is further provided that the defendant, his heirs, executors, administrators or grantees, might, within twelve months from the sale of his lands or tenements under execution, redeem the same by paying to the officer who sold it, for the benefit of the purchaser, the sum of money which may have been paid on the purchase, or the amount given or bid, if purchased by the plaintiff in the execution, together with interest thereon at the rate of ten per centum from the time of sale. Id., sec. 16. The right was given to any judgment creditor, after the expiration of twelve and within fifteen months from the sale, to redeem the property by paying the amount paid by the purchaser,- such payment entitling him to have a resale under the execution upon his own judgment. Id., secs. 17, 18. This right given to judgment creditors could be exercised as to the whole or any part of the lands or tenements sold, provided the redemption is made in the like distinct quantities or parcels in which the same are sold. Id., sec. 19.

If the lands or tenements so sold are not redeemed by the defendant, or by a judgment creditor, within fifteen months from the sale, it is the duty of the officer making it to execute a deed to the purchaser. Id., sec. 25. The provision in reference to redemption from mortgage sales is that, "where lands shall be sold under and by virtue of any decree of a court of equity for the sale of mortgaged lands, it shall be lawful for the mortgagor of such lands, his heirs, executors, administrators or grantees, to redeem the same in the manner prescribed for the redemption of lands sold by virtue of executions issued upon judgments at common law; and judgment creditors may redeem lands sold under any such decree in the same manner as is prescribed for the redemption of lands in like manner sold upon executions upon judgments issued at common law." Id., p. 382, sec. 27. The history of the right of redemption as given by the laws of Illinois may be traced in Statutes of 1825, p. 151; R. S., 1829, p. 85; id., 1833, p. 374; id., 1845, p. 302. When originally conferred as to sales of land under execution, there were no railroads in that state, and very few, if any, when it was first (in 1845) extended to decretal sales of mortgaged lands. $1389. Case cited.

In Brine v. Insurance Co., 96 U. S., 627 (§§ 800-804, supra), we held that the right of redemption given by the Illinois statutes constituted a rule of property which the federal court, sitting in equity in that state, is bound to recognize and enforce. The property there in controversy was a lot of ground in the city of Chicago, which had been owned by a private person, who conveyed it in trust to secure a loan of money by an insurance company. When the mortgage by the Chester & Tamaroa Coal and Railroad Company was made, there was in force a general statute, passed in 1855, conferring upon any railroad company organized or incorporated under the laws of Illinois the power to mortgage all or any portion of its property and franchises to secure the payment of money borrowed to aid in the construction, completion or operation of its road. Gross ed., p. 553; Laws of Ill., 1855, p. 304. And by the state constitution adopted in 1870, railroads thereafter constructed were declared to be public highways, free to all for the transportation of their persons and property thereon, under such regulations as should be prescribed by law. Art. 11, sec. 12. § 1390. Redemption in Illinois of lands of a railroad corporation sold by decree of foreclosure in a federal court, under a mortgage of the railroad with the corporate franchises.

The question is, therefore, presented for the first time in this court, whether the statutory provisions giving the right to redeem as well lands or tenements

sold under execution as mortgaged lands sold under decrees of courts of equity, has any application to the real estate of a railroad corporation, which, with its franchises and personal property, is mortgaged as an entirety to secure the payment of money borrowed for railroad purposes. Undoubtedly in all such cases the chief value of the real estate comes from the right or franchise to hold and use it, in connection with the personal property of the corporation, for railroad purposes. It is equally true, not only that the bonds, to secure which the mortgage is given, could not be negotiated in the markets of the country did not the mortgage embrace as an entirety the franchises and all the real and personal property of the corporation used for railroad purposes, but that a sale of the real estate, franchises and personal property, separately, might, in every case, prove disastrous to all concerned, and defeat the ends for which the corporation was created, with authority to establish and maintain a public highway.

§ 1391.

right of redemption in case of sale of franchise.

It is, nevertheless, contended by counsel that, as the statute attaches to decretal sales of mortgaged lands the right of redemption, that right exists as well in cases of mortgages, covering the entire property and franchises of a railroad corporation, as where the land is owned and used by private persons for exclusively private purposes. In other words,- for to that result the argument would lead, the court, in decreeing the sale of the mortgaged property and franchises of a railroad corporation, has no discretion, if the corporation or its judgment creditors so demand, except to order the sale of the real estate separately, in parcels when susceptible of division, and subject to redemption, leaving the franchises and personal property to be sold absolutely and without redemption. Thus, one person might become the purchaser of the real estate, another of the franchise, and still others of the personal property. If the railroad company should redeem the real estate, it could not employ it to any valuable end; for its franchise to be a corporation and to use its real estate for railroad purposes will have been sold to another, and there is no right under the statute to redeem the franchise, it not being real estate, but rather a power or privilege, partaking more or less of sovereignty, and which may not be exercised without a special grant. 1 Redfield on Law of R'ys, 94. Consequences equally injurious would flow even from the sale, as an entirety, of the real and personal property and franchises of the corporation, if the right was reserved to the company, or its creditors, to redeem the realty. Individuals or associations desiring railroad property would not purchase when they could not know, until the expiration of fifteen months from the confirmation of the sale, whether they were to have all for which they might bid. During that period of uncertainty the property would necessarily depreciate in value for the want of repairs and betterments essential to its preservation. A construction of the statute which leads to such results ought not to be adopted, if it can be avoided. And we think it can be without contravening the spirit of the statute or the public policy which suggested its enactment.

