The opinion of the court was delivered by
Me. Justice MoGowaN.The “Charleston and Savannah Railroad Company” was incorporated in 1853, to build a railroad from Charleston to Savannah.
In December, 1856, the legislature of South Carolina passed an act, entitled “An act to aid in the construction of the Charleston and Savannah Railroad.” (12 Stat. 543.) This act provided for the endorsement of the guarantee of the state upon the six per cent bonds of the said company to be issued, not to exceed $5000 per mile; said bonds not to be used for any other purpose than “procuring the iron rails, chairs, spikes, and equipments, and for putting down the rails,” etc., and then declared: “ When the whole of said road shall be completed, *239tbe state of -South Carolina shall be invested with a lien, without a deed from the .company, upon the entire road, including the stock, right of way, etc., . . . and the whole superstructure and equipments, and all the property owned by the company, as incident to or necessary for its business, for the payment of all of said bonds endorsed as aforesaid, as provided in this act, and for the interest accruing on said bonds,” etc. And the act further declared that “ the said lien or mortgage of the state shall have priority over all other claims existing, or to exist, against said company,” etc. Under the provisions of this act the six ¶er cent bonds of the company, payable. March 1, 1877, were endorsed by the state of South Carolina to the amount of $505,000, and issued by the company.
On January 1, 1858, before the road was finished, the company needed more money, and conveyed to I. W. Hayne, Edward Sebring, and E. M. B.eaeh, as trustees, all its then present and after to be acquired property, and all franchises, rights and privileges of the said company of, in, or concerning the same, in order to secure the payment of bonds to the amount of one hundred thousand dollars, a large part of which was issued. The road was completed and opened at the close of the year 1860.
The property was greatly damaged during the war. The referee reports that the company was reduced to insolvency; the road was broken up, the bridges destroyed, great part of the iron carried ofi, and the road as a whole no longer fit for use. Under these circumstances, the trustees under the deed of January, 1858, by virtue of the powers therein contained, proceeded to foreclose, and in December, 1866, the mortgaged premises were sold subject to the lien created hy the act of 1856. At this sale the property was purchased by Geo. W. "Williams and others associated with him, for the sum of $30,000, and in December, 1866, another act was passed -incorporating the purchasers as a new company under the name and style of the “ Savannah and Charleston Railroad Company,” and thereafter the company has been known throughout these long legal proceedings by that name. The court confirmed the sale, and the new company was duly organ*240ized, took possession of tbe road, and endeavored to reconstruct the same.
They had no other means of repairing the road but by a loan; but that they were unable to effect as long as the lien created by the act of 1856 in favor of the state was the first lien, and, therefore, in 1869 they memorialized the legislature upon the subject, and on March 2, 1869, an act was passed, entitled, “An act to enable the Savannah and Charleston Railroad Company to complete their road,” by which the company was authorized to issue other bonds to the amount of $500,000, bearing interest at seven per cent, the proceeds to be used in the extension, building, and outfit of the road. As they are frequently referred to in this opinion, the third, sixth, and seventh sections of this act are as follows:
Sec. 3. “That the said company is hereby authorized and required to fund and redeem the coupons for interest of the bonds of the Charleston and Savannah Railroad Company guaranteed by the state, now past due, and that may fall due on or before the first day. of September, 1869, by issuing therefor an equal amount of their bonds with coupons attached for interest, payable semi-annually, at the rate of seven per cent per annum,, and the principal to become due in twenty years after the date thereof. And the payment of the said bonds so to be issued in substitution for interest coupons shall be guaranteed by the state in the same manner and as fully as the said original bonds of the Charleston and Savannah Railroad Company are now guaranteed: subject, however, to the provisions of section six of this act.” t
Sec. 6. “ That the present lien of the state of South Carolina on said railroad shall, upon the issue of the bonds provided for in and by the first section of this act, be postponed and become a second lien, which said second lien shall extend over and cover the whole road, its outfit and real estate, as fully as is, already provided for by law. The said road shall be completed by the first day of January, 1870.”
, Sec. 7. “ This act shall not be of force until said Savannah and Charleston Railroad Company consent to the amendment of their charter, so that the property of said corporation shall *241be subject to taxation, in conformity with Section 2 of Article XII of the constitution, and said consent be certified under the seal of said company to the comptroller-general and secretary of state. Upon the filing of said consent, the said charter shall be deemed and held to be modified in conformity with said section of the constitution: Provided, That no tax shall be assessed or levied upon said road until the same shall have been completed.”
The company in form accepted this act, and in accordance with it issued bonds to the amount of $500,000, bearing interest at seven per cent per cmmim, covered by a mortgage to ¥m. Aiken, James Eobb, and Geo. W. Williams, as trustees, which represented that the state having postponed the statutory lien, it was the first lien upon all of the property of the company. The bonds -were negotiated with the contractors who rebuilt the road, and for other purposes connected with running the same.
In 1811 the stockholders of the company authorized another issue of bonds to the amount of $300,000, at the rate of eight per eentper a/nnrnn, which were covered by another mortgage of the property of the company, its rights, primileges cmd franchises, in this state and Georgia, executed to Andrew Simonds, H. H. DeLeon, and E. Dates, as trustees.
Much controversy has arisen under these acts and mortgages as to the rights of the different classes of creditors of the company, but it is believed that for the purpose of making intelligible the issues now involved-it will not be necessary to do more than make the following brief statement:
On April 12, 1870, Daniel Hand filed his complaint of foreclosure against the Savannah and Charleston Eailroad Company, D. H. Chamberlain, attorney-general of the state, and others, to enforce payment of the amount alleged to be due him on unfunded coupons issued under the act of 1856, to wit: Principal, $27,705, together with interest on the same. Soon after the attorney-general instituted proceedings to foreclose the statutory lien of the state, praying, among other things, that the creditors might be called in, for the appointment of a receiver, the sale of the property, etc. These cases,*242considered together, were argued twice before the Circuit Court, and, on appeal to this court, were dismissed, without prejudice, and the cause sent back, that the Circuit Court might decide the character of the relief to which the parties were entitled. 5 S. 0. 183.
On April 28, 1874, after the case went back to the Circuit, Judge Graham, seemingly by the consent of all parties, made a decree appointing Ohavies T. Mitchell, Esq., receiver of the road, who, in connection with an advisory board, was to work and manage the said railroad “ with the greatest possible skill and economy, and the results be reported quarterly to the court in this cause, and the net profits, after paying all necessary expenses, including such amounts, if any, as may be due the employees and officers for services, shall be applied quarterly to the payments of the debts.” The order in which the debts were to be paid by the receiver was declared in the decree, and all suits against the company were enjoined, etc. Soon after, Judge Eeed enlarged the powers of the receiver so as to allow him to sell the road for the sum of $1,500,000, which, as stated, had been or would be offered for the same. About this time Solomon L. Hoge instituted proceedings to take possession of the road as comptroller-general, under the fifth section of the act of 1869, but this effort seems to have failed, and needs no further notice here. See Ex parte Dunn, in re Hand v. Savannah and Charleston Railroad Company, 8 S. C. 208.
In 1875, "William Cutting and Heyward Cutting, executors of Francis IT. Cutting, deceased, who held a large number of the seven per cent bonds issued, under the act of 1869, made themselves parties in the cases, stating, among other things, that the income of the road under the management of the receiver and advisory board had proved insufficient to pay any of the debts set forth in the decree making the appointment, and praying a sale of the road, and that the bonds of 1869, and the state indorsed bonds of 1856, should be placed upon the same footing and the-guarantee of the state entirely discharged, and accordingly on May 1, 1875, a consent decree was entered ordering the sale of the road on a credit, and discharging the *243state from liability on its indorsement; yet it seems for some reason or other tlie sale and further proceedings under the-decree were suspended by an order of Chief Justice Moses in the case of Ex parte Dwrvn above stated.
On April 19, 1877, Judge Reed made an order appointing William Alston Pringle, Esq., special referee, to report the rant of the different claims and in the order in which they should be paid upon the foreclosure and sale of the property, and on July 5, 1877, the said referee made a full and exhaustive report, both on the main question as to the priorities of the bondholders and all the collateral questions arising in the case. He held that the lien of 1856 attached to the bonds issued under it and retained its priority, and that the state could not postpone that lien to the bonds and mortgage of 1869.
He further held that the holders of the coupons belonging to the bonds issued under the act of 1856, who received in exchange for their coupons the bonds issued under the third section of the act of 1869, thereby accepted the provisions of the act of 1869 a/nd consented to the postponement of the lien of the act of 1856, so far as the coupons funded were concerned. “ The bonds, therefore, issued under the third section of the act of 1869 have no lien on the property of the company, and will take rank after other obligations of the company which have a lien on its property,” etc.
The referee, therefore, after providing for certain liens on particular property, reported the priorities of the bonds to be as follows: First. The bonds and coupons still unfunded issued under the act of 1856 to be the first lien upon all the property of the company. Second. The bonds and coupons issued under the mortgage of 1869 to be a second lien upon all the property of the company. Third. The bonds and coupons issued under the mortgage of 1871 to be the first lien on all the corporate franchises of the company and the third lien upon all its property. Fourth. The judgment held by W. C. Bee, assignee, being the next lien after the foregoing on all the property of the company. Fifth. Thé seven per cent interest funded bonds having no lien'on the property of the company, etc.
