[On application, for rehearing.]
MANNING, J.—We have carefully considered the application for a rehearing, on the last topic discussed in the opinion in this cause,—that, namely, concerning the division of the proceeds of the sale of the Montgomery and West Point Bailroad and equipments. The principal argument upon which this contention of appellants is founded, rests on the assumption, that it was one of the terms of the contract-between the two companies, that the Western Bailroad Company should, after acquiring the property of the Montgomery and West Point Company, execute its bonds tor the $1,200,000 mentioned, and its mortgage on the entire consolidated road and its appurtenances and equipment, to-secure payment of them. We find no basis for this assumption in either the pleadings or the evidence. We infer from them both that there was no such provision in the contract. The terms proposed and accepted were clearly stated in the-resolutions of both of the contracting parties at the meetings of the stockholders of each: and no such stipulation is set forth in either of them, although the members may have individually believed that the future policy suggested, in the report o[ the president to the West Point Company,, and in the resolutions of the board of directors of the Western Company, would be wise, nothing on that subject was-introduced into the resolutions to sell and purchase, which were adopted at the respective stockholders’ meetings. And that it was not the purpose of the board of directors of the Western Company to do this, is inferrible from the recital in. *156its resolution to purchase, and of the terms of the purchase, that it was adopted in accordance with the resolutions of the stockholders in convention this day while subsequent resolutions of the board relating to the issue of those bonds and execution of the mortgage, do not contain any such reference to the instruction of a stockholders’ meeting. They appear to have been passed by the board of directors, in the exercise of their own powers of administration, and might have been rescinded or changed at its pleasure at any' time. No liability was thereby incurred to anybody. And if there had been, the creditors of the other company had no part or voice in those negotiations. All the ingenious argument erected on the assumption referred to, is without any foundation.
But the able counsel for appellants further insist that, if it was not a part of the contract between the two corporations, "that the Western Company should, execute the bonds and mortgage and thereby give to the holders of them rights in all that property superior to those of the unsecured creditors of the Montgomery and West Point Railroad Company,— yet these creditors knew that it was in contemplation, that such bonds and a mortgage to secure them, should be executed, and were afterwards executed; and that a large number of these creditors were paid therewith or with the money thereby raised; and that not having objected to the transaction, those who had not been paid, ought to be considered as having ratified it, and be estopped from claiming priority over the holders of these bonds.
“ Whatever trusts or liens ” (say those gentlemen) “ arose by the transaction between the two corporations in favor of the Montgomery and West Point Railroad Company, were common to all of that class, and upon what principle can it be held that a portion of this class can accept the benefit of a mortgage on the property of both corporations, while another portion of the same class, who stand by and see it done, may assert against this mortgage a superior lien to it ? We have seen that these unsecured creditors had a right to share the benefits of this mortgage. There is no allegation that Morris and Lowry, the trustees, or the parties who advanced their money on the bonds or any body else is to blame because the appellees did not, like their more fortunate •or more diligent companions, get their debts funded under the mortgage, or paid in full with the money raised upon it.”
But what right had the creditors of the Montgomery and West Point Railroad Company to ratify or refuse to ratify *157the mode in which the board of directors of the Western Railroad Company chose to transact the business of their own corporation ? What reason had such creditors,—in view of the opinion of Mr. Pollard that the latter company should by such an issue of mortgage-bonds, provide for “ the entire debt of both companies not provided for ”—to anticipate that they would not “ get their debts funded under the mortgage or paid in full with the money raised upon it?” And where-is there any allegation or suggestion in this cause, that they have any of them refused to be “paid in full with money raised upon ” said mortgage, or by any other means to which the Western Railroad Company might resort in performance of the duty it undertook, when it declared that it “ hereby assumes the payment of all the debts, obligations and responsibilities of said Montgomery and West Point Railroad Company ?”
We are not able to perceive any such inconsistency or injustice as counsel imagine, in holding, that those of the unsecui’ed creditors of the Montgomery and West Point Company, or of the second mortgage creditors of the same company, who released their debts against it, in exchange for the bonds of the issue of $1,200,000 of the Western Railroad Company, indorsed as they were by two wealthy Georgia companies, are not entitled to a division of the proceeds of the property which belonged to the Montgomery and West Point Company with the creditors of that company.
Those who made this exchange, ceased to be creditors of’ the latter company, and obtained securities which they preferred, and which were probably more valuable than those they parted with. It is not they who complain of being in a worse condition by that transaction, or of injustice on the-part of the appellants, who were defendants below—but appellees, the suing creditors, who complain that they have not been paid either by those indorsed bonds or otherwise.
Let the application for rehearing be overruled.
Stone, J., not sitting.