Case ID: va_72/html/0560-01.html
Source: Caselaw Access Project
Author: {"author": "MoncurE, P.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Alex. & Fred. Railway Co.’s Trustees v. Graham & als.
    March Term, 1879,
    Richmond.
    The Alexandria and Fredericksburg Railway Company was chartered in February, 1864, with authority to construct and operate a railroad from the terminus of the Washington, Alexandria and Georgetown railroad, in the city of Alexandria, to the most eligible point on the road from Aquia ereek to Fredericksburg; and the company when organized as provided had authority to borrow $1,000,000. / The bonds were issued, and by deed, dated June 1, 1866, which was duly recorded, the company conveyed all its franchises ana property acquired, or which might be acquired, to trustees in trust to secure the payment of these bonds,' principal and interest. By an amendment of the charter in June, 1870, the company was authorized to extend their 17 railway to some point on the Potomac, and to bridge said river; and under this authority they extended the railway to the Tong bridge. In September, 1873, F recovered a judgment against the company, and issued a fieri facias thereon- — Heed: In a contest between the trustees in said deed an'd F, as to a sum of money in the hands of the court derived from the use of the road between Alexan-J. dria and the Bong bridge, by another railroad V company, this part of the road is not embraced in the deed, and F is entitled to it under the lien of his fieri facias.
    
    In a cause depending in the circuit court of the city of Alexandria, in the name of John C. Graham against the Washington City, Virginia Midland- and Great Southern Railroad Company, in September, 1877, Jacob D. Faunce filed his petition, in which he set out that at the November term, 1873, he had recovered a judgment against the Alexandria and Fredericksburg Railway Company for the sum of $3,400, with interest thereon from the 22d of November, 1873, and $87.29 costs; that an execution *of fieri facias had been sued out thereon and returned unsatisfied; that on the 6th of August, 1877, he had caused another execution of fieri facias to be issued on said judgment, and placed the same, in the hands of the sergeant of the city of Alexandria, and that he had thereupon caused a summons against John S- Barbour, receiver of the Washington City, Va. Midland and Great Southern Railroad Company, to be issued out of said clerk’s office, upon the suggestion of petitioner that by reason of the lien of his execution of fieri facias as aforesaid. there was a liability upon the said John S. Barbour, as receiver; that this summons has been served on said Barbour, receiver, and that there is a large sum of money in his hands due to the said Alexandria and Fredericksburg Railway Company, subject to the lien of petitioner’s execution; that said Barbour,'as receiver, is an officer of the court and subject to its control. and he therefore prays that the court will require the said Barbour to answer; and if any money or other property of the said Alexandria and Fredericksburg railway company shall be found in his possession which is subject to the lien of petitioner’s execution, that the said Barbour, receiver, may be ordered to pay over the same, to be applied, so far as it will go, to the satisfaction of petitioner’s judgment.
    Permission was granted said Faunce to file his petition in the said cause, and Barbour was required to answer the same: and permission was granted to any person claiming the fund, or any portion thereof, which said Faunce alleges is liable to the lien of his rvrit of fieri facias, to file h;s or their petition in the cause. And the cause _ was referred to H. Shepherd, special commissioner in this cause, to ascertain and report: First. How much money, if any, is in the possession of said receiver, subject to the lien of the fieri facias of said _J. D. Faunce. Second. If any other claimants than said Faunce are *entitled to the fund, if any, in the hands of Barbour, receiver, which Faunce claims is liable to the lien of his fieri facias, the names of the paries entitled to it, and in what proportions.
    Barbour filed his answer to the petition,_ in which he stated that previous to his appointment as receiver a contract had been entered into between the Washington City, Virginia Midland and Great Southern Railroad Company and the Baltimore and Potomac Railroad Company and the Alexandria and Fred-ericksburg Railway Company, by and through J. Bacon and S. Kneass, trustees of the said Alexandria and Fredericksburg Railway Company, whereby it was agreed that the first-named Company should have the privilege of passing its passenger and freight trains over the sections of road controlled by the other two companies between Alexandria and Washington over the Long bridge and Benning’s station, on the line of the Baltimore and Potomac Railroad Company, upon the terms therein stipulated; that after his appointment as receiver this contract was continued in force and acted on. And he says that on the 24th of September, 1877, he had in his hands, due to the Baltimore and Potomac Railroad and the Alexandria and Fredericksburg Railway Company, for the use of the sections of the tracks, as above designated, the sum of $6,688.10, and that he still holds this sum subject to the order of the court.
    Bacon and Kneass, trustees, under a deed of the Alexandria and Fredericksburg Railway Company, and the Baltimore and Potomac railroad company, filed their petitions in the cause. The said trustees set out that they,-claim under the deed of the Alexandria and Fredericksburg Railway Company, bearing date the 1st day of June, 1866, which they filed with their petition. They say that the said sum of $6,688.10 has arisen from the transaction of a connection business between themselves, *operaling the Alexandria and Fredericksburg Railway
    Company, the Alexandria and Washington-Railroad Company, and the Baltimore and Potomac Railroad Company, with John S. Barbour as receiver. And after setting out the lines of these respective railroad companies embraced in the agreement, showing that it only includes that part of the road of the Alexandria and Fred-ericksburg Railway Company which lies between said city of Alexandria and the southern end of the Long bridge, they state that of this sum of $6,688.10, $3,813.58 is due and belongs to the Baltimore and Potomac railroad company, and $1,238.46 is due and belongs to the Alexandria and Washington railroad company; and that the balance of said sum of $6,688.10, viz: the sum of $1,636.06, is due to the petitioners as trustees.
    The Baltimore and Potomac railroad company in their petition referred to that of the said trustees, and put their claim upon the fund in the hands of the receiver at the same amount, viz: $3,813.58.
    The commissioner made his report, showing the debt of Faunce as he stated it, and he expressed the opinion that the deed of trust under which Bacon and Kneass claimed did { embrace the portion of the railroad track'' between Alexandria and the Long bridge, which constitutes a part of the property of the Alexandra and Fredericksburg Railway Company; and to this Faunce excepted. There were other matters embraced in the report and other matters excepted to by Faunce, but they are not material to the case as it was before this court.
    The cause came on to be heard on the 26th of September, 1878, when the court sustained the exception of Faunce to the report, and held that that portion of the road of the Alexandria and Fredericksburg Railway Company, from the city of Alexandria to the southern end of the Long bridge, was not embraced in the deed of 1866. And it was decreed that Barbour, receiver, &c., do forthwith *pay over to the said Faunce, to apply to his judgment, the sum of $1,636.06, that being the proportion of the fund in the receiver’s hands which is the property of the Alexandria and Fred-ericksburg Railway Company, and is liable to the lien of said execution. And like decrees were made in favor of the other two companies for their shares of the said fund. And thereupon Bacon and Kneass applied to a judge of this court for an appeal; which was allowed. The facts in relation to the deed of trust are stated in the opinion of Judge Moncure.
    
