Higgins v. James C. Downward & Sons

13 Del. 227 | Del. | 1888

Lead Opinion

Saulsbury, Chancellor.

“ A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are imiportality, and, if the expression may be allowed, individuality; properties by which a perpetual succession of many persons are considered as the same, and may act as the single, individual. They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and endless necessity, of perpetual conveyance for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men in succession with these qualities and capacities that corporations were invented and are in use.” Chief Justice Marshall’s opinion in the case of College v. Woodward, 4 Wheat., 626. A franchise is a certain privilege conferred by grant from the government, and vested in individuals. Corporations or bodies politic are the most usual franchises known to our law. Bouv. Law Diet., 545. By Section 17, Art. 2, of the Constitution of this State, it is declared that "no act of incorporation except for the renewal of existing corporations shall be hereafter enacted without the concurrence of two-thirds of each branch of the Legislature, and without a reserved power of revocation by the Legislature; and no act of incorporation which may be hereafter enacted shall continue in force for a longer period than twenty years without the re-enactment of the Legislature, unless it be an incorporation for public improvement.” The Wilmington & Reading Railroad Company was a private corporation for public improvement, and therefore its existence was not limited to the period of 20 years under this provision of the Constitution. There was no time fixed by positive provision in the charter of the Wilmington & Reading Railroad Company when the corporation should cease to exist. Had there been, the corporation, in the absence of a renewal of its charter before that period, would have become dissolved without either a representative or the possibility of one, as no provision is made by our laws for a representative in such a case; and at the instant of its dissolution the debts due to it would have become extinguished, not the right to or the remedy for the debts suspended, merely, but the debt itself annihilated. Bank v. Lockwood’s Adm’r, 2 Har. (Del.), 14. A judgment, being No. 181 to the November term, 1869, was recovered by the Wilmington & Reading Railroad Company, a corporation then existing under the laws of Delaware and Pennsylvania, against the defendants. A fi. fa. was issued, being No. 224 to the November term, 1870, on this judgment, and levy made on goods and chattels. Subsequent executions were issued on this judgment, the last being an alias vend, exp., No. 92, to September term, 1887. On May 29, 1886, the judgment was marked for the use of the Wilmington & Northern Railroad Company, by the direction of the attorney of the plaintiff, and the judgment was afterwards, on June 12, 1886, marked for the use of John C. Higgins by direction of the president of the Wilmington & Northern Railroad Company. The defendants allege that at or about the year 1877 the Wilmington & Reading Railroad Company had ceased to have any legal existence as a corporation, or any right to perform or do any act whatever, and that the said judgment which had been recovered by it became void and of no effect.

