DILLON, Circuit Judge.
In 1S31, and at. various times between that year and 1855, the general assembly of the state of Missouri passed acts loaning the credit of the state to the Pacific Railroad, to the. Southwest Branch thereof, to the Hannibal & St Joseph Railroad, to the Iron Mountain Railroad, and other railroad companies. The present case relates alone to the (Missouri) Pacific-Railroad, whose line extends from St. Louis to Kansas City. The object of the legislation was to secure the completion of the roads. The form in which the aid was extended was this: The state made its bonds, promising to pay the amounts thereof to the company or its order, with coupons attached; and by the act “the faith and credit of the state were pledged for the payment of the interest and the redemption of the principal of the said bonds.” Act of February 22, 1851 (Laws 1851, p. 265).
The company was, by the act, to make provision for the punctual payment of the interest and principal of the bonds so issued by the state, so as to exonerate the state from advances of money for that purpose. To secure this undertaking on the part of the company, the act provided that the net tolls and income of the road should be pledged for the payment of interest, and that the acceptance of the bonds by the company “should become and be, to all intents and purposes, a mortgage of the road of the company, and every part and section thereof, and its appurtenances, to the people of the state, for securing the payment of the principal and interest of the sums of money for which such bonds shall, from time to time, be issued and accepted as aforesaid.”
This was to be the first lien, or mortgage on the road, and it was further provided by the act that if the company should make default in the payment of either principal or interest, no more bonds should be issued to it, and it should be lawful for the governor to sell the road and its appurtenances, at auction, to the highest bidder, on six months’ notice; or to buy in the same, at such sale, for the state, subject to such disposition of the road or its proceeds as the legislature might thereafter direct. Act of February 22, 1851.
Under these provisions as to security, it is admitted in the bill, that state bonds were, from time to time, issued for the benefit of the Pacific Railroad, to the extent of $7,000,-000. The answer asserts that the amount thus issued was over $10,000,000. The acts of the legislature referred to would seem to show that about $10,000,000 of bonds were issued to the Pacific Railroad, but part of this amount was for the Southwest Branch (now the Atlantic & Pacific Railroad), and secured on that road alone, leaving $7,000,000 to the Pacific road proper. It is not regarded as necessary on this application to determine whether the averment of the bill or of the answer as to the exact amount of bonds issued to the Pacific Railroad is correct.
In 18G4, the road not being completed, the legislature of Missouri authorized the company to borrow $1,500,000, payable in four, five, and six years,'and to secure it by a first lieu on the road west of Dresden — the state waiving, for this purpose, and to this extent, its priority of lien.
In 1866 the road was finished and put in running order to the west line of the state, but in order to effect this the company had, in 1865, received aid from St. Louis county to the amount of $700,000. On the 31st day of March, 1868, the act was passed the validity of which so far as relates to its fifth section is the only question which this case on its merits presents. At this time the road is stated in the bill to have been in bad condition as to repairs and equipments, and the com[1021]*1021pany owed a floating debt of $1,092,848, an unadjusted debt of about $200,000, and the first instalment of the Dresden bonds, amounting to $500,000. Of its stock, $3,-014,500 was held by citizens and municipalities of Missouri — over $2,000,000 by St. Louis city and county, or tax-payers therein. The company had failed, since July, 1S59, to pay interest on the state bonds.
Meanwhile the new constitution of the state had been adopted, which went into effect July 4, 1805. In the body of the constitution (article 11, § 15), is this provision: “The general assembly shall have no power, for any purpose whatever, to release the lien held by the state upon the railroad.” In addition to this a constitutional "ordinance for the payment of state and railroad indebtedness” had been adopted which went into effect June 0, 1SG5. This ordinance provided for the levy of a heavy annual tax upon the Pacific Railroad and other roads, to be “appropriated to the payment of principal and interest now due, or hereafter to become due, upon the bonds of the state, or the bonds guaranteed by the state, issued to the aforesaid railroad companies.”
