§ 076.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XI. instrument bondholders are of course affected ; and by express stipulation often it is made a part of the bonds themselves. Should, however, provisions in the mortgage or trust deed be inconsistent with those contained in the bonds, the terms of the latter control, since the bonds constitute the principal debt or the best evidence of the corporate obligation, for the pay- ment of which debt or obligation the trust deed or mortgage is but a security. 1 § 675. In order that bonds should constitute a lien on the property of a corporation, it is not necessar}^ that a mortgages, formal mortgage should be given (though, of course, under the various recording acts, a mortgage or trust deed duly executed and recorded is essential to the security of bondholders) ; for it has been held that bonds issued by a corporation pledging its real and personal property for the pa} T ment of the debt and interest, and containing other corresponding stipulations, will be treated by a court of equity as a mortgage, and enforced according to the intention of the contracting parties. 2 § 676. As against a railroad company and its privies, a railroad mortgage, although given before the road is completed, attaches to the road as fast as built, and to all property covered by the terms of the mortgage as such property comes into the owner- ship of the railroad company. 3 And thus a mortgage by a tion. White Mountains R. R. Co. v. White Mountains R. R. Co., 50 N. H. 50. 1 Railway Co. v. Sprague, 103 U. S. 756. 2 White Water Valley Canal Co. v. Vallette, 21 How. 414. See, also, Miller v. Rutland, etc., R. R. Co., 36 Vt. 452; In re Strand Music Hall Co., 3 I)e G., J. & S. 147, 158; Ketchum v. Pacific R. R. Co., 4 Dill. 78, 86. Compare Dillon v. Barnard, 1 Holmes, 386; Brunswick and Q. R. R. Co. v. Hughes, 52 Ga. 557; Thomas v. N. Y. & G. L. R. Co., 139 N". Y. 163; Hamilton Trust Co. v. Clemes, 163 N. Y. 423. 3 Galveston Railroad v. Cowdrey, Railroad mortgages Rolling stock. itors of their rights against the cor- poration would impair the obligation of a contract. Montgomery, etc., R. R. Co. v. Branch, 59 Ala. 139. But the legislature may constitutionally pass a law providing that unless a creditor of an embarrassed corpora- tion expresses his dissent from meas- ures deemed essential to the common welfare of the corporation and its creditors, he shall be held to have assented to them. Union Canal Co. v. Gilfillin, 93 Pa. St. 95; S. C, aff'd, 109 U. S. 401. Compare, also, Baltimore v. Baltimore Railroad, 10 Wall. 543. But a legislature cannot confirm a fraudulent sale of the mortgaged property of a corpora- 674