The sixth reason assigned for setting aside the sheriff’s sale is that the transfers or assignments alleged to have been made by indorsements on the record, and by and through which the said John C. Higgins claims title thereto, were illegal, unauthorized, and void, and ineffectual to vest in said John C. Higgins any right or title whatever. This reason, so far as it relates to the authority of the attorney directing the judgment to be marked to the use of the Wilmington & Northern Railroad Company, is not before us; exceptions thereto having, for the sake of expediting the hearing of the questions reserved, been abandoned ; so that the real and only question before us is, was the Wilmington & Reading Railroad Company dissolved by the act in relation thereto passed February 22, 1877; or, in other words, did the Legislature, by passing that act, revoke the charter of the Wilmington & Reading Railroad Company. On the 3d of March, 1868, the Wilmington & Reading Railroad Company executed a mortgage upon its road, etc., for the payment of money. A suit was afterwards instituted in the United States Circuit Court for the foreclosure of this mortgage. The final decree in the case was made April 25,1876, directing the sale by the trustees of the railroad and property. The sale was made under the decree November 4, 1876. The deed made by the trustees to the purchasers conveyed “ the railroad of the Wilmington & Reading Railroad Co., extending from a point on the Philadelphia & Reading Railroad at or near Birdsboro, in the county of Berks, State of Pennsylvania, to the city of Wilmington, in the State of Delaware, with all the rights, privileges, immunities, and franchises of the said Wilmington & Reading Railroad Company, under any and all grants of the State of Pennsylvania, but exclusive of the franchises granted by the State of Delaware.” These franchises granted by the State of Delaware were not included in ■ the mortgage, for which foreclosure was decreed ; and of course were not included, but excluded, by the decree of foreclosure." They were not sold by the trustees to the purchasers of said road. Of course, therefore, the purchasers of said Wilmington & Reading Railroad did not by such sale become entitled to said franchises granted by the State of Delaware. On the 22dof February, 1877, the Legislature of Delaware passed an act to incorporate the purchasers of the Wilmington & Reading Railroad. This act, after reciting in its preamble that the railroad of the Wilmington & Reading Railroad Company, with its appurtenances, was sold in pursuance of a mortgage executed by said company under authority of laws of this State, and that it was necessary to the proper enjoyment of the rights acquired by said sale -that the purchaser should be incorporated with authority to consolidate with any company organized or to be organized under the laws of the State of Pennsylvania, operating such portion of the road so sold as is situated within the State of Pennsylvania, incorporated the persons purchasing the said Wilmington & Reading Railroad, under a decree of the Circuit Court of the United States for the Eastern District of Pennsylvania, a body politic and corporate, by the name of the “ Wilmington & Northern Railroad Company.” By this act the company were vested with all the right, title, interest, property, possession, claim, and demand at law or in equity of, in, and to such railroad, to-wit, the railroad of the Wilmington & Reading Railroad Company, with its appurtenances, and with all the rights, powers, immunities, privileges, and franchises of the corporation as whose property the same was sold, and which may have been granted thereto or conferred thereupon by any act or acts of Assembly whatsoever in force at time of such sale. These franchises, granted by the State of Delaware, not being included in the mortgage executed by the Wilmington & Reading Railroad Company, and consequently not sold under the decree of foreclosure thereof made by the circuit court of the United States for the Eastern district of Pennsylvania, the purchasers at such sale acquired no title thereto, and no property therein. If they acquired any such title or property it could only have been under and by virtue of the act to incorporate the purchasers of the Wilmington & Reading Railroad, before referred to. This act purported to vest such purchasers, among other things, with the privileges and franchises of the corporation as whose prop- * erty the same was sold, and which may have been granted thereto or conferred thereupon by any act or acts of assembly whatever in force at time of such sale.

The condition of a corporation whose charter has expired is not the same as that of a corporation which has failed to elect its officers, and, as the consequence of that failure, is rendered inactive. The life of the one is out of it by its own constitution, and not from a failure to do what its charter enabled them to do, to give them active being; the other was entitled by its charter to a continued active life, but it has failed to continue that activity by the election of its necessary officers. Its active powers, but not its being, are gone. The one is dead; the other is dormant. The principles of law which apply to the rights of a corporation thus dormant or disabled are not the same as those which are applicable to the'rights of a corporation which is dissolved, or civilly dead. In the former case debts due are extinguished; not so in the latter case. No judgment of ouster or other similar judgment, or judgment of like effect, has ever been judicially declared against the Wilmington & Reading Railroad. The act to incorporate the purchasers of the Wilmington & Reading Railroad did not in express terms revoke the charter of the Wilmington & Reading Railroad, nor necessarily deprive the latter of. its franchises granted by the acts of assembly of the State of Delaware. The Wilmington & Reading Railroad had never forfeited its charter as judicially ascertained by any judgment of a court of law; and even the.former act did not so declare. A franchise is property, and it cannot wantonly or of whim be taken away by a legislative act, and transferred to another. The act of February 22, 1877, must receive a reasonable interpretation. It must be interpreted to mean that which the legislature of the state of Delaware had a right to do, and not that which the legislature had not a right to do. The rights, powers, immunities, privileges, and franchises conferred by the legislature on the purchasers of the Wilmington & Reading Railroad must be intepreted to be such rights, powers, immunities, privileges, and franchises as those conferred by the legislature on the Wilmington & Reading fRailroad by any act or acts of the general assembly which the Delaware legislature had the right to confer, and to vest the same in said purchasers, because the legislature had the right to make such.a grant; but the legislature had no authority to take from the Wilmington & Reading Railroad rights, powers, immunities, privileges, and franchises, the same never having been judicially declared forfeited, nor revoked constitutionally by legislative authority. If the legislature had revoked the charter of the Wilmington & Reading Railroad, it could have granted rights, powers, immunities, privileges, and franchises of the same nature and kind as those which the Wilmington & Reading Railroad had theretofore possessed, but not the same identical rights, powers, immunities, privileges, and franchises, because the charter being revoked, it would follow that the rights, powers, immunities, privileges, and franchises ceased and determined, and were not the subjects of transference to another company by legislative grant. The words, “ of the corpóration as whose property the same was sold, and which may have been granted thereto or conferred thereupon by any act or acts of assembly • whatsoever in force at the time of such sale,” must be interpreted as having relation to what was sold, and not to that which was not sold, and could not have been legally sold under the said decree of foreclosure. According to this interpretation, the words used would have force and effect. A contrary interpretation would render the words of the act of assembly inoperative and void.