By the fourth section of the ordinance it is provided, that “should either of said companies refuse or neglect to pay said tax as herein required, and the interest or principal of any of said bonds, or any part thereof, remain due and unpaid, the general assembly shall provide by law for the sale of the railroad and other property, and the franchises of the company that shall be thus in default, under the lien reserved to the state, and shall appropriate the proceeds of such sale to the payment of the amount remaining due and unpaid from said company.” And the fifth section of this ordinance provides that “whenever the state shall become the .purchaser of any railroad, or other property, or the franchises sold as hereinbefore provided for, the general assembly shall provide by law in what manner the same shall be sold for the payment of the indebtedness of the railroad company in default, but no railroad or other property, or franchises purchased by the state, shall be restored to any such company until it shall have first paid in money, or in Missouri state bonds, or in bonds guaranteed by the state, all interest due from said company; and all interest thereafter accruing shall be paid semi-annually in advance, and no sale or other disposition of any such railroad or other property, or their franchises, shall be made without-reserving a lien upon all the property and franchises thus sold or disposed of, for all sums remaining unpaid; and all payments therefor shall be made in money or in the bonds or other obligations of the state.”
"With these provisions of the constitution and constitutional ordinance in force, and in this condition of the company as respects its road and its indebtedness to the state and to others, the legislature passed the act of March 31, 1868. Laws 1868. p. 114. This act is entitled “An act for the sale of the Pacific Railroad, and to foreclose the state’s lien thereon, and to amend the charter thereof.”
“Sec. 1. The governor is hereby directed ■ and required to sell the Pacific Railroad and ■ its appurtenances, and all property belong- ! ing thereto, in accordance with the provisions ! of section 5 of this act, and an act entitled ; ‘An act to expedite the construction of the ! Pacific Railroad and of the Hannibal & St. j Joseph Railroad,’ approved February 22, i 1851.
| “Sec. 2. Upon the sale of the road, as provided in the foregoing section, the price and the sum for which the same shall be sold shall not be less than eight millions and three hundred and fifty thousand • dollars, payable to the state treasurer, in bonds of this state or in money, within ninety days from the date of sale. No bid, except the bid of the governor on behalf of the state, shall be accepted, unless there is paid to the state treas- ; urer, who shall attend the sale, an amount ; of not less than three hundred thousand dollars in such bonds or money, as a part of the i purchase money, to be paid when the road is j stricken off; and such bonds or money shall j be forfeited to the state in case the purchaser j or purchasers shall fail to pay the amount i of purchase money bid within the time above j provided for. Such sale shall take place at : the east front door of the court house, in the city of St. Louis, between the hours of ten o’clock in the forenoon and four o’clock in the afternoon.
“If said sum of eight millions three hundred and fifty thousand dollars is not realized at such sale, the governor shall, by himself or agent, buy in the same for and in the name of the state of Missouri.”
Section 3 is not important in the questions before the court.
“Sec. 4. Upon the payment' of all the pur-I chase money as specified in section 2 of this act, and upon the delivery of an obligation in conformity with section 3 of this act, the governor shall execute a deed to the purchaser or purchasers, conveying all such right, title, and interest, in and to said Pacific Railroad, its franchises, appurtenances, and the property belonging thereto, as are subject to the lien of this state.”
Then follows section 5, which is the one on which the principal question made in this case turns:—
“Sec. 5. If the Pacific Railroad shall, at any time within ninety days after the first day of April, 18GS, pay into the treasury of the state the sum of three hundred and fifty thousand dollars, in the bonds of this state or in money, then, and in that event, the governor shall not advertise said road for sale; and if the said company shall, within ninety days thereafter, pay into the state treasury an additional sum equal to five millions of dollars in all (tiie same being either in cash or Missouri state bonds), the governor shall, upon the [1022]*1022production of the receipts of the state treasurer for said amounts, execute and deliver to the said Pacific railroad company a deed of release for all claims, title, and interest, which the state of Missouri has in and to the said Pacific Railroad, its property and appurtenances; and the said Pacific Railroad Company shall, from and after the delivery of said deed, be fully discharged from all claims or debts due to the state, and all liability growing out of the issue of the bonds of the state to aid in the construction of said road, and no sale shall, in that event, take place under this act. If, however, for any cause, the said company shall be unable to pay the additional sum as herein provided, the governor shall proceed to advertise said road; but if the said company shall, during the pendency of said advertisement, pay into the state treasury the additional sum, with interest thereon from the first day of October, 1S6S, at the rate of six per cent. ,per annum, then, and in that case, no sale of said road shall lake place, and the governor shall execute and deliver to the said Pacific Railroad Company the deed of conveyance and release provided for in this act, and the said Pacific Railroad Company shall be exempt from all the liabilities and obligations herein specified; but in case the said company shall, after the payment of three hundred and fifty thousand dollars above stated, fail to pay the additional sum specified (being the remainder of the five millions), then, and in that case, the sum first paid shall be forfeited to the state.”
