38 F. 891 | U.S. Circuit Court for the Southern District of Iowa | 1889
On the 15th of February, 1879, the St. Louis, Kansas City & Northern Railway Company executed a mortgage to the United States Trust Company on the line of railway extending from Council Bluffs, Iowa, to Pattonsburg, Mo., which was then about to be constructed; and which, when built, was known as the Omaha Division, and. which formed part of the system of linos consolidated under the name of the Wabash, St. Louis & Pacific Railway. By its terms the mortgage was to cover the rolling stock belonging thereto; and for the purpose of designating the same and distinguishing it from the rolling stock appurtenant to the main line and other branches of the road, it was provided in
The findings of the master show that the covenant in the mortgage, that the mortgagor would equip the Omaha Division with rolling stock proportionately equivalent in amount to that used upon the other portions of the system, has not been performed, and it is claimed on behalf of the present purchasers that the deficiency should be made good by assigning a sufficient number of ears out of the general equipment of the Wabash, St. Louis & Pacific Railway to make the equipment equal to what it would have been had the covenant been performed. If this were done, the cars so taken would reduce to that extent the security of other mortgagees, who are not in fault. If no other interests were involved, save those of the mortgager and the mortgagees of the Omaha Division, it might be that specific performance of the covenant in this particular could be decreed, but whether the decree would be for the assignment of specific rolling stock already in the possession of the company or for the purchase of other stock would be an open question, and it is doubtful whether a court of equity would undertake to give relief in this form. But however this may be, it is clear that when the question is presented, as it now is, upon this record, the court is not justified in attempting to enforce the covenant in the manner indicated. The liens
The master in his report has set forth the number of engines and cars which were purchased for the Omaha Division as provided in the mortgage and which were designated as therein provided. When so purchased and designated the lien of the mortgage attached thereto as a prior lien, and under the foreclosure of the mortgage and the sale based thereon the title to this rolling stock passed to the purchasers at such sale. On behalf of the Wabash Western Railway Company, which holds title under the foreclosure of the mortgage of June 1, 1880, it is claimed that as a purchaser at such sale, this company has the title to all the engines and cars which did not at the date of the sale have upon them the words “Omaha Division.” The evidence shows that, in the lapse of time and by various means, the words “ Omaha Division ” originally placed upon the rolling stock purchased for that division had been removed or lost from many of these engines and cars, and it is now contended that thereby such rolling stock became intermingled with the general equipment of the Wabash, St. Louis & Pacific Railway Company, and the lien of the mortgagees of the Omaha Division was destroyed as against the purchaser at the foreclosure sale of the mortgage of June 1, 1880. It was unquestionably the duty of the mortgagor, under the provisions of the mortgage of February 15, 1879, to keep the rolling stock purchased for the Omaha Division properly marked and designated. If, while the engines and cars were in its possession, it caused or permitted the designating marks to be removed or obliterated, such neglect, of duty on its part would not have the effect of releasing the lien of the mortgage as between the mortgagor and the mortgagees. It will also be borne in mind that other moans of identification of this rolling stock existed, as the same could be traced by the numbers thereof, and by the fact of its general use upon the line of the Omaha Division. The lien of the mortgage of February 15, 1879, having once attached to the rolling stock by its purchase for the Omaha Division and by its proper designation, would not bo destroyed as against the mortgagor or those fin privity with it, by reason, of the fact that the mortgagor had permitted the marks to bo obliterated upon such rolling stock. What the rights of one who should have purchased one or more of these cars at a public sale thereof might be held to be it is not necessary to consider. The title represented by the Wabash Western Railway Company is based upon the lien of the mortgage of June 1, 1880. The sale under the foreclosure of that mortgage was not of any specific cars, but of the line of railway and the rolling stock appurtenant thereto. When- this sale took place, the purchasing committee, who bought in the property, knew of the existence of the mortgage on the Omaha Division and of the lien
Part of such rolling stock has already been delivered to the receiver for the Omaha Division. Such portion thereof as has not been so delivered, should forthwith be transferred to the Omaha & St. Louis Railway Company. If, as is'asserted, anyone or more of these engines and •cars have been destroyed, such fact, of course, excuses the delivery thereof in kind. Whether a claim for damages for such destruction exists is not adjudicated, not being now in issue. What the Omaha & St. Louis Railway Company is now entitled to is a decree declaring specifically the rolling stock which was covered by the lien of the mortgage of February 15, 1879, and declaring that company, as the purchaser at the foreclosure sale, to be the owner thereof, and entitled to demand and receive possession thereof wherever said rolling stock may be found, and further directing the Wabash Western Railway Company to deliver to said Omaha & St. Louis Railway Company all of the named engines, cars, or rolling stock which may be now or may hereafter come into its possession or under its control.