*244' To this report exceptions were filed, and the case came on to be heard before Judge Wallace, who, in so far as it related to the priorities of the different classes of bonds, confirmed the report, and' ordered it to stand as the judgment of the court, and ordered the property sold by one of the Masters of the court. Exceptions were filed, and upon appeal to this court the case was heard here at the April Term, 1870. See 12 S. C. 314. In regard to the main question as to the right of the state to postpone the lien of the bonds issued under the act of 1856 to those issued under the act of 1869, this court concurred with the judgment of the Circuit Court. It also concm-red with the referee and Circuit judge that the holders of the colons belonging to bonds issued under the .act of 1856, who received in exchange for the coupons the bonds issued under the third section of the act of 1869, accepted the provisions of the act of 1869, and consented, so far as the coupons were concerned, to the postponement of the lien of the act of 1856. But this' court went further and held as follows:
“ The referee, and the court sustaining his conclusions, held that the effect of the act of 1869 on those funding coupons thereunder was confined to the coupons so funded, and did not preclude parties having funded coupons from after-wards asserting their original rights as it regards the bond and other coupons not funded. The correctness of this conclusion will next be considered. The exact question is whether one having a bond of the class of 1856, and also coupons of the same class, whether detached or otherwise, and funding such of said coupons as were matured, under the third section of the act of 1869, can be regarded as having accepted the provisions of that act as well as it regards such bonds and immature coupons as the coupons that are matured and actually funded. The bonds and their coupons constitute a single obligation. State v. Railroad Company, 8 S. C. 153. The coupon merely evidences the obligation collaterally, as it regards one of its incidents. The act of 1869 operates upon the entire obligation, both principal and interest. One who accepts its provisions for one purpose, necessarily accepts it for all pur*245poses, for its provisions are not capable of severance. When one claiming upon an obligation for principal and interest accepts interest upon a composition in terms assuming to affect the conditions upon which the same is due, he must be regarded as accepting the terms of composition in their whole scope. This conclusion is so obvious that it does not require authority or illustration. It depends upon the principle that when the contract is one and indivisible, if it takes effect at all it must do so as to all its parts. This does not preclude the possibility of severing the terms and conditions of a contract, but that depends upon mutuality of consent, while in the present case there is no evidence that the state has assented that the act of 1869 may take effect otherwise than according to its entire scope and purpose. It would follow that one funding coupons under that act must be regarded as bound by its terms, as it regards am/ bonds or coupons held by him at the time of fxmding of the same class, at least, with the coupons funded. The case before us does not enable us to apply this principle to the facts, of the case/ we can, therefore, only set aside the conclusion of the Circuit Court to the extent that it conflicts with the conclusions just stated, and the, exact application of the principles laid down must be made upon a further hearing in which such evidence may be introduced on that point as the nature of the case demands.” 12 S. C. 350.
Accordingly the case went back, and Judge Aldrich made another order for the sale of the property, which was affirmed on appeal. See 13 S. C. 467. The sale was made by Mr. Porter, one of the masters, for the sum of $300,200, less than either class of the bondholders seeking payment, and was confirmed by the court, and title made to the purchasers.
The order of Judge Aldrich also directed Mr. Pringle, the referee, to inquire and report as follows: 1. “ What claims and demands against the Savannah and Charleston Railroad Company are undisputed and entitled to immediate payment. 2. What bonds and coupons of said company issued under the act of 1856 are entitled to priority of payment out of the property of said company, under the principles settled by the *246judgment of tlie Supreme Court. 3. The amount of bonds issued under the act of March, 1869. 4. The amount of bonds and coupons issued under the Act of 1856, and entitled to priority of payment. 5. The bonds and coupons issued under act of 1869, indorsed by the guarantee of the state. 6. "What coupons of bonds, issued under the act of 1856, have been funded under tlie third section of the act of 1869, the number and value of said coupons, by whom, when, and under what circumstances funded, etc.”
The referee took testimony and made another report upon the point recommitted to him. He construed the opinion of the Supreme Court to mean that only the bondholders, personally, who funded coupons from bonds of 1856 must be regarded as bound by the terms of the act of 1869, so far as regards bonds and coupons held by them at the time of funding, and that those who presented six per cent bonds, and were not found to have funded coupons, could not be presumed to have accepted the act of 1869. Considering the evidence offered with reference to this principle, he found that certain persons presenting bonds of 1856 were estopped, for the reason that it appeared from the books of the company that coupons had been funded in their names. From the identity of the names he felt authorized, nothing appearing to the contrary, to conclude that tlie same parties presenting the bonds had owned them at the tvme of funding the coupons. He furnished a list of the bondholders falling under this category, showing their names, and their bonds amounting in the aggregate to $65,500. But as to all the other bonds and unfunded coupons issued under the act of 1856, he held that the proof necessary to bring theni under the principle of estoppel had not been furnished, and that-tliey are entitled to retain their prior statutory lien, notwithstanding the act of 1869.
To this report exceptions were filed, and the case came on to be heard by Judge Mackey, who, upon the main point as to the sufficiency of proof to estop the holders of the six per cent bonds, reversed the report of the referee, and after excepting tlie coupons of Daniel Hand as res adjudiaata, and the bonds held by Beaty, as executor of Mrs. Nancy *247Blair, and those proved by Bradley Martin, decreed as follows: {The opinion here quotes nearly all of the sections numbered 4 and 5 of the Circuit Decree on pages 230-232 ante.]
Exceptions by the various parties and in different forms have been filed to this decree, and the question is, whether it is erroneous, and if so, wherein ?
"We cannot follow the exceptions seriatim, but will endeavor to consider all the points as they arise.
Most of the complications of the case originate in the fact that while the act of 1869 was unconstitutional and void so far as it undertook to postpone the lien of 1856, yet it has been held to be valid in part; that is to say, bad in the general, but binding as to certain persons and for particular purposes. The rights of the parties might have been easily determined if the act of 1869 had been legal and binding in all its parts, or if, on the other hand, it could be considered as wholly void and expunged from the statute book. But when the provision aforesaid, void in the general, has been held to take effect as to certain persons, not from its intrinsic authority as an act of the legislature, but from the conduct of the parties in accepting the benefit of some of its provisions, there necessarily springs up a new class of questions such as these, viz., who have done these alleged acts of acceptance and as to the proper effect and extent of such acts as to other persons and claims not involved is the acts themselves ? In this state of the case the difficult duty is devolved upon the court of determining these vexed questions without the least assistance from, but really .in seeming conflict with some of the express provisions of the act of the legislature in connection with which they arise.
The most important question in the case is that'as to the priorities of the bondholders under the acts of 1856 and 1869. This court in its former judgment determined the rights of the parties. It decided that the state could not postpone the lien of the act of 1856, and that the act of 1869, purporting to do so, was unconstitutional and void; but it held at the same time that to this general conclusion there was an exception so far as concerned those who had funded coupons taken from bonds *248issued under the act of 1856 then owned by them, and taken in exchange bonds issued under the act of 1869. As to these it was held that they had accepted the act of 1869 quoad these coupons so funded; and further, that on the principle of estoppel “ one funding coupons under that act must be regarded as bound by its terms as it regards any bonds or coupons of the sa/me class held by hi/m at the Ume of funding!” In order that the principle here laid down might be intelligibly applied, it was necessary to send the case back; and it was remanded in order to have it ascertained whether any of those who funded coupons held other bonds or coupons of the same class “ at the’ Ume of funding,” and if so, what bonds or coupons were SO' held, and by whom. As we understand it, this was simply a question of fact, and being a question of evidence must be determined precisely as other questions of that kind are determined ; and it will probably assist us in reaching a satisfactory conclusion to keep constantly in view the simple character of the issue.
The doctrine declared by this court as to the effect of funding coupons, upon the holders of six per cent bonds, does not proceed upon any supposed relation between the coupons funded and the bonds from which they were taken, but is of that class of estoppel which arises from the “ conduct of panties.” As it springs only from the act of the party it is purely personal, and in its effect cannot reach beyond the bonds or coupons actually held at the time by the party funding. It is true the estoppel springs from the funding of the coupon; that is to say, not from the coupon itself, but from the act of funding it; upon the principle that an admission of one as to a part of his property, may be held to affect all his other property of the same character. ¥e think it is a misapprehension to suppose that the estoppel either arises from or rests upon a principle in the nature of a proceeding in rem, inhei’ing in the coupon and thereby affecting the bond from -which it was cut without regard to who was at the time thé owner of the bond. The ownership at the Ume of funding is the indispensable prerequisite to the existence of the liability; and the fact that the coupon and bond were originally parts of the same paper can *249have no effect whatever upon the question of estoppel, except in so far as it may be considered as a circumstance of proof upon the question of ownership at the time of funding, in which view it will be considered hereafter.
Was the proof sufficient to show that any of those now presenting bonds or coupons of 1856 had funded coupons of that class in bonds of 1869, being cut the time of funding the holders of the bonds now presented, and, if so, as to what bondholders and as to what bonds or coupons was such proof made?
