Ludlam may be subject, are to be surmounted; it is sufficient for my present purpose to show that there is nothing in the fact of such double allegiance to which my conclusion subjects him to demonstrate that such conclusion is unsound. No such difficulty would be likely to arise during his minority, and, on his arriving at maturity, he would have the right to elect one allegiance and repudiate the other, and such election would be conclusive upon him, and would doubtless be respected by the governments.

However this may be, the inconveniences of such double allegiance are rather theoretical than real. Practically the person so situated secures all the rights of citizenship, or at least the right of inheritance in two countries, and discharges the duties of allegiance in only one. The balance of advantages is decidedly in his favor: Halleck, ch. 29, § 4.

I am therefore of opinion that Maximo Ludlam was an American citizen at the time of the decease of his uncle, and is entitled to share equally with his sister in the proceeds of the lands of which their uncle was seised at the time of his decease.

The judgment of the Supreme Court should be affirmed.
All the judges concurring,

Judgment affirmed.

Supreme Court of Vermont, in Chancery, Rutland County.

MILLER AND KNAPP, TRUSTEES, ETC., vs. THE RUTLAND AND WASHINGTON RAILROAD COMPANY.

A railroad company being in want of funds to build its road, authorized its president to issue bonds secured by a mortgage on the road and its franchises. The president executed an instrument reciting his authority, and proceeding in his name as president to mortgage the road, &c., but he signed the instrument in his own name simply. Afterwards, the company issued two sets of bonds, secured by second and third mortgages in due form. The first bonds not having been paid when due, the trustees filed a bill to foreclose the mortgage, and thereupon it was Held, that

The corporation had a legal competency to pledge its credit for the procurement of rails for its road, and to secure payment by a mortgage. The instrument executed by the president in pursuance of the votes of the directors, although intended to take effect as the deed of the corporation, yet not being executed by or in the name of the corporation, cannot operate as its deed. The transaction in a court of equity is to be regarded as an equitable mortgage, and thus entitles the complainants, the holders of what was intended to secure the payment of the first mortgage-bonds, to their full right in equity to the said mortgage which was intended to be given.

The trustees under the second and third mortgages were the agents of the holders of bonds under such mortgages, and actual notice to said trustees of the equitable first mortgage, was notice to the bondholders, who therefore took their bonds subject to all the legal consequences of the existence of the said equitable first mortgage.

The corporation had sufficient right or interest in the subject-matter of the mortgages upon which said mortgage would lawfully be operative. The corporation was competent to convey by mortgage what the mortgage purports to cover and convey, viz., the road and its franchise, as now construed. The mortgage was designed to take effect upon the road, as it should exist under the rights of the corporation, at the time the mortgagees should succeed to its rights by virtue of the due enforcement of the mortgage.

There is no need of a preliminary decree for the reformation of the deed, and the court can give immediate effect to the instrument, as if it were reformed in pursuance of a decree of equity. The Court, therefore, grant a decree of foreclosure.

The Rutland and Washington Railroad Company, chartered in 1847, surveyed and located a railroad pursuant to its charter, and put it under contract for its entire completion, including land damages.

The contractors were to receive in payment shares of the capital stock at par, for all but $100,000, which sum was to be in money. They proceeded with the work, and when it became necessary to procure rails, it was found that the capital stock could not be made productive of the necessary means.

Thereupon the directors voted to modify the contracts by making provision for the issue of $250,000 of bonds, for the purpose of procuring the necessary iron, to be secured by mortgage upon the road and its franchises; which bonds the contractors might receive by substitution for an equal amount of stock; it having been ascertained by the officers of the company that such bonds would be received by the dealers in payment for the iron; and

one of the directors, as agent of the contractors, negotiated the purchase.

Bonds were issued accordingly; pursuant to votes of May 3d, 1850, May 4th, 1850, and June 25th, 1850.

Subsequent to this, December 10th, 1852, the corporation issued $550,000 of other bonds, and secured them by a mortgage upon the road and franchises and property belonging to it; $250,000 of which were designed by the parties to the transaction, to be used in retiring the first mortgage, and the residue to paying the other indebtedness of the company. The first mortgage bondholders did not assent to this arrangement in substitution for the bonds then held by them.

In 1855 the corporation made another mortgage, securing an issue of $1,300,000 of other bonds; the purpose of which was, by substituting the new bonds for the former issues, thereby to retire both the prior mortgages; and also to pay any other existing indebtedness of the company.