$1392. To what class of real estate the right of redemption attaches.

We are of opinion that mortgaged real estate, to which is attached the right of redemption, is such and such only as could at law be levied upon and sold on execution. The right does not extend to real estate of a public corporation, mortgaged with its franchise to acquire, hold and use property for public purposes, and whose chief value depends upon its being so used and appropriated. The difference between real estate so acquired, held and used, and real estate

which may, at law, be sold under execution, is well illustrated in Gue v. Tide Water Canal Co., 24 How., 257. In that case it appeared that an execution was levied upon a house and lot, sundry canal locks, a wharf-boat and several lots, the property of the canal company, chartered under the laws of Maryland for the construction of a canal from Havre de Grace, in that state, to the Pennsylvania line. The property so levied upon was admitted to be necessary to the uses and working of the canal, which was a public improvement, and a great thoroughfare of trade. It was of little value apart from the franchise to take tolls, and if sold separately under execution, the franchise to take tolls, said Mr. Chief Justice Taney, speaking for the court, would not have passed to the purchaser. It was consequently ruled that the real estate there in controversy could not be seized and sold under fieri facias, and, consistently with the rights of stockholders and creditors, could not be sold separately from the franchise from which was derived its chief value.

The laws of the state of Illinois having permitted the Chester & Tamaroa Coal and Railroad Company to mortgage its franchises and property as an entirety, it was, we think, the duty of the court to decree the sale, as an entirety, of the whole property so mortgaged, without reference to the local statutes upon the subject of redemption. Real estate, thus mortgaged with the franchises of the company, is of necessity relieved from the operation of that statute. There may possibly be cases in which real estate of an ordinary kind, owned and mortgaged by a railroad corporation, cannot be sold by decree of court, except subject to the right of redemption; as when it is not used for necessary railroad purposes, or when it is mortgaged separately from its franchises and other property. What may be the operation of the statute in such cases we do not now decide. All that we do decide is that, by the laws of Illinois, the real estate, franchises and other property of a railroad corporation, mortgaged as an entirety, may be sold as an entirety under the decree of a court of equity, without any right of redemption in the mortgagor or in judgment creditors as to such real estate.

The construction we have given to the statute is not inconsistent with the provision of the state constitution which declares that "the rolling stock and all other movable property belonging to any railroad company or corporation in Illinois shall be considered personal property, and shall be liable to execution and sale in the same manner as personal property of individuals; and the general assembly shall pass no law exempting any such property from execution and sale." Art. 11, sec. 10. When the mortgage of April 12, 1871, was executed there was no levy upon the movable property of the company, and consequently the rights of the mortgagee were superior to the lien arising from a subsequent levy, by execution, upon the movable property. The state constitution did not forbid the creation, by mortgage, of such superior lien. So far from that section militating against the construction we have given the statute, it rather forti fies it. It furnishes a strong implication that the right to levy an execution upon the movable property of a railroad corporation was intended to be restricted to that kind of corporate property. It is a partial modification of the general rule that the property of a railroad corporation, used for necessary railroad purposes, cannot be seized and sold under an execution at law.

§ 1393. The chattel mortgage law of Illinois is not applicable to an ordinary railway mortgage.

The next question to be considered relates to the distribution of the proceeds of the sale of the mortgaged property. The argument upon this branch of

the case, in behalf of the appellants, briefly stated, is this: That by the laws of the state in force when the mortgage of April 12, 1871, was executed, a mortgage of personal property, certified by a justice of the peace in the justice's district in which the mortgagor resides, and recorded in the recorder's office of the county where the mortgagor resides, shall, "if bona fide, be good and valid from the time it is so recorded, for a space of not exceeding two years, notwithstanding the property mortgaged or conveyed by deed of trust may be left in possession of the mortgagor, provided that such conveyance shall provide for the possession of the property so to remain with the mortgagor" (Gross ed., 1869, p. 67); that more than two years having expired after the execution of the mortgage of April 12, 1871, and before the suit for foreclosure,― the property mortgaged remaining in the possession of the railroad company until seized in Hammock's suit,- the judgment creditors, by virtue of their suit in the state court, acquired a lien, at least upon the rolling stock and other movable property covered by the mortgage, superior to any claim on the part of the mortgagee and those it represented; and that since the personal property was surrendered and the proceeds of its sale applied in discharge of taxes upon the real and personal property and capital stock of the corporation, the court upon principles of equity should have appropriated to the judgment creditors so much of the proceeds of the decretal sale as was equal to the taxes on real estate paid from the proceeds of the sale of personal property by the collectors.