It appears from the case stated that the judgment in respect to which controversy exists in this case was on May 29,1886, marked for the use of the Wilmington <& Northern Railroad Company by Victor Du Pont, attorney for plaintiff, and on June 12, 1886, for the use of John C. Higgins, by direction of H. A. DuPont, president of the Wilmington & Northern Railroad Company. It also appears in like manner that there had been no meeting of the stockholders of the Wilmington & Reading Railroad Company after the sale thereof under the decree of foreclosure aforesaid. If these facts be so, the Wilmington & Reading Railroad as a corporation was not dead, nor the debts due it extinguished, so far, at least, as it existed under the laws of the state of Delaware. In this respect it was only dormant; capable of being revived, but incapable of action without such revival. Its lite or death rested with the legislature. The views above expressed in reference to extinct and dormant corporations are in accordance to the opinion of the court in the case of Bank v. Loockwood’s Adm’r. “ There, is,” says Morawetz, (Priv. Cbrp., §§ 1002, 1003,) “ a broad and fundamental distinction between the dissolution of the corporation and the loss of its franchise or legal right to exist. Much confusion may be avoided,” he says, “ by bearing in mind this distinction.” Again, he says: “ If the charter of a corporation limits its existence to a definite period of time, the franchise or right to exist would expire at the time limited.” Again : “ The franchise to exist and carry on business as a corporation continues indefinitely unless the time of its duration is expressly limited in the grant..” If the corporation should be guilty of any wrongful act, or neglect of duty, which would give the state a right to declare the franchise forfeited, the franchise would nevertheless continue until the forfeiture has been claimed and enforced by the state through the proper legal proceedings. The commission of a wrongful act or neglect of duty by a corporation would evidently not per se put an end to the actual existence of the corporate association. After a long-continued non-user it may be presumed that a corporation has surrendered its franchises to the state; but the mere fact that a corporation has been without officers or organization, and_ has performed no corporate acts during a number of years, does not put an end to its franchises, although this may be a good ground for declaring them forfeited by judicial proceedings. The charter of a corporation does not expire by reason of the omission or commission of acts on the part of the company for declaring a forfeiture; but the franchises continue in full force until the penalty of forfeiture is claimed by the state granting the franchise, and this can be done only through a legal proceeding by which the cause of forfeiture is judicially ascertained, and not in a purely collateral proceeding. Says Pierce, (R. R. 11:) “ The non-use or misuse of its franchises by a corporation, or its breach of the conditions on which its duration is by the law of its creation made to depend, is a cause of forfeiture. Such defaults, however, do not of themselves work a forfeiture, but they take effect only when judicially determined in a direct proceeding instituted for the purpose. A non-user or misuser is a ground of forfeiture although not expressly declared to be such by statute.” The same writer says: “ A cause of forfeiture which has not been judicially declared in a direct proceeding cannot be taken advantage of collaterally.” The legal modes of proceeding against a coporation for usurpation,—non-user or misuser of a franchise,—is scire facias, or an information in the nature of a quo warranta; each prosecuted' at the instance and on behalf of the state.

