Mississippi Valley Co. v. Chicago, St. Louis, & New Orleans Railroad

| Miss. | Apr 15, 1881

Chalmers, C. J.,

delivered the opinion of the court.

This is an action of ejectment, in which the plaintiff claims title by virtue of an execution-sale under a judgment against the former owner of the property, and the defendant claims under a mortgage executed by the same owner. The mortgage was prior in date to the judgment, and, if operative on the property here involved, takes precedence of it. The property was not owned by the mortgageor (the New Orleans, Jackson, and Great Northern Railroad Company) at the date of the mortgage, but it is claimed that it passed as after-acquired property by virtue of the terms of the instrument. Whether it did so pass is the question presented. The granting clause of the mortgage conveys, or attempts to convey, all the property of the railroad then owned or subsequently acquired, in these words: “ All of its right of way, lands, property, franchises, rights, and appurtenances, and also all the buildings, structures, and improvements thereon, and all and singular,. the cars, locomotives, engines, warehouses, depots, machine-shops and machinery, fixtures, utensils, and effects of every kind, nature, and description whatever, in use upon the said railroad way, or in anywise attached or appertaining to the same, intending hereby to include all its present real and personal estate and franchises, now owned or hereafter to be acquired, without any exception or reservation whatever.”

Are the words, “ intending hereby to include all its present real and personal estate and franchises, now owned or hereafter to be acquired, without auy exception or reservation,” sufficiently definite and descriptive to pass the after-acquired property of the corporation? Certainly they are broad and comprehensive enough, but are they not too much so? That a natural person or a corporation may mortgage property to be subsequently acquired is now too well settled to require elucidation or citation of authorities; but neither by one nor the other can this be accomplished by words of a character so Vague aud general as to afford to creditors and subsequent purchasers no notice whatever of the property to be embraced. A very different rule obtains where future acquisitions are attempted to be mortgaged, from that which exists with refer-’ ence to property then owned by the grantor. A ' mán br a’ corporation may well mortgage “ all of its property theii: owned,” without further words of description, because the fact of present ownership serves as an indicator to point to' and identify the property. But neither a man nor a corporation can, by general terms only, mortgage — so far as subsequent purchasers and creditors are concerned — everything that it may thereafter acquire, through all time ; for this would be á mere pledge of its capacity of acquisition, and would afford no Sort of indication of what was to pass under the instrument.

- A deed of “ all my estate” or “ all my property” is good ( Wilson v. Boyce, 92 U.S. 320" court="SCOTUS" date_filed="1876-04-10" href="https://app.midpage.ai/document/wilson-v-boyce-89276?utm_source=webapp" opinion_id="89276">92 U. S. 320), but a deed of “ all the estate that I may hereafter acquire” is a nullity ; and while a court of equity might, perhaps, enforce a mortgage of such a character, as between the parties, after the acquisition of the property, it would be utterly voi'd as to third persons.

A. distinction is made by some of the authorities between mortgages of future acquisitions executed by railroad companies and similar instruments made by natural persons. It is. said that a mortgage of a railroad and its future property will carry all after-acquired property appurtenant to, and necessary for building and operating the road and carrying out the purposes for which it was created, while a similar instrument will be inoperative if executed by a private person. This is true if the mortgage executed by the private person is upon a specified piece of property, without reference to any accretions or additions to it, because there can be no accretions of property appurtenant to the person of the mortgageor ; but it is untrue if the individual has mortgaged his business and the property then appurtenant to, or afterwards to grow out of, and to be added by accretion to the particular business that is pledged. Thus, a natural person, equally with a corporation, can execute a yalid mortgage of a ship and the profits of its voyage, or of a factory and the machinery then in it and to be placed in it, or of a farm and the products to be produced upon it, or of a flock of sheep.and its natural increase and future-grown wool ; and so a railroad company can execute, in general terms, a valid mortgage of its road-bed and franchises, and all of its real and personal property then owned or thereafter acquired, provided the future acquisitions be such as belong naturally to the. business of constructing and maintaining the road and performing its primary end as a common carrier of passengers and freights. The things which may be deemed essential or useful, and therefore appurtenant, to the great work of building and operating a railroad, will frequently be more extensive and varied in their character than those which can properly be regarded as accretions to the business of private persons ; but the principle is the same, and, where the facts concur, the law must be the same as to both.

The mortgage in the present case would be clearly void as to the after-acquired property, for uncertainty of description, if it had been executed by a private person, without .reference to some enterprise, undertaking, or venture as to which the future property could be deemed an accretion. It is equally so when executed by a railroad company, if the property to which it is sought to apply it was not appurtenant to the busi-. ness of the company. When property is to be deemed appurtenant to a railroad enterprise, is discussed in many cases, a few of which we cite : Mosley v. Mississippi & Ohio R. Co., 52 Miss. 127" court="Miss." date_filed="1876-04-15" href="https://app.midpage.ai/document/mobile--ohio-railroad-v-moseley-7984632?utm_source=webapp" opinion_id="7984632">52 Miss. 127 ; 12 Wis. 649" court="Wis." date_filed="1860-06-15" href="https://app.midpage.ai/document/dinsmore-v-racine--mississippi-railroad-6598276?utm_source=webapp" opinion_id="6598276">12 Wis. 649 ; 25 Barb. 284" court="N.Y. Sup. Ct." date_filed="1857-07-14" href="https://app.midpage.ai/document/seymour--brown-v-canandaigua--niagara-falls-rail-road-5459300?utm_source=webapp" opinion_id="5459300">25 Barb. 284 ; 47 Pa. St. 465 ; 24 Ohio St. 28 ; 22 N.Y. 494" court="NY" date_filed="1860-12-05" href="https://app.midpage.ai/document/parish-v--wheeler-3584999?utm_source=webapp" opinion_id="3584999">22 N. Y. 494.