      P. L. Smith, Jr., Wayne McVeigh and S. P. Beach, for the appellants.
    
      Claughton and Stuart, for the appellee.
   MoncurE, P.,

delivered the opinion of the court.

The subject of controversy in this case is the sum of $1,636.06, due by John S. Barbour, receiver of the Washington City, Virginia Midland and Great Southern railroad company, to the Alexandria and Fredericksburg Railway Company for trackage; that is to say, for the passage of trains of cars by said John S. Barbour, receiver as aforesaid, over that portion of the said Alexandria and Fred-ericksburg railway, which lies between the city of Alexandria and the southern end of the Long bridge, in the county of Alexandria.

The conflicting claimants of this fund are the appellants, Josiah Bacon and Strickland Kneass, substituted trustees under a deed of trust dated the 1st day of June, 1866, between the Alexandria and Fredericksburg Railway Company, a body corporate, chartered and organized by authority of the legislature of Virginia, of the first part, and D. Randolph Martin and Robert Turner, of the city of New York, of the second part, of which *deed (which was duly recorded) an official copy is a part of the record in this case; and the appellee, J. D. Faunce, who, in November, 1873, recovered a judgment in the circuit court 'of the city of Alexandria against the Alexandria and Fredericksburg Railway Company for the sum of $3,400, with interest thereon from the 33d day of November, 1873, until paid, and $87.39 costs, and thereupon sued out an execution of fieri facias on the said judgment, which was returned unsatisfied. On the 6th August, 1877, he caused an execution of fieri facias to be again issued upon said judgment and placed in the hands of the sergeant of the said city of Alexandria to be executed, and thereupon he caused a summons against the said receiver to be issued out of the clerk’s office of said court upon the suggestion of the said Faunce that by reason of the lien of his execution aforesaid there was a liability upon the said receiver.