What becomes of the corporate property of a corporation in the event of its dissolution ? The court in the case of Bank v. Lockwood’s Admr’s, before referred to, say that on the dissolution of a corporation as by the expiration of the period of its charter, its real estate reverts to the grantor, its personal estate to the people, and the debts due to it are extinguished. This is doubtless so at the common law, and in a proceeding at law as a scire facias on a judgment; but the more modern doctrine upon this subject seems to be that the capital of a corporation becomes upon its dissolution a fund to be administered in equity for the payment of its creditors, and afterwards for distribution among its stockholders. The creditors have a lien on the assests, and may follow them into the hands of stockholders and persons who are indebted to the corporation. The rights of stockholders in the assests are subordinate to those of creditors. See Pierce R. R. 13, and authorities cited. In my opinion, when the constitution of this state speaks of the reserved power of revocation of a corporation by the legislature, it means an express revocation by the legislature, and not otherwise.

It will be seen from what I have already said that the judgment set forth in the case stated, being No. 181 to the November term, 1869, of the superior court, whether it be a valid and subsisting judgment or not, did not pass to the Wilmington & Northern Railroad Company by virtue of the acts of assembly, mortgage foreclosure proceeding, sale and conveyance recited in the ease stated, so as to give the said Wilmington & Northern Railroad Company the right to enforce said judgment by execution issued against the defendants, and that John C. Higgins, who claims to be the assignee of said company to said judgment, has not the right to enforce said judgment against the defendants.

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Concurrence Opinion

Comegys, C. J.,

concurring:

The questions which the case stated, as amended, presents for our opinion, are thus expressed in the record from the Superior Court for New Castle County :

Mrst.—Whether the judgment set forth in the case stated, being No. 181, to the November Term 1869, of the said Superior Court, is a valid and subsisting judgment.

Second.—If the said judgment is a valid and subsisting judgment, did the title to the same pass to the Wilmington and Northern Railroad Company by virtue of the acts of Assembly, mortgage, foreclosure proceeding, sale and conveyances recited in the case stated, so as to give the said Wilmington and Northern Railroad Company the right to enforce said judgment by execution issued against the defendant.

Although by the 20th section of the charter of the Wilmington and Brandywine Railroad Company, (12 Vol. Del. Laws, 142,) power was given it from time to time to borrow money for corporate purposes and to execute mortgages of all its estate real and personal, and to issue bonds to secure the payment of the sameand by the 3d section of the act consolidating that company with the Pennsylvania Company, making one company, and incorporating it as the Wilmington and Reading Railroad Company, it is provided that, by the consolidation and merger of the companies, they shall be one corporation possessing within this state all the rights, privileges, and franchises, and subject to all the restrictions, liabilities and duties of such corporations, companies, or railroads consolidated or merged,” yet the 6th and last section of such charter restricts the subject of mortgage to real estate of such consolidated company and like as such features in legislative acts are considered, may be taken to control the prior general provision. This seems to be the law as given at the close óf page 658 of Dwarris on Statutes (9 Law Lib.) But whether that be correct or not, the general power, in the charters of the components of the consolidated corporations could not properly be held in this state, to include debts or choses in action under the term personal estate; which, here, has beeñ considered, in its ordinary acceptation or meaning, to apply to corporal personal property— that is, moveable goods, or those chattels which a sheriff can levy upon with a fieri facias, which he can impound, and which he can sell and deliver to a purchaser: certainly a debt cannot be levied on with a fi, fa. Although a corporate franchise of toll may be subject to seizure by execution, yet this is a special provision of the statutory law of corporations, and does not affect the rule in any other respect. The decree of the Circuit Court of the United States in the suit against the trustees in the mortgage of the Wilmington and Reading Railroad Company to compel a sale of the mortgaged property, expressly excepted from its operation the Delaware franchise as not included in any power to mortgage given by the State. This favors the view that, by the 8th section of the consolidation act before quoted, nothing but real estate could be mortgaged under Delaware authority. That section is in these words: “ And that the said corporation may, from time to time, borrow money for corporate purposes and uses, and execute mortgages on all or part of their real estate, and issue bonds to secure the payment of the same.”