It is admitted that the company within ninety days paid into the state treasury the $350,000, and within ninety days thereafter, the balance of the $5,000,000, and received a deed from the governor in pursuance of the act releasing and discharging it and its property from all liens and claims on the part of the state, and from all liability growing out of the issue of the bonds of the state to aid in the construction of its road.
In order to retire the Dresden bonds and to raise the $5.000,000 to be paid to the state aud to put its road in repair, the company, on July 15, ISOS, made a mortgage to the plaintiffs as trustees, to secure $7,000,000 of bonds. This mortgage recites the act of March 31, 18GS, and it was the professed intention to make it after the payment of the $5,000.000 to the state, and upon payment of the Dresden bonds a first lien on the entire Pacific road, its property and franchises. Subsequently, on July 1, 1871, a second mortgage was made by-the company for $3.000,-000, the proceeds of which it is alleged were exclusively used in improving the road and in purchasing rolling stock. Both of these mortgages are outstanding and unpaid, as also another mortgage for $800.000 secured upon certain lands in St. Louis purchased for depot purposes.
In March, 1873, the general assembly of Missouri adopted a concurrent resolution reciting that grave doubts had arisen as to the constitutionality of the act of March 31, 186S, and directing the attorney general of the state “to institute and prosecute all suits and other proceedings at law and in equity requisite and necessary for the purpose of testing and causing to be determined by the supreme court of the state of Missouri, the constitutionality of said act, and to institute and prosecute such suits and proceedings at law and in equity as may be requisite and necessary to protect and enforce all the rights, interests, and claims of the state against the Pacific Railroad (of Missouri).”
Under this authority, the governor, by the advice of the attorney general and his asso-cite counsel, has resolved to proceed, not by suit, but by advertising the road and its appurtenances for sale under the original statutory lien in favor of the state. This proceeding on the part of the state authorities assumes that the fifth section of the act of March 31, 1808, is unconstitutional; that the statutory lien of the state is yet in full force, and that it is the first lien on the Pacific road, its property, and appurtenances; and if this assumption is well founded in point of law. the proposed sale, if made, would cut off the mortgage to the plaintiffs, and the rights of the holders of the seven millions of bonds'seeured thereby. On the other hand, if the fifth section of the act of March 31, 1808, is not unconstitutional, then the state has no lien to be enforced, and the proposed sale, if made, would be wholly nugatory.
On the merits, the controlling question in the case, therefore, is, whether the fifth section of the act of 1SG8 violates some provision of the constitution or constitutional ordinance of the state.
Before reaching this question, some objections of a preliminary nature to the case made by the bill must be determined.
1. It is insisted by the attorney general of the state and his associate counsel that the plaintiffs have no sufficient authority, interest, or title, to enable them to maintain this suit or ask the relief sought. The plaintiffs are the trustees of the bondholders under the mortgage of July 15, 1808, for $7,000,000. The .bondholders are numerous and widely scattered, and the plaintiffs holding the title to the railroad and property mortgaged to secure the bonds have a right, as representing the bondholders, to apply for judicial intervention to have the respective rights of the state and of themselves settled before any sale is made or attempted. If they are right in the position they take in the bill the state is wrong, and has no right to sell the road or offer to sell it. The effect of advertising the road for sale by the governor, under the advice of the attorney general and the able counsel associated with him, could not be otherwise than seriously to depreciate the value of the bonds secured by the mortgage to the plaintiffs; and this injurious effect would be greatly increased if a sale were [1023]*1023actually to be made In advance of a legal determination of the respective rights of the parties.
2. The next objection relates to the parties defendant.
It is insisted that “the governor and attorney general of Missouri cannot be enjoined in the federal court from proceeding under the statutes of the state to foreclose the state lien, unless those statutes are in conflict with the constitution of the United States.’’