The question in controversy between these conflicting claimants depends entirely upon the question whether that portion of the line of the Alexandria and Fredericksburg Railway Company, lying between the city of Alexandria and the southern end of thex'Long bridge, in the county of Alexandria, is or is not embraced in the deed of trust aforesaid, dated the 1st day of June, 1866. If it be so embraced, then the fund in controversy belongs to the said appellants, to be disposed of by them as substituted trustees under the said deed of trust. But if the said portion of the said line of the said railway be not so embraced, then the said fund belongs to the said appellee, Faunce, to be. applied to the part payment of his said execution.

The court below, upon consideration of the controversy, being of opinion that the portion of the road of said Alexandria and Fred-ericksburg Railway Company between the city of Alexandria and the southern end of the Long bridge as aforesaid, is not embraced in the *said deed of 1866, decreed that John S. Barbour, receiver as aforesaid, pay over to the said Faunce, to be applied to the payment of his judgment aforesaid, the said sum of $1,636.06, the same being liable to the lien of the said execution. From that decree this appeal was taken, and the question now to be considered is, whether the said decree be erroneous or not.

The original act of incorporation of the said Alexandria and Fredericksburg Railway Company was pásséd in the city of Alexandria by the general assembly of Virginia, February 3d, 1864, and is entitled “an act to incorporate a company to construct a railway from the city of Alexandria to connect with the Aquia Creek and Richmond railway.” See “Virginia 'Acts of Assembly, 1861 to 1865.”

By the first section of said act provision was made for opening books in the. city of Alexandria for the purpose of receiving subscriptions to an amount not exceeding $2,000,000 of capital stock, in shares of $100 each, for the purpose of surveying, locating, constructing and operating a railway from the terminus of the Washington, Alexandria and Georgetown railroad, in the city of Alexandria, to the most eligible point on the present railroad from Acquia creek to the city of Fredericksburg.

By the second, third, fourth and fifth sections it was enacted as follows :

“§ 2. That whenever 2,000 shares of said stock shall have been subscribed, and ten per cent, thereon paid in good faith, the subscribers, their successors, executors and assignees shall be and are hereby declared and constituted a body politic and corporate under the name and style of “The Alexandria and Fredericksburg Railway Company)” and shall be subject to all the provisions of the Code of Virginia applicable to such corporations : provided that the rates of
charge *for the transportation of persons and property upon the said railroad to or from the city of Alexandria shall not be ratably other or higher than upon persons or property destined to any point north of said city.
“§ 3. That it shall be lawful for said company, for the purpose, of constructing, equipping and operating said railway, to sell their bonds, w:th coupons attached, at the rate of interest not exceeding seven per centum per annum, to be p.aid semi-annually, to the amount of one million dollars, and also to borrow money upon their promissory notes duly executed under the authority of its board of directors, to an amount not exceeding $500,000.
“§ 4. Provided, that said company shall commence the construction of said railway within two years, and complete the same within five years from the passage of this act.
“§ 5. This act shall be in force from its passage.”

By deed of trust dated on the first day of June, 1866, between the Alexandria and Fred-ericksburg Railway Company, of the first part, and D. Randolph Martin and Robert Turner, of the city of New York, of the second part, and duly recorded in the several counties in -which the said railroad is located, the said party of the first part convey to the said parties of the second part “all the failroad of the'1 said party of the first part— that is to say, the said Alexandria and Fred-ericksburg railway, commencing at the terminus of the Washington, Alexandria and Georgetown railroad, in the city of Alexandria, state of Virginia, to the city of Fred-ericksburg, in said state, or to such point of junction with the Richmond, Fredericksburg and Potomac railroad, or the road leading from Aquia creek to the city of Fredericks-burg, at or near Brook’s station as now located, or to any other point of junction witli the said Richmond, Fredericksburg and Potomac railroad which may in the future be adopted, including all and singular the franchises of *said railroad as now granted and chartered, and any and all amendments, additions or modifications thereof, together with all and singular, the rights, interests, property and estate, real, personal and mixed, acquired, or which may hereafter be acquired, constructed, or to be constructed, of every species, nature and kind whatsoever.” “In trust, nevertheless, for the use and purposes” declared in said deed, among which, mainly, is the security of the payment of the bonds to be executed and disposed of as therein provided for.

