91 F. 699 | U.S. Circuit Court for the District of Southern Ohio | 1897
(after stating the facts as above). The grant in the mortgage was, first, of “the railways, rails, bridges, and real estate * * * belonging to or held by said company.” Now, there is not a word here containing the slightest suggestion that these words refer to future-acquired property. In the absence of such .words, they must be construed to mean such property then in existence and owned by the mortgagor. The grant was, second, of “all the tolls, incomes, issues, and profits to accrue from the same or any part thereof.” This language limits the income, tolls, and profits to those accruing from “the railways, rails, bridges, and real estate” then in existence and owned by the mortgagor. To hold otherwise would be to ignore the plain effect of the words “to accrue from the same or any part thereof.” A vigorous argument has been made to sustain the claim that the words “income, tolls, and profits” manifest the intention of the mortgagor to mortgage the subsequently acquired extension of the railway, because income was necessarily future, and includes by implication the means of producing the same, and so would embrace after-acquired property from which such income could be derived. It is said that this is the necessary effect of the case of Coe v. Railroad Co., 10 Ohio St. 372. It was there held that the power to pledge property and income implied the power to pledge after-acquired property, because income would be derived from property then owned and to be acquired. The reason wliy the construction of the statutory power of a company in that case can have no application to the case at bar is that here the income pledged is expressly limited to that derived from the previously described railway and real estate, which, as already said, was the railway and real estate then owned by the mortgagor company. Whether income, tolls, and profits from such railways and real estate may include future to be acquired rolling stock and equipment needed to earn the income from the existing railway is a different question, and will be considered later. The grant, third, was cf. “all and singular, the cars and rolling stock.” This language; cannot be extended to include any more than the cars and rolling stock then owned by the mortgagor. The grant, fourth, was of the franchises and property, real and personal, of said company, including said leased railway. This included the franchises then owned by the mortgagor, except the franchise of its incorporators to be a corporation, and the then owned real and personal property of
It is further said that because, under the case of Coe v. Railroad Co., 10 Ohio St. 372, the mortgagor company had the power to mortgage its subsequently acquired property, and because the mortgagors granted what they did grant expressly “under and by virtue of the power and authority in them vested by the laws of the state of Ohio, and of all and every power and authority in them in any wise vested,” the mortgagor company must be held to have granted subsequently acquired property. This is an unwarranted use of the language quoted. All that these words can mean is that the mortgagors wish their act to be valid, and rely on every possible source of authority for the same. They do what they do by virtue of all of their powers, however derived; but an expression of a desire to validate the act cannot logically enlarge or change the character of the act as it is described in the words which follow, and which we have just been considering. It follows from what has been said that, unless the statutes of Ohio provide otherwise, the mortgage of Goodman covers the inclined plane, and only the railway, or so much thereof as is still in existence, extending from the inclined plane south to Fifth street, and from the inclined plane north to the Zoological Garden, and does not cover the extension of the railway from the Zoological Garden to Carthage.
Let v. recur now to the question left open,—as to whether the mortgage of the income to accrue from the railway then existing and owned by the mortgagor does not include subsequently acquired rolling stock and machinery used in connection with the railway to earn the income, profits, and tolls accruing therefrom. I think this must be answered in the affirmative. No tolls or income or profits could be earned from the railway without rolling stock and equipment. The mortgage of the income would give the mortgagee the right to take possession of the mortgaged railway upon condition broken, and take and enjoy the income, but no income could be earned without the rolling stock then in use upon the railway. As against the grantor, therefore, it must be taken that it intended to mortgage with its railway all the rolling stock owned by it and used by it during the existence of the mortgage from which it would earn an income subject to the mortgage. This is the effect of Justice McLean’s reasoning in Coe v. Pennock, 5 Fed. Cas. 1172, and of the case of Pullan v. Railroad Co., 4 Biss. 35, Fed. Cas. No. 11,461. See, also, State v. Northern Cent. Ry. Co., 18 Md. 193.
I do not think the statutes of Ohio give this mortgage an effect different from that it would have at common law. The section of the Revised Statutes of Ohio relied on is 3306, which is as follows:
“When a company desires to extend the line of its road beyond either of its previously designated termini, the president and directors of the company may submit the question of such extension and change of termini to a meeting of its stockholders, io bo called for that purpose, by notice published for four consecutive weeks in some newspaper in general circulation in each county through or into which it passes; and if the holders of the majority of the stock, in person or by proxy, so determine, the president and directors, or a majority of them, shall make a certificate of the fact, naming the places of the new terminus or termini of the road, and the county or counties through or into which the extended line will pass, and file it in the office of the secretary of state, and such certificate a.nd extension shall be considered and held to he a part of the original line of the road.”
The words of this section relied on are, “and such certificate and extension shall be considered and held to be a part of the original line of the road.” This section was passed March 20, 1875 (72 Ohio Laws, p. 70), as an act supplementary to the general railroad act of May 1,1852. The supplementary act was passed April 17, 1872, and is found in 69 Ohio Laws, p. 163. It is therefore to be treated as
There are certain other sections upon which reliance is had to support the contention of Goodman. Those sections are as follows:
“See. 3272. A company may, by a resolution adopted by a majority of its board of directors, at a meeting thereof duly called for the purpose, with the written consent of three-fourths in interest of its stockholders, change the line, or any part thereof, and either of the proposed termini, of its road; but no change shall be made which will involve the abandonment of any part of the road either partly or completely constructed; and any subscription of stock made upon the faith of the location of such road, or a part thereof, upon any line abandoned by such change, shall be canceled at the written request'of the subscriber not having consented thereto, filed with the secretary or other chief officer of the company, within six months after such change.
' “Sec. 3273. When any such change is made, the same shall be described in such resolution, a duly authenticated copy of which, under the seal of the company, shall be filed with the secretary of state, and by him recorded, with proper reference, on the record of the articles of incorporation of the company, and when so filed, such change shall be considered' as made, and shall be as valid and binding as if such changed line had been the line originally’described in such articles.
“Sec. 3274. When any such company has issued its mortgage bonds for the construction of its road, the record of the mortgage securing the same, in each county through or into which the changed line of the road passes, shall be as effectual to create a lien upon the changed line of road, and upon the property of the company, as if such mortgage contained a complete description of such changed line and of such property.”
They are the first, second, and third sections of “An act relating to changing proposed lines and termini of railroads,” passed April 7, 1876, and found in 73 Ohio Laws, p. 115.
In my opinion, the sections have no application whatever to the present case. They were intendedJiCL apply to a road which has been
For the reasons given, I am clearly of opinion that the statutes of Ohio have no bearing upon the construction of the mortgage to Goodman, trustee, and that within its four corners there is no language to be found which justifies the view that it covers anything more than the road which was owned and in operation at the time the mortgage was given, together with the fixtures, rails, poles, and wires since added thereto, the new equipment of the inclined plane, and such proportion of the rolling stock which has since been substituted for the rolling stock then in use as may properly be said to have been necessary to produce the income from the three miles of road which was mortgaged. The decree for sale under the amended bill of the complainant and the intervening petition of Goodman, trustee, may he prepared in accordance with the views herein expressed.