In this issue the 01ms was on those who alleged the existence of facts necessary to create the estoppel. The court had settled the law that the lien under the act of 1856 was not postponed, but that practically there might be an exception to be determined by the existence or non-existence of certain facts. When a party proved that he held bonds of the issue of 1856, he was entitled to priority, unless it could be made to appear that he fell within the exception, and it was incumbent on those who affirmed that he did to prove the fact. This is elementary. “ A third rule which governs in the production of evidence is that the obligation of proving any fact lies upon the party who substantially asserts the affirmative of the issue. This is a rule of convenience, adopted not because it is impossible to prove a negative, but because the negative does not admit of the direct and simple proof of which the affirmative is capable. It is therefore generally deemed sufficient, when the allegation is affirmative, to oppose it with a bare denial till •it is established by evidence. . Such is the rule of the Roman law. ‘ Ei incxombit probatio gui dicit, non gui negat.’ ” 1 Greenl. Elvid. § 14.
Accordingly the six per cents, with the exception of three or four individuals, offered no proof, but stood upon the former judgment of this court that the act of 1869 did not postpone them. The seven per cents undertook to make out against them the case of estoppel authorized by the judgment, and for that purpose introduced testimony, including the books of the company, to show who had funded coupons in 1869. The books were objected to as incompetent against the sixes. The entries were made in the handwriting of S. W. Fisher, treasu*250rer of the company at the date of the entries, who is now dead. The referee admitted the books “ as coming within the rule laid down by Mr. Wharton (On Evidence, § 238), as memoranda or book entries of an officer, agent, or business man when in the discharge of his duties, after his decease.” We cannot turn aside now to go fully into the matter, but only say that under the circumstances of the case we think the referee did right in admitting the evidence, on the ground that it was the best proof the nature of the subject admitted of, and from the necessity of the case.
As to the sufficiency of the proof made, the referee and the Circuit judge took very different views, arising principally from the force of presumptions accorded by the judge to the simple possession of the coupons funded. We think it appears that the company is in possession of coupons from all the six per cent bonds, except perhaps twelve held by Mrs. Blair’s estate. It was claimed on one side, and as strongly denied on the other, that all these coupons had been funded and none were taken up by payment. The evidence on the subject was somewhat confused. Mr. Fisher, who superintended the funding and made the entries, is dead, and the other witnesses for the most part could speak only from the boqks. It was much easier to issue other bonds than to pay the cash, and it is reasonably certain that a large majority of coupons now in possession of the company were funded — certainly to the amount in the aggregate of $112,800, but it is not quite clear that the company funded coupons from all the bonds, and to the extent of that uncertainty it would be difficult to say when any particular bond was presented, whether it was one of those from which funded coupons had been taken. But this is not very important. If we assume that the company has funded coupons of all the bonds, with exceptions as stated, how does the matter stand ?
I. We have the names of those who now present six per cents, and the books give us the names of those who funded coupons from sixes, and we find that in a large majority of cases the bonds are now presented by persons whose names do not appear in the funding. As a rule those who funded and *251those who now present bonds are different persons. There are, however, some cases in which the bonds are now presented in the name or at least in the right of those who appear to have funded coupons. As to this class the referee, as we understand him, having received no explanation from the parties after opportunity given to them, held it sufficiently proved that those now presenting bonds were the holders thereof at the time they funded the coupons, and in consequence that as to these bonds they are estop]ied by the act of 1869.
In opposition to this view it is urged that none of these bonds are certainly shown to be the identical bonds from which their coupons were funded, and that after such a lapse of time it may be that the bonds now presented were purchased after ■the coupons were funded. This may be possible, but considering how easy it would have been for the parties to make .such explanation if they could have done so, we concur with the referee in his conclusion, that as to this class of bondholders it was proved that they were the holders of these bonds “ at the time of funding.” The principal witness being dead, it was from the nature of the subject difficult to make proof of the fact of ownership at the time of funding, and as a circumstance, the coincidence of the names of those who funded .and those who present the bonds is so strong that unexplained it affords reasonable proof of the ownership of the bonds at the time of funding, although that occurred as long ago as the year 1869. The referee gives a list of those whom he places in this class, with some explanation, in his second report, which upon this point is affirmed and made the judgment of .the court.
II. As to all the remaining bonds and unfunded coupons issued under the act of 1856, which are now presented by parties other than those who had to do with funding coupons, the question is more difficult. As to these the referee held that “the non-appearance of the name of the present holder in the books of the company is presumptive, if not conclusive, that the present holder of the bond was not the holder at the time of the funding, or that the coupons were sold and not personally funded by him. The bonds being negotiable seen*252rities are not affected by any transactions of which the present holder has had no notice, and the present possession of such a bond is at least jprima-faeie evidence that such possession is Iona fide, and without notice of any equities affecting it,” whilst the Circuit judge took a different view, and held, as previously stated, that all the sixes, no matter by whom proved, are estopped by force of the presumption that the possession of the coupon is jpri/mafade evidence that the holders owned the bond from which it was taken at the time of funding.
It thus appears that the whole question is made to depend on a presumption which is claimed to arise out of what is called tlie “ juridical relation” of a coupon to the bond from which it was originally taken. It is certainly true that the parties who funded coupons had possession of them at that time, and it is claimed that possession of the coupon is primes facie evidence that the holder was at the time the owner of the bond from which it was taken. As we understand it, this is only another mode of expressing the proposition that the original unity of the bond and its coupons creates a presumption that such relation continues until the contrary is shown. If we are correct in this, the presumption claimed is clearly not one of those presumptions of law which are conclusive, but of fact, “ which are, in truth, but mere arguments, of which the major premise is not a rule of law, and ought to be judged by the common and usual tests of the truth of propositions, and the validity of arguments.” Qreenl. Evid., § 44. Thus considered by the usual tests of truth, can it be said tliat the possessor of a coupon is, as a matter of fact, so certainly and universally the owner of the bond from which it Avas taken that it may be affirmed, as a rule of evidence, that the possession of one at any particular time subsequent to its issue proves the ownership of the other at that time ?
It is true that the bond and its coupons were originally parts of the same paper; but, in regard to the idea of “ continuity,” it should be borne in mind that from the first the bond and coupons were not intended to remain, and that there is nothing in the character of their connection which reqtcires that they should remain one and indivisible. On the contrary, the *253cohpon, as its name indicates, was made for the purpose of being cut off.and it is well settled in law that such separation makes the bond and coupons distinct evidences of debt; and it is as well settled in fact that from the convenience or necessities of parties it is matter of every-day practice to separate them. As, for example, the action in this case was founded exclusively on coupons held by Daniel Hand, who, as far as it appears, never' owned a boud of the company, but received his coupons in the course of business, without the least reference to the bonds from which they had been cut. In the case of Hartman v. Greenhow, 12 Otto, 684, the Hnited States Supreme Court say: “ The coupons, when severed from the bonds, are negotiable, ánd pass by mere delivery. They then cease to be incidents of the bond, and become in fact independent claims. They do not lose their validity if, for any cause, the bonds are cancelled or paid before* maturity. . . . Here, also, the coupons held by the petitioner are distinct contracts, imposing separate obligations on the state. He was not the owner of the bonds to which they were originally attached. In his hands they were as free from all liability on the bonds as though they had never been connected with them.” In Ketchum v. Duncan, 96 U. S. 659, Mr. Justice Strong says: “ Interest coupons are instruments of peculiar character. Title to them passes from .hand to hand by mere delivery. A transfer of possession is presumably a transfer of title.”
We cannot, therefore, certainly say that any particular bond now presented is the identical bond from which coupons were funded; or, if so, that such funding was done while the person now presenting the bond was the holder of sctid bond. We cannot regard the mere possession of the coupon funded as affording satisfactory proof of the ownership of the bond at that time. This would be giving to the original unity of the bonds and coupons a continui/ng force and effect inconsistent, it seems to us, with the usual course of business as to such' papers, and most probably, at least in some instances, at variance with the truth. The evidence does not come near enough or show the necessary fact with sufficient certainty and distinctness. Proof of facts which are to create an estoppel *254should be full and clear. “ Certainty is essential in all estoppels. The courts wrill not easily suffer a man to be deprived of his property or security when he had no intention to part with it.” Big. on Est. 441.
“When the burden of proof lies upon the plaintiff there must be something more than probability or even strong probability. ... It seems to me that it would be very unsafe to-say that because there is a strong probability of the existence of a state of things from which a prior authority, or subsequent ratification, might be inferred, a jury would be warranted in acting upon it as if there were strict legal proof.” Fitzgerald v. Dressler, 97 Eng. Com. L. Rep., 395. The case of McCoy v. Washington County, 3 Wall., Jun., 381, and Moran v. County Com'rs, 6 Ohio St. 287, cited and relied on as announcing a different doctrine, are not analogous to this cáse. If these cases are examined carefully, not with reference to the doctrine and dicta of the opinions, but to the essential fads and thq points decided, it will be found that neither of them holds anything inconsistent with the views here presented.
The inherent insufficiency of the proof to estop the bondholders of the class now under consideration will be more manifest when reference is made to the nature and character of the bonds as negotiable instruments. These bonds, although issued as long ago as 1856, were not due and payable until March, 1877. They were not dishonored, and passed from hand to hand by mere delivery. Whatever presumption as to the ownership of the bond at the time of funding may have arisen from the possession of the coupon at that time, is, at least, counterbalanced by that other presumption which arises from the possession of the bond itself.
