U.S. Supreme Court
Wade v. Chicago, S. & St.L. R. Co., 149 U.S. 327 (1893)
Wade v. Chicago, Springfield, and St. Louis Railroad Company
Nos. 247, 248
Submitted April 21, 1893
Decided May 10, 1893
149 U.S. 327
The " after-acquired property " clause in a railroad mortgage covers not only legal acquisitions, but also all equitable rights and interests subsequently acquired either by or for the railroad company, the mortgagor.
Where negotiable paper has been put in circulation, and there is no infirmity or defense between the antecedent parties thereto, a purchaser of such securities is entitled to recover thereon, as against the maker, the whole amount, irrespective of what he may have paid therefor.
A railroad company contracted with a construction company to build and complete its railroad on a line designated on a map of the same, and to furnish and equip it, agreeing to pay for the same in stock and mortgage bonds, to be issued from time to time as sections should be completed. A mortgage was made of the road and property then existing and after wards to be acquired. The construction company began work and completed a small section, for which it received the stipulated pay in stock and bonds. It parted with the latter for a good consideration, and they eventually came by purchase into the possession of W. No further section was completed, but work was done at various points on the line, and the construction company acquired for the railroad company rights of way through nearly or quite the entire route. Subsequently another railroad company acquired these properties through the construction company, and completed the road. Held that W., being a bona fide holder of the bonds secured by the first mortgage, who had purchased the bonds in good faith, had through the mortgage a prior lien on the whole line chanroblesvirtualawlibrary
for the full amount of the face of his bonds, which was not affected by the fact that the new company acquired its rights and property not directly from the first company, but through intervening conveyances.
The case is stated in the opinion.