UNITED STATES SUPREME COURT DECISIONS ON-LINE

A state is an indispensable party to any proceeding in equity in which its property is sought to be taken and subjected to the payment of its obligations.

The North Carolina subscribed in 1856 for capital stock in a railway company which had been incorporated by its legislature, issued its bonds with thirty years to run, sold them, and with the proceeds paid its subscription, and received certificates of stock therefor, which certificates it never parted with and still holds. In the act incorporating the company and authorizing the issue of the bonds, it was provided that, as security for their redemption "the public faith of the state . . . is hereby pledged to the holders, . . . and in addition thereto all the stock held by the state " in the railroad company "shall be pledged for that purpose" and that "any dividend" on the stock "shall be applied to the payment of the interest accruing on said coupon bonds." The state being in default in the payment of the interest due on the bonds since 1868, a clubjuris

Page 133 U. S. 234

bondholder, who was a citizen of Virginia, brought suit in the Circuit Court of the United States in the Eastern District of North Carolina against the Railroad Company, its president and directors, the person holding the proxy of the state upon the stock held by it, and the treasurer of the state, praying to have the complainant's bonds decreed to be a lien upon the stock owned by the state and upon any dividends that might be declared thereon, and that such dividends might be paid to complainant and to such bondholders as might join in the suit, and for the sale of the stock if the dividends should prove insufficient, and for an account, and for the appointment of a receiver, and for an injunction