The only clause or provision, therefore, as appears to be the reasonable view to take, which clothed the Delaware and Reading Railroad Company (the consolidated company which made the mortgage) with power to bind itself by mortgage is that just quoted from its own charter. Whatever the mortgage could include, under that power was mortgaged to Trustees, and nothing more.

It is not simply a question of intention, where courts, dealing with transactions between man and man, will look beyond their mere letter, if the roles of law will allow them to do so, to reach their true purpose (their being no question of vires) ; but one only to be settled by language, taken in its obvious sense, when found in legislative acts. And no difficulty of interpretation, with respect to them, where they concern the powers conferred upon corporate bodies to borrow money, can arise, when there is constantly kept in view the fact that corporations have no inherent power, as such, to borrow money at all. They are supposed to be capable, out of the proceeds of the sales of their shares to subscribers, to provide themselves with all money necessary to promote the object of their creation. Hence it is, that power to borrow money and secure the payment of it, is made an express provision of such charters as create railroad companies and other trade corporations.

It being a rule of law, with respect to corporate bodies generally, that they have no powers but such as are granted to them expressly, or are necessarily implied as concomitants of the granted powers, I find nothing in that part of Section 6 (above quoted) of the consolidation act, which would justify us in holding that anything was intended to be made the subject of mortgage by the Wilmington and Reading Railroad Company but its real estate—its lands, tenements, and hereditaments.

This general view of the vires of corporations was in the mind of the Circuit Court of United States, no doubt, when it excluded from the operation of the decree the franchises granted by the State of Delaware. It is not pretended that they were sold. The roadbed and all upon it went by the sale : that is, the right (whatever it was) of the Wilmington and Reading Railroad Company to the land of its highway and everything upon or attached to it as part of the freehold, passed to the purchasers under the foreclosure sale, but nothing else under the authority of the Delaware act: for the decree could not operate in Delaware to subject to sale any property of its creation, or within its jurisdiction exclusively, but that authorized to be mortgaged by the act of February 7, 1866, viz : real estate. Neither a franchise, nor a chose in action, or any purely incorporeal right, depending for its existence upon Delaware law, could be the subject of a mortgage, confined by the terms of the power to make the instrument, to real estate. In this view, the purchasers of the property of the Wilmington and Reading Railroad Company, sold under the decree of the Circuit Court aforesaid, did not take the judgment against the Downwards. As there was no power by the act of 1866 to mortgage, or pledge, that judgment, it could not be a subject of the mortgage sale: therefore it remained, as before the sale, a judgment belonging to the Wilmington and Reading Railroad Company. ■ Now what was the effect of the sale, under the decree of the Circuit Court, upon the property of the Wilmington and Reading Railroad Company within this State ? That question I have already answered by stating that it did not touch the franchises of the company, nor a chose in action or any purely incorporeal right depending for its existence upon the law of this State. The argument of the learned counsel for the defendants raised no contention to the contrary of this : but they do insist that the effect of the sale was a virtual annulment of that company’s legal entity, and that the act incorporating the purchasers under the sale made by said decree, operated its entire extinction. In other words, they claim that, at the time of the transfer of the Downward judgment to the Wilmington and Northern Railroad Company (the new corporation) there was not in existence, for any purpose, thé Wilmington and Reading Railroad Company in whose behalf it was recovered : and, therefore, there could be" no authority given-to, or held by him who was the attorney of the company when it was a vital body, to make the transfer. The question is then presented—what effect had the sale, and the act incorporating the purchasers under it, upon the life of the Wilmington and Reading Railroad Company ? If they destroyed it, then, of course, all acts done in its behalf afterwards, or on its account, were pure nullities.