Most of the creditors and bond-holders, except those holding the first mortgage-bonds, came into the arrangement. The holders of first bonds declined to do so.

The instrument made by Clark in pursuance of the resolutions of May 4th and June 25th, 1850, recited those votes and proceeded in the name of Clark as president of the company, and by the power and authority vested in him by said votes, to grant and convey; and it is signed by Clark's name without addition or prefix.

The first mortgage-bonds thus issued and secured, not having been paid as provided, this suit is brought to enforce the security by foreclosure.

The cause was argued at the General Term of the Supreme Court, November, 1862, by Mr. Stoughton of Bellows Falls and Mr. Stoughton of New York, for the orators; by Judge Bennett and Mr. Phelps of Burlington, for the defendants; in behalf of whom also a printed opinion by Judge Redfield of Boston, was presented.

The cause

was held by the Court for advisement till the

February Term, 1864, of the Supreme Court in Rutland County, at which the opinion of the Court was delivered by BARRETT, J.1

It is now to be considered how the rights of the orators stand in relation to the second and third mortgages.

We assume, for the present, that subsequent grantees take and hold the estate conveyed, subject, not only to all legal incumbrances to which it was subject in the hands of the grantor, but to all equitable incumbrances of which they have notice. A case in point, as propounding and applying the principle is, Sumner vs. Rhodes, 14 Conn. 134.

The Court are convinced by the evidence, that all the trustees under the second and third mortgages, prior to and at the time such mortgages were executed and they became trustees, had notice and knowledge, in point of fact, that the first bonds had been issued, and that the same were secured by mortgage. All the circumstances and reasonable probabilities concur with the direct evidence, and leave no reasonable doubt of the fact.

This being so, they stand chargeable with the legitimate effect of the right, whether legal or equitable, which existed in virtue of the issuing of the said bonds with such security by way of mortgage as appertained to them; and that too, even though it were to be held, that the validity of that security depended upon acts of the corporation prior to the making of said second and third mortgages, by way of recognising and ratifying the act of the directors in the transaction constituting the creation of the security, and even though the trustees under said mortgages had not, in fact, knowledge of those acts.

When they had notice and knowledge of the issuing and existence of the bonds, and of their being secured by mortgage, if the fact existed, it had full operation and effect to subject the title which they took with such notice and knowledge to the legitimate consequences of that fact.

1 [We regret that the great length of the ease prevents our giving it in full, but we take pleasure in laying before our readers that part of Mr. Justice BARRETT's very able opinion which discusses the rights of the complainants in relation to the second and third mortgages.-EDS. LAW REG.]

The bonds, immediately upon being issued, having been received in payment for the rails, thereby became effective in the hands of the holders, with the fixed right in them to the security provided in that behalf; and it was not in the power of the corporation or of any of its officers, without the concurrence of such holders, to divest or affect that right by any act of theirs thereafter; so that, whatever was said or done by or in behalf of the corporation, through its officers, in respect to other bonds and mortgages as affecting the rights of the holders of the first bonds, or by way of making other provisions for the debt evidenced thereby, was entirely nugatory as against the holders of said first bonds.

They stood upon fixed and vested rights, over which the corporation had no control, except by paying said bonds. It makes no difference, as to the rights of the said bond-holders, what provision was made in this respect, either by means of, or under, the second or third mortgage, or whether the corporation, or its officers, acted in good faith or not in making or administering such provision.

It is now to be considered how such notice and knowledge on the part of the trustees under the second and third mortgages affects the title they hold, in view of the relation they sustain to the bond-holders under said mortgages respectively.

In Pierce vs. Emery, 32 N. H., p. 521, Ch. J. PERLEY says:"Notice to trustees, who take a conveyance for the mere purpose of upholding an estate, without having any previous connection with the title, is not always, nor perhaps usually, regarded as notice to the cestuis que trust. But the trustees under this act must be considered in the light of agents for the negotiating of the loan; they act for those who lend their money on the security of the mortgage; they are charged with the duty of protecting the interests of the bond-holders, who are unconnected individuals, having no ready means of acting together except through the trustees, whom the law appoints to act for them. Notice to the trustees would be all that could be given in this case."

It is well settled, as is said in Hill on Trustees 513, that, "Notice, either actual or constructive, will be equally binding, whether