“Bonds with coupons payable to bearer are negotiable securities and pass by delivery, and, in fact, have all the incidents of commercial paper. It is not necessary that the holder of coupons in order to recover on them should own the bonds from which' they are detached. The coupons are drawn so that they may be separated from the bonds, and, like the bonds, are negotiable, and the owner of them can sue without the possession of the bonds to which they were originally *255attached, or without being interested in them,” Thomson v. Lee County, 3 Wall., 331, and the authorities there cited; Langston v. S. C. R. R. Co., 2 S. C. 248.
But it is said that the present holders acquired their bonds after the act of 1869, and with knowledge that some of the coupons originally attached had been cut off, which itself was information that they had funded hy the owner under the act of 1869, of which they are bound to take notice; therefore, the present holders are in no better condition than those who, it is alleged, funded coupons from them while they were the holders. It will be observed that this doctrine of notice is based entirely on the assumption not only that, the missing coupons were necessarily funded, but that it was done by the persons then owning the bonds, which we have endeavored to show could not be taken as universally true. Can a party be fairly fixed with notice of a fact proved only by a presumption which itself is at least uncertain ?
It does not appear at what time the holders of these bonds acquired title to them, which might have been during the period from 1856 to 1869 ; but if we assume that it was after the act of 1869, and that that was a public act, of which every citizen was chargeable with notice, yet that act of itself cannot justly be considered as giving notice of anything outside of its terms. It did give notice that the company was required to fund the past-due coupons of 1856, but it -gave to the public no information as to what coupons had been funded, nor by whom, nor whether those funding owned the bonds “ at the time of funding.” Whilst notice of the act as it was written was possibly notice of all the consequences which it involved, whether then known or unknown, yet, in considering a question which touches the “bonafides,” we cannot shut our eyes to the fact that the act did not. on its face declare what was subsequently developed by the courts, that the postponing provision was void, but contained in itself a latent power of restoration, as to the persons who should, even in ignorance of the true condition of things, accept some of its provisions;
For well-known reasons the doctrine of constructive notice, including the duty of inquiry, is not applied with strictness to *256negotiable paper, which by the Law Merchant passes by mere delivery. “ Possession, even without explanation, is primafacie evidence that the holder is the proper owner or lawful possessor of the instrument, and the settled rule is that nothing short of frcmd, not even gross negligence, is sufficient to overcome the presumption and invalidate the title of the holder, as inferred from his actual custody of the instrument.” Commissioners of Marion County v. Clark, 94 U. S. 278. “ The purchaser of negotiable securities before their maturity, whatever may have been their original infirmity, can, unless he is personalty cha/rgeable with frcmd vn procuring them, recover against the maker the full amount of them, though he may have paid therefor less than their true value.” Cromwell v. County of Sac, 96 U. S. 51; Witte v. Williams, 8 S. C. 290; McKnight v. Gordon, 13 Rich. E. 244. In our own well-considered “ Bond Debt Cases,” 12 S. C. 272, Judge Mclver, as the organ of the court, after reviewing the authorities, announces the law in these terms: “ The holder of commercial paper, in the absence of proof to the contrary, is presumed to have taken it under-due for a valuable consideration, and without notice of any objection to which it was liable.”
The referee’s report as to the class of bondholders under the act of 1856, now under consideration, is also affirmed.
In the general view taken by the Circuit judge, it was not necessary to consider special cases, and, therefore, they are not regularly before this court. The claims of Lord, as executor of Mrs. Roper, Tiedeman, and Quinby, should be recommitted to the referee to inquire and report in what class they should be placed respectively according to the principles herein indicated.
III. It is insisted that the coupons of the six per cent bonds which matured prior to September, 1869, are entitled to payment in full before distribution of the proceeds of. sale among, the bondholders, for the reason that all the coupons of the same ' class were settled, and the priority thus claimed is necessary to establish that equality vdiich is demanded by the principles of equity. In support of this doctrine is cited the case of Stevens v. N. J. and Oswego Midland R. R. Co., 13 Blatch., 412. *257Tbe referee adopted this view, but the Circuit judge denied the claim, and upon this point we agree with the judge. The holders of these coupons, if they had so desired, could at any time after 1869 have funded their coupons in bonds under that act, and thus placed themselves upon an equal footing with others holding coupons of the same class. They did not do so, and as to the fund now in the hands of the court arising from the sale of the property, being in the nature of equitable assets, they are only entitled to their pro rata, with the other bonds and coupons of 1856, which are not affected by estoppel. The State v. S. and U. R. R. Co., 8 S. C. 129, and the authorities there cited.
IY. It is further claimed that inasmuch as some of the sixes have by their conduct accepted the act of 1869, and as a consequence taken their place in the postponed class, a corresponding number of the sevens should be advanced and allowed to take their places thus vacated in th& first class; that the waiver .of the lien enures to the benefit of those in whose favor it was made; that it must be held to operate as a/n, assignment of the interest under the first lien, and that to the extent of the estoppel the parties simply change places. "VVe do not see that the unaffected sixes would have any equity to object to such a result. They took their security knowing that it covered the whole class; so far as they are concerned it was a mere acSident that some of their associates obeyed the law as it was written, and did that which postponed them. Those who did nothing have no equity to have their security increased in value, as each associate, who might have stood still, as they did, fell by his own act into another and a lower class. They have no right to complain when they get all the rights originally secured to them. If the act of 1869 were legal as a whole, or if it had been accepted by all the sixes, it is clear that by the terms of the act they (the sixes) would have been postponed, and we suppose the sevens would have become thereby “ the first lien.”
But in case of an acceptanceonlgimpart, can we declare the same result yw tanto as to the claims of those who are held to have accepted the act of 1869? We regret to say that we *258think that is beyond the power of the court. The act proceeded on the assumption that it was to take effect as a whole, and of course it made no provision for the case which has arisen. It has been declared void, and is only revived quoad those who have accepted. it, and there is still a class of sixes who stand out and insist upon their rights as having “ the first bien.” We see no authority which would ■ authorize the court to declare any part of the sevens entitled to take the place of thqpostponed sixes, and share in that first lien. Estoppel is not declared by the act, but is the result of jiidicial interpretation. We cannot amend the law so as to meet an emergency which was not foreseen or provided for by those who framed it. We can do no more than simply declare the result of the estoppel as to the sixes, who have, by their own act, satisfactorily proved, lost their priority, leaving the sixes who are not estopped entitled exclusively to the first'lien, as given to them by the act of 1856. This was in effect held by the former judgment.
Y. It is still further contended that the interest funding bonds of 1869, which were taken in exchange for funded coupons of 1856, are entitled to rank as high as the coupons for which they were taken; that the state proposed to put these bonds exactly upon the same footing as the bonds from which they were detached, and that proposition as a whole having failed because of the unconstitutionality of the act, the holders of these bonds should not be bound by any of the provisions of the act, but be remitted to their former condition. If we could administer abstract justice, there might be force in this view. It is undoubtedly time that coupons are of the same grade as the bonds from which they are taken, and it is also true that nothing is payment but that which produces payment, or is received as payment. “ To give one security for another of equal dignity, without the intention of discharging the debt, is not payment, but substitution^’ Gibbes v. G. and C. R. R. Company, 13 S. C. 228. The difficulty here, however, is that the parties funding took, the bonds as payment under the act of 1869, and gave up their coupons; and there is also a further difficulty that the act of 1869, which they *259accepted by receiving bonds under it, provided no secwrity whatever for this class of bonds, except the guarantee of the state. This question was also adjudged by the former decision in this case, which declares as follows :
' “ There was no error in ruling that the bonds issued under the act of 1869, for thp redemption of coupons of 1856, were not entitled to any lien on the property of the company. It has already,been held that the act of 1869 was, in effect, an assertion on the part of the state of exclusive control over the lien or mortgage created by the act of 1856, and that the holders of bonds and coupons who accepted the benefit of the act of 1869, assented to and are bound by this view of the act of 1856. It would follow that they can claim nothing but what the act of 1869 recognizes by way of security. In that act the state waives its lien under the act of 1856 in behalf of the holders of bonds issued under the first section of that act, which does not cover the redemption bonds. Consequently the position of the redemption bonds is this: The property of the company is liable, as far as the bonded debt is concerned, m the first instance, for the payment of the bonds and coupons of 1856, where the rights of the holders have not become subsequently impaired; secondly, to the bonds issued under the first section of the act of 1869; thirdly, to indemnify the state upon its guarantee on the bonds and coupons of 1856, and on those issued under the act of 1869, which have upon them the indorsement of the guarantee of the state. This would leave the state bound as surety on the redemption bonds, and holding a third lien wholly subject to its control for its protection from liability thereunder.”
. To pay the liens in the order here indicated the sale of the road was ordered, and the judgment further declared “ that as to all that part of the permanent property mortgaged that lies within the state of Georgia, such sale must be made subject to such liens as have been or may hereafter be established under the laws of that state.” That is to say, subject to such liens by-mortgage, execution, or otherwise, as by the laws of that state exist upon the permanent property of the company within the borders of that state.
*260The next question is as to the coupons of Alexander Isaacs, G. N. Miller and James Adger & Co. On February 19, 1877, an order was made referring the issues to ¥m. Alston Pringle, Esq., as referee, to take testimony, “ascertain and settle the rank and priorities of the claims proved by the parties to the suit, and all others whose debts are secured by mortgage or other liens upon the property and franchises of the company, and to report the order and rank in which the respective claims or classes of claims proved before him were to be paid upon the foreclosure and sale of the property.”