The counsel for the cestui que use, however, denied that the corporation of the Wilmington and Reading Railroad Company was defunct by such agency or influence; and argued to this effect, though by different language,—that nothing in and of this State exclusively, except the real estate of that company, could be touched by the sale; that every franchise or right it had- which was not necessarily involved in the sale of such estate, remained as its property: and ¡that' the act of the legislature incorpórating the Wilmington and Northern Railroad Company and clothing it with all the former company’s “ right, title, interest, property, possession, claim and demand at law or in equity of in and to such railroad with the appurtenances, and with all the rights, powers, immunities, privileges, and franchises of the corporation as whose property the same was sold, and which may have been granted thereto, or conferred thereupon, by any act or acts of the Assembly whatsoever in force at the time of such sale ” &c., did not divest the Wilmington and Western Railroad Company of any property whatever.

It is not contended by the defendant’s counsel that the legislature, in and by the act incorporating the Wilmington and Northern Railroad Company, intended to exercise its constitutional powers of revocation of charters. It is only reasonable to suppose that when such a course is intended in any case it will be marked by legislative language of purpose, direct and not inferential. While the Constitution makes no requirement of form, or method, for the act, yet, in view of the nature of such a stupendous power, and the consequences to flow or ensue from its exercise, a legislature (it is fair to presume) would not leave its purpose so uncertain as to require the aid of one of its own courts to ascertain and declare it. There would be some expression, in some form or other, that the act relied upon to create revocation, was intended for that purpose. I do not mean to "be understood as saying that the legislature may not ádopt its own method of revoking a charter : but I do believe the act would seem to the body to require expression of purpose to revoke, and would have such purpose distinctly put forth therein. And, looking at the subject in this light, I do not think any court of this State should yield to a mere inference of design to revoke, when language importing purpose of revocation is wanting. The proper view, I think, is, that the legislature, by the act of February 22, 1877, did not intend to revoke the charter aforesaid, but only that which is plainly expressed, as quoted above. Whether there was any power in that body to dispose of the property of the Wilmington and Reading Railroad Company, is a question, it would seem, not very difficult to answer. It is quite plain that the General Assembly which passed the act of February 22,1877, did not suppose that the sale by the Trustees under the decree of the Circuit Couft of the United States, passed anything more than the actual real estate of the Wilmington and Reading Railroad Company. This is evident from the preamble to the act, which is in these words: “ Whereas under and by force of a decree of the Circuit Court of the United States for the Eastern District of Pennsylvania, the Railroad of the Wilmington and Reading Railroad Company, with its appurtenances, was sold in pursuance of a mortgage executed by said Company under authority of the laws of this State, and it being necessary to the proper enjoyment of the rights acquired by the said sale, that the purchasers should be incorporated with authority to consolidate with any company organized or to be organized under the laws of the State ; of Pennsylvania operating such portion of the road so sold, as is situated within the State of Pennsylvania.

Therefore &c.”

The General Assembly were correct in this; for it was only real estate it had given the Company power to mortgage, and only that which could be sold in execution of the mortgage, or in fulfilment of the trust contained therein. But the legislature of 1877 undertook, in and by the act incorporating the purchasers under the sale by the United States Circuit Court decree, to"grant to the Company created the same property they had bought at the sale, that is, “ the railroad and its appurtenances,” and also “all the rights, powers, immunities, privileges and franchises of the corporation as whose property the same was sold, and which may have been granted thereto, or conferred thereupon by any act or acts of assembly whatsoever in force at the time of such sale ” &c. This, I respectfully submit, amounted of itself to nothing, so far as the railroad was concerned ; for the corporators owned that already. As to the other subjects of the intended grant,vas they were not capable of being sold under the decree, because not included in the mortgage, they remained the property of the Wilmington and Reading Railroad Company, only to be divested by State legislation in one of two ways—either by revocation of its charter, which in my opinion was not done by force of the act incorporating the new company, or any implication arising out of the above quoted langauge from it, or by exercising the right of eminent domain— which exercise is always by direct proceedings authorized for that purpose with provision for payment of the property taken. The act is alike silent as to revocation and taking by eminent domain.

