Gettysburg Railroad

65 Pa. 290 | Pa. | 1870

The opinion of the court was delivered, July 7th 1870, by

Agnew, J.

The objection that the Supreme Court has not original jurisdiction in this case is unfounded. The Act of 11th April 1862, Pamph. L. 477, declares that this court “ shalFhave and exercise all the powers and jurisdiction of a court of chancery in all eases of mortgages given by corporations.” This power has been so often exercised in the sale of railroads, and interests of so much magnitude hang upon our decrees, the public would be surprised to learn that this act is unconstitutional. It falls, however, within the express terms of the 6th section of the 5th article of the state Constitution, authorizing the legislature to “vest in the said courts (Supreme and Common Pleas) such other powers to grant relief in equity as shall be found necessary; and from time to time to enlarge or diminish their powers or vest them in other courts, as they shall judge proper for the due administration of justice.” It belongs to the legislature to determine the necessity for enlarging our equity jurisdiction, and it does not lie with us, because a party may have a remedy at law in some shape, to say that the legislature cannot give him another, by means of a chancery proceeding. The legal remedy may be very inadequate, as it has been found to be in relation to corporation mortgages, involving the right of way and the franchises of railroad and similar corporations. It is no objection that the Act of 1862 was passed after the date of the mortgage. It interferes with no vested right and injures no one. It merely provides a new and a better remedy for the default of the company, more pliable, and adapted to protect the interests of all the parties: McElrath v. Pittsburg & Steubenville Railroad Co., 5 P. F. Smith 189, was a strong ease by reason of the remedy provided in the mortgage itself, and yet we held the Act of 1862 applicable to that case.

The 2d error is also unfounded. The Act of the 21st of February 1856, Pamph. L. 84, merely conferred an additional authority on the directors to mortgage the franchises of the road. Under the charter and the General Railroad Act of 1849, the corporation had power to borrow money and pledge all its property, rights and privileges for the payment. The substance of the thing, therefore, existed before. The mortgage in this case was executed on the 23d day of May 1857, and recorded on the same day. Bonds were issued under it, negotiated, interest paid on them, recognised by the sequestrator, and by auditors appointed to distribute funds in the sequestrator’s hands; and in almost every way the mortgage has been recognised as a valid and binding instrument down to the time of the application to make the sale under it. Under these circumstances there has been a clear recognition, by way of ratification at least, of the power conferred in the Act of 1856 : Angell & Ames on Corporations, 2d ed., 51 to 55; Gordon v. Preston, 1 Watts 387; Fell v. McHenry, 6 Wright 41.

There can be no doubt of the lien of the mortgage. It was duly executed, acknowledged and recorded, and the corporation acted upon its valid existence, as did others receiving bonds under it. The fact, therefore, that Swope, the mere trustee, had not manual possession of the paper does not invalidate it, or detract from its delivery in law. The evidence of such delivery is ample to carry the benefit of the trust to those for whose use the mortgage was intended: Miller’s Estate, 3 Rawle 317; Blight v. Schenck, 10 Barr 285; Stinger v. Commonwealth, 2 Casey 428; McKinney v. Rhoades, 5 Watts 343; Critchfield v. Critchfield, 12 Harris 100.

The master finds that Maltby is the absolute owner of the $112,000 of the bonds which had been hypothecated to secure debts of the company. ' The sale was made under a resolution of the company passed and carried into effect while McCurdy, the sequestrator, was a director. There seems to be some evidence of his assent to the sale. But whether this be so or not need not be decided; for Maltby, if a holder of the bonds, even as a collateral security only, would be entitled to press for a sale under the mortgage to make his security available.

Finding no error in the decree of the Court of Nisi Prius, it is affirmed, and it is ordered, that a decree be entered in the form drawn up by the master, filling the blanks, as follows: third section “thirty” days; fourth section, first blank, “four;” second blank, “thirty.” And omitting from the fourth section all that part beginning with the word “provided,” and ending with the words “ dividends payable thereon,” and inserting in liéu thereof the alternative part reported by the master; and the costs of this appeal are ordered to be paid by the appellant.