The referee took the testimony, and on July 5, 1877, reported that the bonds and coupons of 1856 proved before him were stated in “ Schedule A” as part of his report, which enr braced detached coupons of the years 1870, 1871 and 1872, proved by James Adger & Go. to the amoxxnt of $14,580; by Alexander Isaacs to the amount of $14,730; and Geoi’ge N. Miller to the amount of $14,730. These items in the report were not excepted to. The Circuit Court confirmed the report April, 1878, and upon appeal to this court April, 1879, the Circuit decree was affix’med, except as to the extent of the estoppel resulting from fuxiding coupons, as to which the court set aside the conclusions of the Circuit judge, to the extent that it conflicts with the conclusion just stated' — ■“ subject to the modifications herei/nbefore indicated, the decree of the Circuit Court should be ajfirmedJ
The case as directed went back to the Circuit. A second reference was ordered Januaxy, 1880, “ to inquire and report what bonds and coupons of said company issued under the act of 1856, a/re entitled to priority of payment under the principles settled by the judgment of 1879, the amount of bonds and coupons issued under the act of 1856, not entitled to priority; what coupons under the act of 1856 have been funded; the number and valxxe of said coupons, by whom and under what circumstances they were funded,” etc.
While holding the reference under this order, it is alleged that facts were “ satisfactorily ascertained ” by some of the counsel, before overlooked, which led them to make a motion on March 30, 1881: “ That so much of the report of the Hon. *261Win. A. Pringle, referee, of July, 1877, as relates to the coupons of the six per cent bonds of the Charleston and Savannah Railroad Company guaranteed by the state, produced before him in the names of Alexander Isaacs, George N. Miller and James Adger & Co., be recommitted to the referee, and that he inquire and report whether the said coupons have, by reason of payment or from any other cause, lost the ra/rik to which they would otherwise be entitled under the principles of his report, with leave to report any special matter.”
Upon the hearing of this motion, affidavits were submitted stating in general the facts to be as follows: The company was required by the act of 1869 to pay in cash the interest due on the bonds of 1856 from and after 1870, and in default of payment the comptroller-general was authorized to take possession of the road. When the coupons of 1870,1871, and 1872 fell due, the company was unable to pay them, and the President, Isaacs, and other friends of the road, agreed to advance the money necessary for that purpose upon condition that they should be allowed to hold the coupons so taken up as security for such advance. The company advertised as if they were about to pay, giving notice that the coupons would be paid on presentation at the First National Bank of Charleston. The parties holding coupons presented them and received the money which they called for, and the coupons were entered as if paid by the company; but, in fact, the money used belonged to the pa/rties who ad/oa/nced it.
The coupons thus apparently paid by the company, but in fact with money furnished by the parties, were delivered uncancelled to the parties, respectively, who advanced the money. When in this suit the creditors of the company were called in, the holders of the coupons thus acquired presented and proved them regularly before the referee, who, as stated, reported as far. back as 1877 that they were proved. There was no exception to this part of his report, which was confirmed by the Circuit and Supreme Courts.
Under these circumstances, the Circuit judge held that “ the question which might have been made at the proper time, was whether the present holders of the coupons, having advanced *262their money and paid for them, were entitled as purchasers to stand in the place of the bondholders who got their money ? Fraud is not alleged. The opinion of the court is, that the petitioners having neglected to raise the question at the proper time are now too late. It is res adjudícala, and there is no sufficient reason for opening the judgment heretofore rendered, even if it were within the jurisdiction of the court. The motion is refused.”
Was this ruling error? It is claimed that the matter now proposed to be referred to the referee was never in issue before him, and therefore could not have been decided by him in 1877, when he reported that these coupons were regularly proved and set down as existing demands against the company. It seems that at the time the coupons were proved no special attention was called to the circumstances under which possession of them had been acquired or the question as to their rights in terms made before the referee, but that the parties presented the coupons and proved them in the usual way without objection. The other creditors were all parties and did not suggest that these coupons had in effect been paid by the company. It may be that this omission was caused by the unusual mass of testimony and the complicated nature of the questions involved; yet it is undoubtedly the duty of a party to prove his case at the proper time or take the consequences. All matters which were then before the referee, or should have been before, or were necessarily involved in what was before him, were then in issue, and must be regarded as having been considered and decided by him.
The court cannot decide matters by halves. “ If a defendant has been before a competent tribunal, which has proceeded to judgment, that decision, until reversed, is conclusive upon him in every tribunal having concurrent or other jurisdiction. It is conclusive upon him as to every matter of defence, not only presented but which could have been presented by him, and it is conclusive upon him, although the judgment be erroneous, if lie acquiesce in it and does not proceed to reverse it. It is conclusive on him because a pa/i'ty whenever he is brought i/nto a court is bound to full MUgence, which, if he *263uses, Tie will obtain his right — if he neglects either in putting in proper pleas, or introducing ail his evidence to support them, he has no one to blame but himself) nor will bis neglect in one court be allowed to give him a right to a .second trial ■either in that court or another.” Maxwell v. Connor, 1 Hill Ch. 22. The question of the ownership of the bonds and the right of the claimants to present them as still unpaid by the company, was necessarily involved in the proof of the coupons, which the referee reported had been made, and the judgment must be held to have embraced 'the very matter now proposed to be considered.
It is said, however, that even if this be so, the judgment was not final, as the cause is still 'in court. It is" true that there has been no final judgment in the sense that the litigation has been entirely ended. The case has been before this ■court several times, and at different stages particular questions have been decided, and as to these the decisions were as conclusive and final as if they had been the only questions in the •case, e.g.\ The right of -the state to postpone the lien of 1856 was decided by this court in the former judgment, and .-although the cause upon other points is still before the court that one cannot be again stirred. In cases involving many ■questions there is danger of the litigation being prolonged,, and it is necessary to eliminate, in their order, those fully decided so as to be able to make progress with those still undecided.
In the case of Boyce v. Boyce, 6 Rich. Eq. 302, the court says: “We have numberless adjudications that where •a party had an opportunity to except and has not excepted, he cannot again bring the matter either before the master (or the court) on Circuit or on appeal. The principle is essential to the due and orderly administration of justice, and must have a place in every well-constituted forum. If at law a party pleads to special points neglecting other points, he acquiesces in the pleadings of his opponent relating to the points he does not contest; and so. here and so everywhere. We have othercases to the effect that if a party appeals he is concluded from considering points not covered by his appeal, and after the *264appellate judgment is delivered upon the points to which the appeal refers, he is not at liberty afterwards, in a future proceeding in the case, either on Circuit or in the Appellate Court, to claim a consideration of the ground Tie has passed over <md lost. See the opinion of Chancellor Harper in Britton v. Johnson, Dud. Eq. 28. A party who brings up a partial appeal loses every ground of appeal then existing which he neglects and leaves behind him, and cannot afterwards stir the objections lost by his supineness or acquiescence. The court is constrained to say that this objection comes too late. The report of the commissioner was made in 1842. Many exceptions were taken, but no objection was made on this ground. So far as the exceptions made were not sustained that report became the judgment of the court. The door of litigation must at some time be closed.” Huson v. Wallace, 1 Rich. Eq. 1.
Considering the matter now agitated as necessarily embraced in the report of the referee, and determined by ther orders therein, was it error to refuse to set aside that judgment and order it re-examined ?
The application cannot be considered as made under the act now repealed, “ To vacate and set aside erroneous judgments,” for the'reason that it was not made within two years after the judgment rendered. It cannot be considered as made under Section 197 of the code, for the reason that said section was intended only for the relief of parties who, by reason of some “ mistake or inadvertence,” etc., may have lost the opportunity of being present at the trial, or to be represented there, and for the additional reason that the motion was not made within one year. As an application for a new trial upon subsequently discovered evidence, the Circuit judge had no right to entertain the motion after the remittitm- from the Supreme Court on the judgment, covering the point decided, had gone down to the Circuit Court. Cothran v. Knox, ante, p. 207.
But, finally, it is urged that this motion was an appeal to the large equity jurisdiction of the Circuit judge sitting as chancellor; that as long as the cause is still pending, and the court in possession "of the fund, it is competent for the court. *265to correct any error wbicb may have occurred, and to make any order necessary for the correct ascertainment of the rights of the parties. There is no doubt that.the Court of Equity, in the interest of justice, exercises large powers before a matter has been finally decided, as in the case of Gist v. Gist, Radley’s Eq. 343, but that court does not undertake to ignore the principle of adhering to former decrees. On the contrary, some of the strongest cases on the subject originated in that jurisdiction. No case has been cited where the Court of Equity, after the court of„ last resort had finally decided a matter, has for any reason whatever disregarded the well-established principles of res adyudicata.
From the view which we take it is not necessary to touch the merits of the application, but we may say that where an appeal is made to the court to put forth its extraordinary chancery power's and grant equitable relief, the party may with propriety be required to submit to the rule which makes it necessary to do equity in order to get equity. In such case the appeal does not proceed upon strict right, but is addressed to the equitable conscience of the judge, which will not be exercised except for the purpose of preventing a manifest wrong. As stated in the case of Gist v. Gist, supra,, “the court is always reluctant, where the ease is in its power, to exclude any apparently just claim or defence.”
In this case the Circuit judge was not impressed with the equity of the claim. Without reference to the legal defence of payment, if the company had seen fit to make it, and insist upon the transaction as it. appeared on the books, and not as it really existed, we concur with the Circuit judge that the equities of the parties who made the advances to take up the coupons in this case are substantially the same as they were in Ketchum v. Duncan, 96 U. S. R. 659.