It is very difficult to suggest any plausible reason even for the futile grant, except it be that the agent of the new company who framed the bill had not fully looked back into the legislation concerning the Wilmington and Reading Railroad Company to see what it was that the company had power to mortgage; or, if he had, that he had not considered that the franchises of the company were still left to it. As the language of the act quoted above is the samé precisely as that of the mortgage where descriptive of the property mortgaged, and of the deed also most probably to the purchasers, he might well have been misled by such language, and supposed that everything in Delaware, as well as in Pennsylvania, had been sold. But, as I have pointed out, the mortgage bound nothing in Delaware but «real estate, and of course the sale covered nothing else.

To make the clause of the act of 1877 above quoted a reasonable enactment (that is the duty of this Court, if it can find means of doing so) we might construe it as being intended to bestow on the new corporation like capacity and privileges, immunities, franchises, &c„, as those held by the Wilmington and Reading Railroad Company. But, however, we may think with respect to that, it is perfectly certain that the sale under the decree did not divest the company of anything but its real estate; nor could the clause of the new charter under consideration operate to that effect, for it neither revoked the former charter, nor did it provide for the exercise of the power of eminent domain with reference to the property not included in the mortgage. Adopting then what seems to be the true view—that neither debts, nor choses in action, nor franchises were, by Delaware authority, included in the mortgage of the consolidated company, they could not pass by any sale under such mortgage; and, in fact, did not pass by the sale made to the future corporators of the Wilmington and Northern Railroad Company on the 14th of December, 1876.

It does not appear by the case stated, nor was this Court informed in the argument when the debt was created by the Downwards upon which judgment in the Superior Court of New Castle County was recovered at the November Term, 1869. The mortgage, however, was made eighteen months before that time, and could not include the judgment; nor, upon the view that that instrument covered nothing but real estate, could the cause of action which supported the judgment have been embraced by it. And, independent of that view, upon the reasoning heretofore put forth, nothing incapable of manual tradition upon a sale by fi. fa. Could be considered as personal estate, the subject of mortgage. Mortgages of goods and chattels in Delaware were never made, much less formally legalized or recognized, until the act of March 23, 1877 (15 Vol. Del. Laws, 616).—Having thus determined that the judgment against the Downwards did not pass by the sale, by virtue of the decree of the United States Circuit Court to the purchasers of the Wilmington and Reading Railroad property, it remains to consider the other branch of the question submitted to this Court, which is—whether the said judgment is a valid and subsisting judgment ?

Reply to that question could easily be made by saying, as the judgment does not appear ever to have been paid or satisfied, it is necessarily valid and subsisting at law. This, however, would not answer the real ends of the case as presented to ns in the argument. Neither the learned counsel for the defendants, nor the counsel of the plaintiff, make any contention to the contrary of the view above taken of the mortgage sale; but the former contended that the effect of the act to incorporate the purchasers at such sale as “ The Wilmington and Northern Railroad Company ” was to extinguish and annul the existence of the old corporation of the Wilmington and Reading Railroad Company. They rely upon the phraseology of Section 1 of the act which grants to the former the property of the latter by this language “ all its rights, title, property, interest, claim and demand at law or in equity of in and to such railroad, with the appurtenances, and with all the rights, powers, immunities, privileges, and franchises of the corporation as whose property the same was sold, and which may have been granted thereto, or conferred thereupon by any act or acts of Assembly whatsoever in force at the time of such sale ” &c.

It is not pretended that the judgment itself was extinguished by the act of February 22, 1877—the first section of which in part has been quoted: the point made being merely that the Wilmington and Reading Railroad Company had no legal existence, and therefore could do no legal act, by attorney, or otherwise, at the time the transfer was made to the Wilmington and Northern Railroad Company. In reply to this it is sufficient to say that the first point has already been passed upon adverse to such view. The questions presented by-the case do not call for any expression on the latter.

Upon the facts as stated to us by the Superior Court of New Castle County, I am of opinion that for anything that has been shown to the contrary in the argument before us, the judgment in controversy is a valid and subsisting judgment: and that the title to the same did not pass to the Wilmington and Northern Railroad Company by virtue of the acts of assembly, mortgage, foreclosure proceeding, sale and conveyances recited in the case stated, so as to give the said Wilmington and Northern Railroad Company the right to enforce said judgment by execution issued against the defendant.