This statement of the objection, taken from the brief of the learned counsel for the state, concedes, by implication, that if the statutes of the state do conflict with the federal constitution then the federal courts may, in a proper case, enjoin the agents or officers of the state. The mere fact that a state officer, whatever may be his grade, is a party, does not defeat the equity jurisdiction of the United States circuit court, although the state may be the real party in interest, and cannot, as such, be brought before the court. This was decided by the supreme court of the United States in the case of Osborne v. Bank of U. S., 9 Wheat. [22 U. S.] 783, and the doctrine has been frequently reaffirmed. It was asserted and applied by that tribunal during the present year, in the case of Davis v. Gray [16 Wall. (83 U. S.) 203]. The cases are there cited by Mr. Justice Swayne, and there is no call upon us to go over the same ground. In the case before us the state of Missouri is asserting simply the right of a creditor, or lien-holder, and not any right in her sovereign character. In the language of the supreme court of Missouri, “The govern- or, in the sale of the roads, is not acting in his political or executive capacity; he is not carrying out any of the powers delegated by the constitution: he is simply acting as a special agent, in obedience to power committed to him by an act of the legislature, which saw proper- ■ to intrust him with the particular function; but it might have devolved the duty upon any other person as well.” State v. McKay, 43 Mo. 599.
If .the fifth section of the act of March 31, 1SC8, is constitutional, it. and the proceedings had .under it, and the deed of the governor, do constitute a contract between the state of Missouri and the company, which is under the protection of that provision of the constitution, of the United States which prohibits a state-from passing “any law impairing the obligation of contracts.” Article 1, § 10. If that contract is valid, or the deed of the governor in 186S to the company is effectual, any attempt by the governor, under the concurrent resolution of March 21, 1S73, to enforce a lien which was satisfied, wrnild be in violation of the rights of the company and its mortgage bondholders, and presents a fitting and proper case for the cognizance of the federal tribunals.
3. We are thus brought to the substantial question in the case, viz: the constitutionality of the fifth section of the act of 1868. We proceed to notice the several grounds upon which the state claims this section to be in violation of the constitution. It is urged that it is void because it was a special law, in contravention of the last clause of section 27 of article 4 of the constitution, by which it is provided that “the general assembly shall pass no special law for any case for which provision can be made by a general law, but shall pass general laws providing, so far as it may deem necessary, for the cases enumerated in this section, and for all other cases where a general law can be made applicable.”
It is a sufficient answer to this objection to state that this is not one of the enumerated cases, and that the supreme court of the state of Missouri has recently decided that it is for the legislature, and not for the courts, to determine when a general law can be made applicable: State v. County Court of Boone Co., 50 Mo. 317. And such seems to be the prevailing view elsewhere taken: Cooley, Const. Lim. 129, note; Dill. Mun. Corp. § 26, and cases cited.
It is next insisted that the fifth section of the act of 1S6S is void, because it violates section 32 of article 4 of the constitution of Mis-, souri, which provides that “no law enacted' by the general assembly shall relate tó more than one subject, and that shall be expressed in the title; but if any subject embraced in an act be not expressed in the title, such act shall be void only as to so much thereof as is not so expressed.” The title of the' act of 1S6S is, “An act for the sale of the ^Pacific Railroad, and to foreclose the state's. lien thereon, and to amend the charter thereof.” Similar provisions exist in many of. the state constitutions, and they have been often construed to require only the general purpose (which must be a single one) of the statute to be fairly indicated by its title. Cooley, Const. Lim. 141-144; Dill. Mun. Corp. § 28, and cases cited. Different and incongruous subjects are not brought together in the act of 1868, but the provisions as to the sale of the road, and the foreclosure of the state's lien thereon, relate to but one subject within the meaning of the constitutional provision, and this subject is expressed in the title. The manner in which the lien of the state may be foreclosed will be considered hereafter.
It is next urged that the statutory lien in favor of the state was reserved by it, not exclusively for its own indemnity, but for the benefit of the holders of its bonds, and therefore the state, holding the lien merely as a trustee for its bondholders, could not release such lien while its bonds were outstanding, as they still are. None of the holders of these bonds are here, and it is not needful that we should inquire what equities they might have should the state refuse to pay them, and should they apply for relief against the railroad company or its property. I am inclined to think, however, that the form of the transaction indicates the intention of the parties. The state issued its bonds, and these [1024]*1024were negotiated and taken upon the state's “faith and credit,” without any accompanying security. To indemnify itself, the state provided for, and received, a mortgage upon the road of the company, and a pledge of its net tolls and income. Then comes the further provision that the companies shall punctually pay the interest and' principal of the bonds, but if they fail to do so, the state may sell the road to others, or buy it in itself, to be thereafter disposed of as the legislature may direct.