What Chief Justice Waite said in Claflin v. The South Carolina Railroad Company, 8 Fed. Rep. 118, may not be inappropriate here: “ The next question is whether, as beJ tween the bondholders and the Syndicate, the coupons were bought or paid. I shall not undertake to recapitulate the evidence on this point, but content myself with saying that the *266evidence, as I think, brings the case clearly within the rule laid down by the Supreme Court in Ketchum v. Duncan. Certainly there can be no claim of bad faith on the part of the Syndicate. . . . The arrangement was in every respect fair and honorable. All the members of the association were directors and members of the finance committee of the board. They were to be paid nothing for their' services or the risk they assumed. So far as it appears, they were in no condition to be personally benefitted by what was done, and in all the mass of testimony not a.word is to be found reflecting on their integrity in the matter. There is nothing whatever in the case to show that the transaction was anything else than a laudable effort on the part of the directors to tide the-company over what was supposed to be but a temporary embarrassment, brought about by an unexpected falling off of business, with the hope that upon a revival of business a disastrous failure might be avoided. The bondholders have lost nothing. The money they got when they gave up their coupons is certainly worth as much as their security under the mortgage would be to them now.”
So much of the Circuit decree as relates to the subject under consideration is affirmed.
VI. The next question is as to certai/n debts contracted by the receiver, and called i/n the Circuit decree “ Claims of Material Men.”
The referee reported that the accounts against the receiver were classified as follows — viz., 1. Notes payable, $4311.62; 2. Open accounts on ledger, $4116.97; 3. Transient creditors, $6796.35 ; 4. Pay-rolls, $2368.53; 5. Balances due connecting roads, $5728.24; -and recommended that they be paid from the proceeds of sale.
The Circuit judge confirmed the report and ordered them first paid. The fourth item, including amounts due to employees on the “ Pay-rolls,” was paid by consent of all parties ■on account of the necessities of men who earn their daily bread; but the payment of the other claims is strenuously resisted on the ground that the functions of the receiver, Mitchell, were limited to “income,” and that miscellaneous *267debts contracted by bim are not chargeable on the corpus in preference to the mortgages, unless specially provided for in his appointment or subsequent order of the court.
The doctrines relative to the rights and duties of railroad receivers, and debts contracted by them, are comparatively new. They have grown up with the growing importance of railroads within the last few years, and even now are only in the process of development. Some principles, however, may be regarded as settled, but there are others still in controversy. It may be regarded settled that the receiver is merely the executive officer of the court; that his custody is the custody of the court, and that he has no inherent powers independently of the court expressly authorizing acts, or approving them when done. We believe it to be also settled that the court, having taken possession of a railroad, has certain duties to perform, and, among others, will see to the liquidation of all proper debts contracted by its express order or authority; but we are not aware that it has been precisely settled as to what debts contracted by a receiver outside of his express authority the court will undertake to provide for, and more especially in a case where there is no “income,” and the property out of which they are to be paid is already under mortgage. ^ _ ■ .
^ _ In this case it is admitted that there is no “ income,” and it is proposed that certain debts contracted by the receiver shall be first paid — not out of any receiver’s fund from profits, but out of the proceeds of sale, thus giving them an equity over the mortgage bondholders. The .order appointing Mitchell receiver did not give him the right to contract debts and charge them upon the corpus. It contemplated income, and provided that “the net proceeds, after paying all necessary expenses, including such accounts, if any, that may be due the employees and officers,” should be applied quarterly to the payment .of certain mortgage debts. We agree with the referee that “ it would require a very liberal construction of this order to interpret it as intending that the necessary expenses, including the accounts due the employees and officers for services, should Repaid out of any other fund them the profits of the *268road.° If the amounts now due by the receiver are at all chargeable upon the fund arising from the sale of the road now in the hands of the court, such cliargeability must arise from some other authority than that contained in the order appointing the receiver.”
This would seem to dispose of the whole matter, but it is strongly urged upon us that these are meritorious claims, and have a special equity on account of their character; that the order appointing the receiver gave him authority “to hold, work, and manage the road with the greatest possible skill and economy,” and that having done so, producing debts instead of profits, the court should take care of its own officers, and order them paid out of the property mortgaged to others. It was the duty of the receiver to keep his current expenditures within the current income, and if he could not do so he should have reported to the court, and asked leave to contract debts on the faith of the property. This would have given the parties in interest an opportunity to be heard upon the question whether a receivership should be continued which was not clearing expenses.
Many authorities have been cited as to what are proper allowances in a receiver’s account, which are undoubtedly correct ; but none of them, so far as we can discover, clearly mark the line which is important between “ income” and “ corpus.” When general reference is made to the “receiver’s fund,” or the “ trust fund ” in the hands of the court, or “ funds to the credit of the suit,” we infer that the funds meant arose from “ income,” as nothing else can with any degree of appropriateness be called the “ receiver’s fund.”
The referee rests his judgment on the case of Cowdrey v. Railroad Company, 1 Wood, 336 (also reported in 11 Wall. 459, and 3 Otto, 352), and the Circuit judge relies on the authority of Myer v. Car Company, 102 U. S. 13. In both these cases questions were discussed as to what -expenditures should be allowed the receiver out of the “ trust fund ” under the control of the court, or out of “ the fund to the credit of the suit;” but it does not appear whether such “ trust fund ” arose from “income” or the sale of the property. These cases *269do not decide the precise question here, and, therefore, can give us little assistance. We may concede that under the authority of these cases, and others, these claims would be allowed if there was a fund from “ income” out of which to pay them; but there is no such fund, and the question recurs, Shall they be paid out of the proceeds of the mortgaged property against the protest of the mortgagees ?
In this vague state of the authorities, we are obliged, though with some hesitation, to render our own unaided judgment on the'subject. A mortgage has a lien upon the property itself, but,' without special provision, no lien upon the income. The mortgagor is entitled to the use and rents and profits until an order of foreclosure. He may use this income in working the property, paying current expenses, or in any other way; but he lias not the power to give any liens upon the corpus for any purpose whatever, even that of cultivating or operating the property itself, which will postpone liens already fixed upon it. Any debts he may contract must take their place behind liens already resting upon the property. There may be cases where the court will declare an equity on account of additions made to the value of the property; but such are exceptional cases, and proceed upon different principles. When the court takes the place of both the mortgagor and mortgagee, and takes possession of an insolvent railroad by appointing a receiver to preserve it and make it profitable pending litigation, it has been established as a rule to allow the receiver, to pay the necessary expenses of running the road, including damage to persons and property inflicted in so doing, out of the income in his hands called the “receiver’s fund.” Ex parte Brown, in re Gibbes v. G. and C. R. R. Co., 15 S. C. 518.
This is manifestly just, as the mortgage only covers the ■corpus, and the mortgagee has no right to the income until current expenses are paid. It would clearly be inequitable to ■allow the receiver to use the labor of the employees and then turn over all the fruits to the mortgagees, leaving them' unpaid. In administering this equity, the courts have gone so far in providing for the payment of current expenses as even to recall any income that may have been paid to the mort*270gagees, and in that way temporarily diverted from the payment of the expenses.
Chief Justice Waite, in the case of Fosdick v. Schall, 9 Otto, 251, thus states the doctrine: “ The income out of which the mortgagee is to be paid is the net income obtained by deducting from the gross earning s what is required for necessary operating and managing expenses, proper equipments, and useful improvements. Every railroad mortgagee, in accepting his security, impliedly agrees that the current debts made in the ordinary course of business shall be ]y&i(Lfrom the current receipts before he has any claim upon the income. If, for the convenience of the moment, something is taken from what may not impropei-ly be called the cu/rrent debt fund, and put into that which belongs to the mortgage creditors, it certainly is not inequitable for the' court, when asked by the mortgagees to take possession of the future income and hold it for their benefit, to require, as a condition of such an order, that what is due from the earnings to the current debt shall be paid by the court from the future current receipts before anything derived from that source go to the mortgagees.”
But it seems to us that as a general rule this equity must be limited to the existence • of income. The very fact that it is thought necessary to invoke the doctrine of diversion, shows that in this respect there is a difference between “income” and “corpus.” As the mortgagor himself could not contract debts to displace liens upon the corpus, it is not clearly per ceived how the court can give that effect to debts contracted by the receiver, who has nothing whatever to do with the finances of the company except the money which arises from the “ income.” Possibly the court might do so in an extraordinary case, where it clearly appeared that the debt was contracted at the instance of the mortgagees and for their benefit, but not in an ordinary case of excess of expenditures over income, without express authority to contract debts upon the faith of the property. “ The extent of this power is measured by the absolute necessity of the expenditure for the protection of the property of which the court has taken charge.” Jones on Railroad Securities, § 542.
*271The possession of a railroad by a receiver changes no right of ownership; perfects title to no part of it; gives no new or additional right to any part; but is merely a holding by the same title, subject to the same contracts, limitations, and conditions under which the railroad company held the property at the time the court took possession. It is said in the case of Fosdick v. Schall, supra, that “ the court will do what — if a receiver should not be appointed — the company itself ought to do.” It is true that in the same case it is also said that “ while ordinarily this power is confined to the application of the income of the receiver, cases may arise where equity will require the use of the proceeds of the sale of the mortgaged property in the same way,” etc. ■ What cases were here referred to we do not know; but, without going into that, it is enough to say that we see nothing in this case which takes it out of the category of ordinary cases, in which the receiver, without the express authority of the court, has contracted debts, having no income in his hands to pay them.