Broad as certainly are the terms of the said deed as to the subject intended to be conveyed, they do not embrace, and were obviously not intended to embrace, that part of the Alexandria and Fredericksburg railway now extending from Alexandria to the southern extremity of the Long bridge across the Potomac river opposite the city of Washington. That extension was not then made, and probably had not been thought of, and was not made nor authorized to be made for years thereafter.It was first authorized to be made four years thereafter, by an act approved June 4, .1870, entitled “an act to amend the charter of the Alexandria and Fredericks-burg Railway Company.” Acts of Assembly, 1869-70, p. 187.

By the first section of that act, the forfeiture of the. charter of said company incurred by reason of its failure to complete said railway within the time specified in section 4 of its charter, is waived, and an extension of time for building said railway is granted, and the ' said company is “authorized to extend said railway to a point on the Potomac river, between Alexandria and Washington city, or opposite Washington city, and to bridge said river so far as the state of Virginia can authorize the same, or to connect with the bridge of any railroad company that may have been, or may hereafter be chartered by the *congress of the United States, whose road passes or shall pass through the District of Columbia: provided that in the extension of said railway it shall in no way interfere with the chartered rights or franchises of any railroad extending between Alexandria and Washington ; hut this proviso shall not be construed as preventing said Alexandria and Fredericks-burg railway from crossing any such railroad.” By the second section of said act an option is given to the said railway company as to the point of connection of its road with the Richmond, Fredericksburg and Potomac railroad, north of Fredericksburg: “provided that the said railway shall be constructed from its junction with” said railroad “to Alexandria, before its construction shall be commenced north of Alexandria.” By the third section, the second section of the said act of incorporation passed February 3, 1864, is amended, but the amendment need not be here set out.

Since the passage of the said act, approved June 4, 1870, it seems that the said railway has been connected with the said railroad as authorized by the said act, and has been constructed from its junction with said railroad to Alexandria, since which the extension of said railway beyond Alexandria to a point on the Potomac river, between Alexandria and Washington city, or opposite to Washington city, authorized by said act, has been accomplished.

Certainly the extension of the Alexandria and Fredericksburg railway from Alexandria to the southern end of the Long bridge across the Potomac river, opposite to Washington city, not having been made nor even contemplated at the time of the execution of the said deed of trust, dated the 1st day of June, 1866, was not embraced, nor intended to be embraced, as a part of the railway conveyed by that deed.

But it is contended for the appellants, that though not embraced as a part of the railway so conveyed, it is embraced *in the broad terms of that deed, which include “all and singular the franchises of said railroad as now granted and chartered, and any and all amendments, additions or modifications thereof, together with all and singular the rights, interest, property and estate, real, personal or mixed, acquired, or which may be acquired, constructed, or to ba constructed, of every species, nature and kind whatsoever.”

These are certainly very broad terms, but they were obviously intended to be confined to the railway as it then existed between the termini, plainly described in the deed, and the lateral branches of said railway wh’ch might thereafter be constructed by authority of law, together with the appurtenances then or thereafter existing to said railway so limited and its lateral branches aforesaid. In regard to such lateral branches, the Code, ch. 61, § 5, p. 573, declares that _ “the president and directors of any company incorporated to construct a railroad or other work of internal improvement,- may cause to be made in connection therewith branch railroads or lateral works not execeeding two miles each in length; and under a resolution adopted in general meeting by two-thirds of all the votes of all the stockholders, may cause to be made branch railroads or lateral works not exceeding ten miles each in length.”

But, it is argued for the appellants, that under the power thus conferred to construct these lateral branches, this extension of the said railway from its terminus_ at Alexandria to the Long bridge as aforesaid, might have been, if it was not actually, constructed, and whether it was, in fact, so or not, the deed of trust aforesaid must be construed as if the said extension had been so constructed.