It could not be maintained, we think, that if a sale were made by the state to a third person, that he would take it subject to a lien in favor of the holders of the bonds of the state. Such a view seems to be inconsistent with the provisions of the act under which the aid was given, and the lien reserved to the state, with the provisions of the fourth and fifth sections of the constitutional ordinance, as expounded by the supreme judges (37 Mo. 129, 134), and with the entire state legislation on the subject of disposing of roads purchased by the state under the lien reserved to it. The judges, in their answer to the governor, distinctly say, that “when the state becomes the purchaser of the railroad, under the lien reserved, both the lien and the former company are extinguished. The state remains liable for her own bonds, and owns the railroad, and the state may sell it without reserving a lien for the whole indebtedness of the former company, but only for the unpaid balance of the purchase money.” 37 Mo. 134.
But the principal objection to the fifth section of the act of March 31, 1868, is, that it. is in conflict with section 4 of the constitutional ordinance, and with section 15 of article 11 of the constitution, before quoted. The constitutional ordinance, in the event of the default therein specified, directs that “the .general assembly shall provide by law for the sale of the railroad, and other property.- and the franchises of the company that shall be thus in default under the lien reserved to the state.” Section 15 of article 11 of the constitution is, that “The general assembly shall have no power, for any purpose whatever, to release the lien held by the state upon any railroad.”
By force of these provisions, it is insisted by the counsel in the interest of the state: (1) That the state legislature is thereby: prohibited from making or authorizing any sale, unless by public auction; (2) that such sale must be for the whole amount of the' .bonds of the state; and“(3) that the sale or disposition to the company, under the fifth section -of the act of ISOS, of the interest of the state under its lien is a release of the lien contrary to the fifteenth section of the eleventh article of the constitution, above quoted, and that it would be so, even .though the state should receive from the company the full. value of the property and interests covered by its statutory mortgage.
In neither the fourth nor the fifth sections of the constitutional ordinance, nor in the body of the constitution, can be found any provision fixing the price at which the roads shall be sold, either to third persons or to the state, and if bought by the state, at what price they shall be resold to others. Of this opinion, it seems, were the state supreme judges, for, in their official answer to the governor, they say: “If the state could never sell the road without reserving a lien for the whole indebtedness of the former company to the state, she might never be able to sell at all, and so be in a worse condition than she was before.” 37 Mo. 134. There being no restriction in the constitution or organic law as to the amount at which the roads might be sold, it follows that this was a matter wholly within the control of the legislature, and that counsel are mistaken in supposing that any sale by the state must be for the whole amount of bonds issued or guaranteed by the state, and the interest thereon. No such construction, so far as I can discover, has ever been adopted in any legislative act, but always the contrary one; and sales for vastly less than the lien of the state have been legislatively authorized or confirmed, and such confirmation approved by the supreme court. See, on this point, the case of State v. McKay, 43 Mo. 594, relating to the sale by the state of the Iron Mountain road. Accordingly this very act of March 31, 1S08, provided, if $8,350,000 should not be bid or realized at the sale, that the governor should buy in the road in the name of the state; and the state, in case a sale was made, assumed $700,000 and interest due on the bonds issued by the county of St. Louis, and also $650,000 of the floating debt of the company. The state therefore authorized a sale of this road for $7,000,000 net, which was confessedly some millions less than the amount for which the company is liable on account of the state bonds. It can scarcely be doubted if such a sale had been made that the purchaser would have obtained, as against the state, a perfect title, and yet the state would have received .but $7,000.000.
■ The practical effect of such a sale would have been to annihilate all the stock and all the interest of the stockholders in the road. The stock of counties and municipalities of the state, obtained in exchange for their bonds, would have been sacrificed, except the amount assumed for St. Louis county. The floating debt of the company, except the portion assumed by the state, would never have been paid.