We have no reason to doubt that these are meritorious claims, and regret that there are no “profits” out of which they could be paid. If it were proper for the court to express a wish, it would be that they could be paid, but they are not receiver’s certificates issued by the express order of the court for a particular purpose. _ They are simply debts contracted with the receiver, limited in authority, of an insolvent railroad, known to be covered with mortgages and not making expenses. We are not satisfied that there is any principle which would authorize the court, overlooking the terms of its previous orders, to transpose legal priorities and order these debts paid out of the proceeds of property bound by prior mortgages.
So much of the Circuit decree as orders the claims against the receiver to be paid out of the proceeds of sale in preference to the mortgage bondholders, is reversed. And this disposes of the claim of Daniel Green for damages for a horse killed and mule injured by the train, while the railroad was under the control of the receiver. If the damage was negli*272gently done, tliis claim ranks as high as other debts of the receiver ; but it is not a lien to take priority, and there is no “ receiver’s fund ” out of which it can be paid.
YII The claim of Chandes T. Mitchell for cost of construction of the Bee's Ferry extension. Upon application of the receiver, Charles T. Mitchell, on July 11, 1877, Judge Eeed ordered: “That the said railroad company be and hereby is authorized to construct, or cause to be constructed, a new track from the John’s Island Station to Bee’s Ferry, and to ■ build a suitable bridge over the Ashley river at that point, as recommended in and by the report of Mr. Gadsden, and at a cost not exceeding the estimate appended hereto ($32,816.20). “ That the cost of said track and bridge be paid out of the surplus income of the road, after paying current expenses, repairs, and other charges already upon it; and the same when built and paid for at the cost of construction, shall be-subject to and covered by the present liens according to their priority, etc., as shall any agreement with the Ashley Biver Company, or other persons for the use of their property.- And until the works hereby ordered shall be paid for, in the manner provided aforesaid, they shall be and stand as a security for such persons as shall funmish material or construct them, or shall advance, or loan money, for such material and construction,” etc.
Most of the attorneys representing mortgaged bondholders assented, but James Conner, owning $11,500 of six per cent bonds, objected to this order and appealed from it. The Supreme Court stating that “the propriety of the order can only be considered as it regards parties who did not assent to it,” adjudged that “ the order as to the appellant must be set aside.” 10 S. C. 411.
Notwithstanding the decision of the Supreme Court that the alleged authority to the receiver was without the approbation of the court, the work of constructing the new track and bridge went on, and the money used for that purpose was furnished chiefly by the South Carolina Loan and Trust Company and the First National Bank of Charleston. It was advanced -on notes of the company indorsed by Mitchell individually. *273No money was paid towards the extension out of the surplus income of the road, as the order directed, but the debts remained unpaid and were growing by the accumulation of heavy interest.
■ On July 11, 1879, Mitchell filed a petition in the case praying for the payment of the moneys lent to him for the aforesaid purposes. The banks which had loaned the money ■answered the petition, putting forward their claims, and James Conner, a bondholder, also answered, objecting. It was referred to master Clancy “ to ascertain and report the amount ■expended for the construction authorized by the order, and what amount is due upon the lien thereby created,” etc. Master Clancy reported, that the cost of construction was $12,911.11. Mitchell excepted, and Judge Pressley filed a decree fixing the amount due on “ the lien claimed by the petitioner at the sum of $12,911.11, with legal interest thereon from October 1, 1877, when the work was completed.”
It seems that after having the cost ascertained as above, Mitchell proceeded no further in his effort to foreclose his lien on the extension considered as a sepa/rate piece of property. On January 9, 1880, the whole road “included in the several deeds and mortgages proved in these cases,” was ordered to be «old. An appeal was taken, which was dismissed. 13 S. C. 469. On January 7, 1880, the road was sold for $300,200. At the sale, no notice of any kind was given by the claimant, Mitchell, or any one else. It was referred to master Porter to report whether, under the sale made, the Bee’s Perry extension and bridge were sold, and what proportion of the purchase money Bee’s Perry junction and bridge bears i/n value to the whole road. Master Porter reported that the extension and bridge were included in the sale, and that the said branch had been in operation about two and one half years previous to the sale, and also “that upon the whole testimony his conclusion is that the extension and bridge added to the road a value equal to the cost of construction, and that the cost is the proper measure of the proportion in value it has to the purchase money of the whole road.”
To this report exceptions were filed, and Judge Mackey *274ordered that “ $42,941.14, with interest from October 1, 1877, be paid from the proceeds of sale to the South Carolina Loan and Trust Company, the First National Bank, and The People’s National Bank, in proportion to the debts which they held of the receiver under the lien, any surplus to be paid said receiver, C. T. Mitchell. As to the costs and expenses incurred by the receiver in defending this order of the court, he ought to be fully protected, and these should, therefore, be paid, together with the debt, from the proceeds of the sale, m preference to other claims,” etc.
The question now is, Was this error ? Under a former order of the court, Mitchell had been appointed receiver, “ to hold, work, and manage the road,” and after discharging current expenses, to pay “the net profits” to certain mortgage bondholders. It can hardly be necessary to say, what has been so often held, that the objects for the appointment of a receiver are temporary in their character. It is not intended that the receiver should be permanent, and like the owner of property, look to remote advantages, or make permanent improvements ; but simply preserve the property and make it profitable pending litigation. The receiver, as such, has no power or duty outside of the order of the court. See 10 S. C. 407, supra.
It is manifest that the order appointing Mitchell receiver did not authorize any such expenditure as that for the Bee’s Ferry extension. Judge Reed’s order of 1877 did in terms give such authority. That order, however, was granted, without reference, upon the consent of the counsel representing most of the bondholders, and was declared by the Supreme Court to have been improvidently granted, was set aside as to James Conner,.the party contesting it, and left undisturbed as to the other parties, only for the reason, that being a consent order, it was in effect simply the agreement of the consenting parties. Mitchell, therefore, in building the Bee’s Ferry extension, was not really acting as receiver, under authoritative orders of the court, but as agent of the consenting bondholders.
“ When the object of, a receivership has been accomplished, *275and the occasion for it no longer exists, but it is nevertheless continued in form and manner, by consent of the parties in interest, the managing party is not regarded as a receiver, in the sense of the law, but as having the character and office of an administrator of a trust, by agreement of the parties. Consequently, the debts contracted by such manager, although having the formal sanction of the court, cannot be established as receivership liens, but are debts which are tiens upon the trust property, under the common doctrine that disbursements and expenses properly made are entitled to payment out of the trust property. A decree entered by consent after the occasion for a receivership has ended, for a new and continuing system of tenure and management, does not make the manager the officer and representative of the court, but merel/y the agent and representative of the parties. . . . It is fundamental in every idea of receivership that the court is to have the active and responsible control of the administration. That was not so in this case; but, on the contrary, the whole course in general and in detail was devised and executed by the managers and their associates, without any supposition that the court had any real office to perform, calling into exercise judicial judgment, direction, or control.” Jones on R. R. Sec., §§ 548, 549.
So we might say in this case. The Supreme Court not only set aside the order of Judge Reed, so far as it was contested, but afterwards declined to adopt the policy of endeavoring to make additions and improvements of a permanent character through the receiver, as the officer of the court. Of this all the parties had notice, and it cannot fairly be claimed that the court is responsible for the result.' Exporte Mitchell, 12 S. C. 83.
Considering Mitchell as the agent of the consenting mortgagees, he failed to perform the agreement, both as to the amount of the cost and paying it “ out of the surphus i/ncome of the road.” There is no income, and he now asks to be paid for his entire outlay from the proceeds of the sale of the whole property. The mortgage bondholders insist that their agreement was made on conditions, which have not been com*276plied with, and that Mitchell, having failed to perform his part of the agreement, is entitled to no compensation; that as soon as the extension was built, it became part of the road, and the old lien extended over it, and the road having been sold as a whole, he may have a claim against the company for work done, but no security therefor.
¥e cannot accept this view to the extent claimed. There can be but little doubt that Mitchell made a valuable improvement to the property, and we think that he had by this agreement of the consenting mortgagees a Hen on the road he built, according to the terms of the consent order, which provided that “ vnUl the works (describing them) shall he paid for in the manner aforesand, they shall be and stand as for a security for such persons as shall furnish material or constr'uct them, or shall advance or loan money for. such material and construction,” etc. It is true, as matter-of law, that the old liens stretched over the extension as part of the road; but we think it did so subject to the lien of the builder above provided for.
At the sale of the property under the order of court, Mitchell did not object to the extension being sold as part of the road. The whole road, including the extension, was sold, and he has an equity to share in the proceeds of the sale to the extent that the branch built by .him enhanced the price which the whole road sold for. We do not mean that he is entitled to what the extension cost, for it is rare that a railroad brings at public sale half the original cost, nor that he is entitled to receive a theoretical estimate of its real abstract value; but the proportion of the purchase money which was produced by his part of the property. If the whole property unfortunately sold for less than its true value, we do not see why he should not be required to share in the sacrifice. He had a case pending in court to sell separately the branch extension, on which he had a lien. He did not, perhaps could not, insist upon a separate sale, but acquiesced in the sale of the whole, which thereby became in part his sale. It was as if the owners of two adjoining lots of land should agree to sell them together, or as if the 'sale had been made for partition between Mitchell and the consenting bondholders as tenants in common, having un*277equal interests — the bondholders owning the old and Mitchell the new road.