Certainly the said extension was _ not intended to be so constructed even if it had been lawful so to construct *it. The act approved June 4th, 1870, amending the charter of the Alexandria and Fred-ericksburg Railway Company as aforesaid, expressly authorized the said extension to be made, and it was, in fact, made under that act, and not under the general provision in the Code in regard to branch railroads and lateral works as aforesaid. It is not pretended that there was ever any resolution or vote of the stockholders, or even of the directors of the said railway company, to make any such extension, and it being more than two miles in length, even if it had been a branch or lateral road of the railway conveyed by said deed of trust, it could only have been authorized to be constructed as such “under a resolution adopted in general meeting by two-thirds of all the votes of all the stockholders” of said railway company. Code, p. 574, §> 5.

But it was not a mere branch or lateral road of fhe said railway within the meaning of the said section of the Code, and could only have been authorized by another act of assembly, as it was by the act of June 4th, 1870, aforesaid. It was an extension of the said railway from its northern terminus at Alexandria to the southern end of the Long bridge across the Potomac river, opposite Washington city, which point thereafter became the northern terminus of the said railway, just as if it had been so named in the original charter, though such operation vías prospective only, and not retrospective.

Suppose that the said railway company had effected the said extension of its railway from Alexandria to the Long bridge by borrowing money from a third person for that purpose and securing its repayment by a deed of trust on such extended road, could the validity of such an arrangement have been questioned? Could it have been said that the said deed of trust of the lst_of June, 1866, was a prior lien on the said extension, in the face *of the express terms of that deed limiting the road thereby intended to be conveyed and actually conveyed, to Alexandria as its northern terminus?

But it is said that the extension was made, not with money specially borrowed for the purpose and1 secured by a specific lien, but with money derived from the bondholders secured by the said deed of trust of the 1st of June, 1866. There is no evidence in the record of any such fact; and even if there had been, it would have given to the said bondholders no specific lien on the said extended road for the security of the money expended in such extension. If they desired such security they ought to have required it, and had a deed of trust or mortgage on the said extended road executed and duly recorded for that purpose. Not having done so, and no deed of trust or mortgage on said extended road having been executed in their favor, they stand in regard to such extension merely as general creditors, without any specific lien thereon, and the appellee, Faunce, -who was also a general creditor of the said railway company, having acquired a specific lien on and claim to the fund in controversy arising from the use of the said extended road, is entitled to the said fund in preference to the appellants.

Reliance is placed by the counsel for the appellants on ch. 61, § 44, page 585, of the Code, which is in these words: “If a sale be made under a deed of trust or mortgage executed'by a company on all its works and property, and there be a conveyance pursuant thereto, such sale and conveyance .shall pass to the purchaser at the sale, not only the works and property of the company as they were at-'the time of making the deed of. trust or mortgage, but any works which the company may, after that time and before the sale, have constructed, and \all other property' of which it may be possessed at *the time of the sale, other than debts due to it. Upon such conveyance to the purchaser, the said company shall ipso facto be .dissolved. And the» said purchaser shall forthwith be a corporation by any name which may be set forth in the said conveyance, or in any writing signed by him and recorded in the court in which the conveyance shall be recorded.”

This section applies expressly and only to a sale under a deed of trust or mortgage by a company on all its works and property, and not merely on a specific part thereof; and the reference-therein made to “any works which the company may, after that time and before the sale have constructed, and all other property of which it may be possessed at the time of the sale o.ther than debts' due to it,” applies only to “works” and “other property” appurtenant to the said “works and property” conveyed by the said deed of trust or mortgage and acquired according to law since its execution.'- The section, therefore, does not apply to a portion of the road not constructed nor authorized by law to be constructed until several years after the execution of the said deed of trust or mortgage.

As the portion of the road extending from Alexandria to the Long bridge constitutes, comparatively, a símil portion of the whole railway, it seems that the trustees of the residue of said railway under the deed of trust aforesaid, have charge of. the entire railway, and represent the company in regard to the same in this suit and otherwise. But that fact alone does not give them, nor is there anything else, so far as the record shows, which gives them any right to the money in controversy to be applied to the purposes of the said deed of trust.

This case has been argued.with very great ability by the counsel on both sides,_ who cited many books in support of their respective views, which books, however, in *our opinion, contain nothing in conflict with the views we havfe expressed.

The court is therefore of opinion that there is no error in the decree appealed from, and that the same ought to be affirmed.

Decree affirmed.