55 Me. 395 | Me. | 1867
This is a bill in equity to which the defendants have demurred.
April 1, 1851, the Atlantic & St. Lawrence Railroad Company mortgaged their franchise, and all their property, real and personal, including their right of way, to secure the payment of bonds issued by said company to the amount of $1,500,000. In that mortgage it Is agreed, among other things, that if the railroad company should at any time fail to pay the interest which should become due upon any of said bonds, or the principal, according to the tenor thereof, it should then be lawful for the trustees, (subject to the prior rights of the city of Portland,) to take possession of said property, and to work the railroad and machinery and equipments, and receive the income, rents and profits thereof.
The bill alleges that a portion of the bonds became due April 1, 1866 ; that payment was demanded, but they were not paid ; that the trustees have been notified by the holders of said bonds of the non-payment and requested to exercise the powers and perform the duties and obligations conferred and imposed upon them by said mortgage; that, on June 4, and on June 9, 1866, they demanded possession of said railroad and other property included in the mortgage, of the Grand Trunk Railway Company, now in possession of the same under a lease, and endeavored to take possession of the same, but were obstructed and prevented from so doing. Wherefore they pray, among other things, that the
It is contended that it was not the duty or the right of the trustees to take the possession and management of the road, because they had not been directed so to do by a vote of the bondholders at a meeting notified and hold as provided in R. S., c. 51, § 54. The answer is that they do not claim possession by virtue of the provisions of the public statutes for the foreclosure of railroad mortgages, but by virtue of the express stipulation in the mortgage. In other words, they ask for a specific performance of their contract in this particular. We think they are entitled to it, and that a bill in equity is a proper form of proceeding to obtain it. So held in Shaw et als., trustees, v. Norfolk Oounty Railroad Co., 5 Gray, 162. (See opinion of the Court on pages 182-3.) Also by Mr. Justice Curtis, in Hall et als., trustees, v. Sullivan Railway, (U. S. Circuit Court for district of New Hampshire,) cited by Judge Redtteud in his work on Railways, page 578, where the opinion of Judge Curtis is given at length.
It has been argued in defence that this mortgage was originally illegal and void; that it owes its validity to subsequent statutory ratification; and, inasmuch as the same statutes which give it validity prescribe the remedies for a breach of it, those remedies are exclusive, and the only ones that can be adopted; and we are referred to several decisions in other States in which it is held that in the absence of legislative consent such mortgages are invalid.
Wre do not consider it necessary to enter into a discussion of the question whether this mortgage was originally valid or not. It being conceded that it is now valid, probably the bondholders will be content with the result, and will not care to know particularly how that result is reached, provided it is not hampered with such embarrassments and difficulties as to make it practically unavailing as a means of getting their pay.
We confess that, after giving the matter much thought, the doctrine that all railroad mortgages made without the consent of the Legislature are illegal and void, because they may operate as a permanent transfer of the corporate powers from the original corporators to another body, seems to us to have little to commend it and much to condemn it.
We do not understand that by this bill the trustees seek to obtain a decree of foreclosure of their mortgage. The objection, therefore, that this Court has no jurisdiction in equity to decree such a foreclosure is not well taken. The bill does not ask for such a decree. Nor do we understand
Demurrer overruled.
Defendants to answer further.