But such a sale was not made, for by the fifth section of the act the company, in consideration of $5.000,000 paid to the state, received a “full discharge from all claims or debts due the state, and all liability growing out of the issue of the bonds of the state to aid in the construction of its road.” This left the corporation in esse — preserved the stock and the interest of the stockholders— and gave to the unsecured creditors of the [1025]*1025company the opportunity to obtain payment fi-om it. If it were in the province of the court to pass judgment as to whether it were better to have sold to others outright for $7,-000.000 net, with the consequences above pointed out, or to the company for $5,000,000, could we say that the legislature acted unwisely in adopting the fifth section?
In examining the transaction, we must look at substance rather than form — and in effect' it was a sale of the state’s interest to the company for $5,000,000. The legislature had the power to order a sale, and not being restrained by the constitution, it necessarily had the power to fix the price and terms of' the sale. It could have authoi'ized the sale for $5,000,000 to a third person — why not to the company for the same amount? There being no limitation in the constitution as to the price at which the general assembly might authorize the state to sell the road or to buy it in, or to re-sell it, the amount which the state would fix upon as the value of its security would, after all, depend upon legislative judgment. If the state had purchased for the $8,350,000 it might afterwards have sold it for any price it might see fit to take, whether more or less than that sum. The state agreed to take and did receive from the company the $3,000.000. The money was raised upon the moi-tgage and bonds which the present plaintiffs are here to protect. This mortgage was made and the money borrowed on the faith of the action of the state, and it was by this that the $5,000,000 were secured which was paid to the state and which it still retains. It was by this means that $1,500,000 of the Dresden bonds secured by a first lien on the west sixty-five miles of the road were paid. A second mortgage for $3,000,000 was made, and the money thus borrowed is alleged, and the answer does not deny the allegation, to have been used in ironing, repairing, and equipping the road. It is plain that this money was advanced on the faith of the legislation of 1868, and this appears on the face of the mortgage to the plaintiffs. These mortgages would have been worthless securities if it had been understood that the state still had a lien upon the road for the $7,000,000 and the nine or ten years’ interest thereon, and this fact the state must be taken to have known when it received the $5,000,-000, which was really the money of the bondholders and not of the company. Five sessions of the general assembly of Missouri met before any steps were taken to question the validity of the transaction in 1868; and it is manifest that that transaction cannot now be overthrown except by sacrificing the interest of men who have in good faith parted with their money on the strength of the legislation', acts, conduct, and acquiescence of the state. Looking back upon the transaction. I cannot say that the agreement to release the security of the state for $5,000.000 should, under the circumstances, and as respects the innocent moi-tgagees of the company, be held to be such a release as was forbidden by the constitution. The state had released or waived its first lien on the North Missouri Railroad, receiving no consideration therefor, and agreed to take a second lien. This was at or about the time the constitutional convention was in session, and undoubtedly it was such a transaction that was in the contemplation of the convention and the people when they adopted the provision prohibiting the state from releasing its lien on any railroad. It was not intended to prohibit the release of a lien for full value; and of such value the leg-isla tui-e was left to be the judge, and with its judgment the people of the state must be content; It is urged by counsel that this view makes the constitutional provisions of little value, since it leaves it in the power of the legislature to sacrifice the interests of the people by eoiTupt or injudicious bargains, and the court is appealed to to prevent the sacrifice which, it is claimed, the act of 186S decreed. But we have only to deal with the question of legislative power; and the legislature, as the representative of the state as a mortgagee, and as the representative of her other interests, has full power except so far as restrained by the constitution. If it had been thought that the legislature could not have been trusted with the sale or disposition of the state’s interest as to the amount to be received, undoubtedly additional restraints would have been imposed.
The state was not disabled from releasing its security on receiving full value for it, and of its value it was left by the constitution to be the judge — so left because there was nothing to restrain it.
I feel quite dear in the conviction that the equities of the bondholders under the plaintiffs’ mortgage are superior to those of the state, and on this ground (reserving all questions of rights as between the company and the state), and on the ground that in case of controversy as to priority of lien, the prioi'ity ought to be settled before an irredeemable sale is made, I award a temporary injunction; but with leave to defendant to move to dissolve it before Mr. Justice MILLER and myself, should he be present at the September term of the court in St. Louis, or before Judge KREIvEL and myself at the regular term at Jefferson City. Meanwhile, the issues may be made up and proofs taken under the rules.