As was said in a former judgment of this court, in this very case, in regard to another local lien created after the mortgages, and substantially analogous to this : “ It cannot be doubted that a railroad corporation may mortgage after to be acquired property. Dunham v. Railway, 1 Wall. 259; Pennock v. Coe, 23 How. 117; Pierce v. Railroad, 24 Wis. 551. . . . But to hold that a railroad company may make a. mortgage of land to be acquired so as to defeat a purchase money mortgage of land subsequently acquired, stands on an entirely different footing, and cannot be admitted. The Charleston and Savannah Bailroad Company having given a purchase money mortgage for the land, no obligation or lien affecting that company or its property can be interposed prior to such purchase money mortgage. The mortgage of Trenholm and Potter was properly upheld by the decree as a first lien as to such mortgaged properly. So far as it regards that portion of the mortgaged land that was requisite for the use of the railroad as such, the claims of the estates of Trenholm and of Potter must be confined to ihefimd arising from the sale of the railroad as a whole, and for that purpose there should be an inquiry to ascertain what ratable proportion of the whole fund arisingfrom such sale would properly represent the relative value of that portion of the mortgaged land.” 12 S. C. 365.
In this view there-was error in the order of reference upon this question, and it should be recommitted to ascertain what ratable proportion would properly represent the relative value of the old road cmd the extension considered only in reference to the purchase money of the whole.
~We have seen that the Bee’sJFerry extension was made by agreement with certain mortgagees, acting through a consent order of court. James Conner gave no consent at any time, and his interest was expressly excepted in the contract with Mitchell. Under these circumstances the court cannot exclude him against his protest from the full share that he may be entitled to in the whole proceeds of sale.
*278It is always embarrassing for this court to attempt to adjust costs and counsel fees, which more appropriately belong to the Circuit Court. It seems to us, however, that in this case there should be some system upon the subject, and that the costs and fees of all the attorneys properly chargeable for successful services should be paid out of the common fund, so as to make the successful litigants pay their proper proportion.
VIII. The only remamvtig question is that in. reference to the taxes claimed Try the state.
1. The original act of incorporation of 1853 exempted the company from taxation for thirty-six years. 2. The act of 1856, which created the statutory lien to secure the bonds of that date, prohibited the old company from conveying to any person whatever any lien or incumbrance which should come in conflict with said lien. 3. The act of 1866 incorporating the new company required that it should pay the bonds of 1856/and exempted its property from taxation without limit as to time. 4. The act of 1869, purporting to postpone the lien of 1856, contained a provision that the act should not take effect until the new company consented to an amendment of its charter so that its property should be subject to taxation in conformity with the constitution. 5. This act has been declared unconstitutional, but before it was so declared the company, upon the faith of its provisions, had formally accepted it as an amendment of the charter, and that its property should be subject to taxation after January 1st, 1870, at which time the reconstruction of the road was to be finished.
The referee in his first report held that the state had no right to postpone the lien of 1856, and, therefore, no right to exact the payment of taxes, which was the condition upon which the postponement was made. The postponement being beyond the power of the legislature, the exaction of taxes is beyond its right. The Circuit judge concurred with the referee; but on appeal the Supreme Court, after discussing only the question of fact as to whether the road was really furnished January 1st, 1870, held as follows: “ It' is evident that this arrangement [with another railroad running into Savannah] put in exercise the franchise of the defendant *279corporation to carry passengers and freight, for hire, to its full extent; that is, from the city of Charleston to the city of Savannah. Whether the defendant corporation chose to build and own or lease their right of approach to Savannah, is immaterial to the question of completion within the meaning of the act of 1869. Under such circumstances, the exemption claimed by the defendant corporation cannot be sustained by any reasonable construction of the act of 1869. That portion of the decree that sustcvms the imposition of the taxes should he ajfrmedP
When the case went back, the referee and Circuit judge both interpreted the opinion as being a judgment agcvmst the state as to the taxes, and upon exceptions the point comes again before this court. What is the proper construction of the judgment of the Supreme Court ? It is contended on one •side that the Circuit decree is in express terms “ affirmed,” and on the other, it is insisted as confidently that the intention was to reverse the Circuit decree. The then chief justice, to whom it was assigned to write the opinion of the court, ■though generally so accurate, overlooked the character of the Circuit decree which did not sustcvin the imposition of the taxes, but the contrary. The reasoning, which was confined to the subject of the completion of the road, seems to indicate one view, and the conclusion another, and, inasmuch as it is impossible to say with judicial certainty what was adjudged, we will consider the question as undecided.
The act of 1853 incorporating the old company, exempted its property from taxation for thirty-six years, and expressly exempted it from the forty-first section of the act of 1811. Under this charter the bonds of 1856 were issued. If the same company had remained in possession of the property and there had been no further legislation, there can be no doubt that both the company and its mortgage creditors could have insisted on the exemption as a contract. Whether that exemption was a privilege or a franchise it was such a vested •right as a subsequent legislature could not repeal. “ It has been held that the legislature has the power to bind the state in relinquishing its power to tax a corporation. It has been *280held that such a provision in the charter of a corporation constitutes a contract which the state may not subsequently impair. These doctrines have been reiterated and reaffirmed so recently as the year 1871 in .an opinion delivered by Mr. Justice Davis, in the case of the Wilmington Railroad v. Bird. They must be considered as settled in this court.” Humphrey v. Pegues, 16 Wall. 249. Assuming this to be settled, we think nothing has occurred sufficient to change those original rights so far as the bonds of 1856 are concerned.
But it is said that the old company to whom the exemption was given has passed away and its property gone into other hands; that the purchasers formed themselves into a new company, chartered in 1866, and that this was practically a forfeiture of the charter and ended the exemption. We do not think that a statutory exemption from taxation, under which as a contract rights have vested, is a mere personal privilege which ends with the ownership of the first taker, if the property, although in other hands, is continued in the same use on account of which the exemption was granted. Besides,, in this case, the new company took the place of the old. “ The company hereby formed shall assume and be liable for the payment of the six per cent i/nterestbecvri/ng bonds, whenever the guarantee of the state has been indorsed, and the lien of the state is in every respect preserved and hereby reaffirmed.” The charter of the new company also contained a provision exempting the property from taxation indefinitely.
It is insisted, however, that there has been still another act, that of 1869, which gave to the new company the right to contract a new debt for $500,000, and in order to make it the first lien, pushed back the six per cent bonds already issued,, and in consideration of this great boon required the company to give up their exemption from taxation, which they did in form, and in consequence of that relinquishment their property has been legally subject to taxation since 1870. It does not seem to us that this view is sound, for several reasons. In the first place, it is more than doubtful whether the company, that is to say, the stockholders, had the power to give up the exemption without the consent'of those who held bonds under-*281the act of 1856, and which they had received on the faith of the provisions of that act. It would seem a remarkable instance of vested rights doubly violated, if the security afforded to the six per cent bonds by the exemption from taxation of the property mortgaged could be given up upon the consideration of a still greater wrong, the postponement of the lien itself. But, without pursuing that, the conclusive answer is that the act of 1869, which required the relinquishment, having been declared to be unconstitutional, the scheme of postponement failed. The part of the act which gave a benefit to the company as it appeared, and which induced the relinquishment under a mistake, turned out to be a nullity, and the matter remains as if the act of 1869 had never been passed. The consideration of the relinquishment having failed, the state cannot insist upon its enforcement, but must leave the matter as it stood before the act, which failed of its purpose.
It is urged, however, that the consideration of the act has not failed entirety, for the reason that it is still enforced as to some parties, and for particular purposes. No part of the act, so far as regards the provision for postponement of the bonds of 1856, has been enforced from any inherent force which it has as a legal enactment; but only from the conduct of parties in particular cases. So far as the state is concerned, the whole provision which undertook to postpone the sixes was,, and is, absolutely void. If the act of 1869 was, as declared, unconstitutional, so far as it undertook, with the consent of the company, to postpone the six per cent bondholders in regard to their lien on the property, why was it not also unconstitutional so far as it undertook, with the like consent, to repeal the exemption from taxes? The bondholders had as certainly a vested right in that exemption from taxation as they had in the property itself under their lien. It was not tangible property, but it concerned the value of tangible property. It added largely to their security. The holders of these bonds purchased them upon the assurance that the property covered by the statutory lien would not be reduced in value by the imposition of taxes on it. Bor this they had the plighted faith of the state, and they are entitled to have it *282in that condition against either an attempted relinquishment of the new company, or an effort to repeal it by the legislature.
Upon this question, the case of Furman v. Nichol, 8 Wall. 44, is in point. The exemption in the charter was not personal, but attached to the bonds, just as if the original charter under which they issued were printed on the back of each bond. The state cannot be sued, and on that account should be only the more prompt to do justice, and scrupulous to keep faith. ¥e cannot see that the state has any claim for taxes on the property of the company as against bonds issued under the act of 1856, which are unaffected by estoppel.
The judgment of this court is, that the judgment of the Circuit Court be modified so as to conform to the conclusions herein announced.