In Pierce v. Emery, 32 N. H. 484, it was held that after-acquired property, where appurtenant, would pass by .a mortgage of a railroad and its business, although there was no provision as to future property. This doctrine is denied, and we think properly, by the better considered cases.

The property involved here does not fall within any well-considered definition of the term “appurtenant,” nor can it possibly be regarded as either necessary or legitimate to the business of a railroad corporation. It consisted of a hotel, a brick storehouse, some vacant town-lots, and a farm of three hundred acres. The hotel was not used as a railroad eating-house, there being no station-house or depot at the town, but seems to have been used as an ordinary hotel for the entertainment of guests. The other property was rented out for the several purposes for which it was adapted.

It was used for these purposes by its. former owners before its acquisition by the railroad company, and continued to be so used after that acquisition. It was applied to no new use; and except that, after its acquisition, the several tenants occupying it paid rents to the railroad company, it served no beneficial purpose whatever to the railroad. Clearly, it was not appurtenant to it. It is urged, however, that the company making the mortgage was authorized by its amended charter to acquire this property ; that this amended charter had been granted by the Legislature before the execution of the mortgage, and that, therefore, while the language used in reference to after-acquired property would be too vague if used by a private person, or a corporation ordinarily, it will be sufficient when used by this corporation, and will cover all the property that it was by its charter authorized to hold. The amended charter was. enacted with reference to a proposed extension of the railroad from Canton to -Aberdeen. For this purpose it vests the company, with the right to acquire and hold, .“ at each termination of said railroad, and at any other place along the line of said railroad, or in the vicinity thereof, any quantity of land, not exceeding in any one place five hundred acres, to be used for all necessary purposes of said railroad, or to be disposed of at pleasure, for the purpose of constructing and maintaining said railroad.”

We entertain serious doubts .whether this act authorized the acquisition of real estate anywhere except “ at the terminations ” of the proposed extension, — to wit, at Canton and Aberdeen, —or along the line of the road to be built between-those terminations. The land here involved lies more than a hundred miles below Canton, and along that portion of the road which had been completed years before the passage of this act. But conceding that the act authorized the purchase of land all along' the line, both of the completed and of the uncompleted portion, from the Louisiana State line to the town of Aberdeen, then it is safe to say that it would justify the acquisition of a million acres of land. ^ .

' For what purpose was this enormous amount of land to be obtained and used ? Either ‘ ‘ for all necessary purposes of said railroad,” or “to be disposed of at pleasure, for the purpose of constructing and. maintaining said railroad.” If it was to be bought and used “for necessary purposes,” then' it was to become.appurtenant to the road; but we have seen that the property here involved was not so bought or used, but, on the contrary, it was when bought, and it thereafter remained, dedicated to purposes utterly foreign to the business of a common carrier.

If, on the contrary, we are to understand that by the words “ to be disposed of at pleasure, for the purpose of constructing and maintaining said railroad,” the company was empowered to buy this immense quantity of land, scattered along a line of three hundred miles, situated in many counties, and with no restrictions except that it should be in five-hundred-acre tracts and in the vicinity of the road, it follows that the company was vested with power to enter the market generally as a purchaser, holder, and speculator in real estate. It' might become the owner of plantations and of factories, and of entire towns and villages, and buy and sell and lease lands applied to every use known among men ; nor would it be bound to dedicate them, after they were acquired, to any purpose whatever connected with its business as a common carrier. It would differ, therefore, as to such lands, in no respect from a private person, so far as its right, either of acquisition or of disposition, was concerned, and hence there must be applied to its conveyances the same rules ,of construction as if they were made by private owners. It follows that, as the mortgage of the after-acquired property would have been void as to third persons if made by a private person, it is equally so as to the lands here involved, though made by a railroad company.

The case of Calhoun v. Paducah Railroad Company, 9 Cent. L. J. (No. 4) 66, is quite in point, and the opinion of Hammond, J., of the United States District Court for the Western District of Tennessee, compensates by its learning and ability for any lack of authoritative character in the tribunal. Strikingly similar, also, is the case of Morgan v. Donovan, 58 Ala. 241" court="Ala." date_filed="1877-12-15" href="https://app.midpage.ai/document/morgan-v-donovan-6509784?utm_source=webapp" opinion_id="6509784">58 Ala. 241.

There is no merit in the objection that, even though the mortgage was not operative on the land, plaintiff obtained no title to it under the sheriff’s sale because, at the time it occurred, the property was in the hands of a receiver appointed by the Federal court in the proceedings for foreclosing the mortgage. The receiver was not ordered to take possession of this land specifically, but was only directed to take charge generally of the property embraced in the mortgage; and nowhere in the proceedings was this land specifically alluded to until the filing of the receiver’s inventory, more than a year after the sale by the sheriff under execution and the purchase of the property by the plaintiff.

The receiver never took visible possession of the property, except by receiving rents from the tenants previously in possession, nor was anything done to admonish the public that this property was claimed as being embraced in the mortgage. Under these circumstances, as the property was not embraced in the mortgage, the purchaser at the execution-sale got a good title.

Judgment reversed, and judgment here, on the agreed state of facts, for plaintiff.