construct and put in good and safe running order for the accommodation of the public that part of the line then uncompleted, that is, the section between Cambridge City and Hagerstown, and to pay to the lessor annually the sum of $140,000 in four quarterly payments of $35,000 each The contract referred to the mortgage of $1,000,000 before mentioned, and provided for the payment of the interest thereon out of the rents received, and for the resumption of possession by the lessor if the lessee failed to keep its covenants .
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