We are of opinion that the statutory provisions in regard to chattel mortgages (Gross ed., p. 66) do not embrace mortgages by a railroad corporation, in connection with its real estate and franchises, of its personal property used and appropriated for railroad purposes. The statute provides a mode by which possession of the mortgagor of personal property should not defeat the mortgage, viz., the acknowledgment and record of the mortgage. The acknowledg ment is required to be made before a justice of the justice's district in which the mortgagor resides, and recorded in the recorder's office of the county where he resides. These directions are wholly inapplicable to a railroad company, whose line of road might pass through several justices' districts and extend through several counties. And, if the construction contended for be sound, a railway mortgage security, so far as the personalty of the corporation is concerned, would cease to be of any value after the expiration of two years from its execution, unless the mortgagor, before the expiration of that time, takes possession of it, the authority to do which, in advance of the maturity of the mortgage debt, and when there has been no default of the corporation in meeting its interest, would render the negotiation of the mortgage bonds difficult if not impossible. Clearly the chattel mortgage statute has nothing to do with the present case.

What we have said renders it unnecessary to consider the other branches of the proposition last stated, and disposes of all questions of importance upon the merits, arising on the appeal from the final decree ordering a sale of the mortgaged property, and directing a disposition of the proceeds arising therefrom. We have seen that the Farmers' Loan and Trust Company, in vacation, filed in the clerk's office of the state court a petition to be made a party to the creditor's suit of Hammock, with an answer and cross-bill, and also a petition for the removal of that suit into the federal court, accompanied by the required bond; and that the judge of the state court, in vacation, declined to act upon the petition to be made a party, or to recognize the right of removal. Whether

the cause was, under these circumstances, properly docketed in the court below as one legally removed under the act of congress, or whether the federal court exceeded its authority in the final order of injunction, made on the 17th day of January, 1879, upon the petition of the Wabash, Chester & Western Railroad Company, are questions about which there is a difference of views among those members of the court who heard the cause and participated in its decis ion. We, therefore, forbear to make any expression of opinion upon them. And it is not at all important to the parties that we should do so. The object of the suit in the state court was to reach the property of the railroad company, and from it, or from the income to be derived therefrom, obtain satisfaction of the judgments against the corporation. Whether that suit was or not, under the act of congress, legally removed into the federal court, the entire property, we have seen, passed lawfully into the custody of the latter court, and by proceedings therein, to which the judgment creditors were parties, and by which they are concluded, it has been all sold, and the proceeds adjudged to be rightfully distributed in satisfaction of the mortgage debt. It would, consequently, serve no valuable purpose for the appellants, were it now decided that the suit commenced in the state court was not legally removed into the federal court, or that the order of January 17, 1879, was beyond the power of that court to make. The decrees appealed from are therefore affirmed.

§ 1394. Extension of payment of interest.- Where there is no specified time mentioned in an agreement to extend the payment of interest under a mortgage no definite extension can be claimed. But the mortgagor is entitled to reasonable notice of the termination of an indefinite extension of the time to pay the interest. Union Trust Co. v. Railroad Co.,* 5 Dill., 1.

§ 1395. There is no redemption from the sale of railroad property under foreclosure proceedings in the federal court. Turner v. I., B. & W. R'y Co., 8 Biss., 380 (§§ 1609-20).

§ 1396. Relief from payment of prior mortgage under mistake.- One who has paid a prior mortgage under the belief that he had good title to the mortgaged property can have relief only when he has made the payment under mistake of fact, and not a mistake of law. He cannot have relief when he has acted in bad faith towards any parties interested in the property. Railroad Co. v. Soutter, 13 Wall., 517.

§ 1397. Subrogation — Rights of bondholders.-The holders of. state bonds issued in lieu of railroad bonds, the state having taken bonds from the railroad company secured by statutory mortgage, are entitled to enforce the lien of that mortgage and are subrogated to the rights of the state. North Carolina R. Co. v. Drew,* 3 Woods, 691; S. C., 13 Otto, 118 (BONDS, 1830-37).

§ 1398. The fact that railroad bonds were exchanged for state bonds so that the stockholders might use the proceeds for their own private advantage, and that they were so used, is no defense against a bona fide holder of railroad bonds. Ibid.

§ 1399. Where the lien of a bondholder is created by statute, his rights are governed by the statute, even where a resulting equity would have arisen without the aid of the statute. Ibid.

§ 1400. The possession of negotiable bonds is strong prima facie evidence of just title. Ibid.

§ 1401. In ordinary cases it throws upon the party questioning it the burden of showing that it is not bona fide; that the holder had notice of some vice or defect which vitiates the title. Ibid.

IX. REMEDIES AND JURISDICTION OF COURTS.

SUMMARY- Jurisdiction of corporation existing in several states, § 1402.— Jurisdiction of federal courts when bill is pending in state court with different parties, §§ 1403, 1404.

§ 1402. When two or more states have by concurrent legislation united in creating one and the same railroad corporation, as they may do, a court in either state may exercise jurisdiction over the entire line. If in a suit to foreclose such a mortgage the corporation be