Case ID: ohio-st_24/html/0028-01.html
Source: Caselaw Access Project
Author: {"author": "McIlvaine, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Michael Walsh v. Benjamin D. Barton et al.
    1. Where the name of the agent, with whom a contract for the purchase of real estate was made, appears in the written memorandum of the agreement signed by the purchaser, who is the party to be charged, the statute of frauds is satisfied, although the names of the principals are not'disclosed therein.
    2. When a vendor of land, having contracted to convey a perfect title, brings his action to compel specific performance against the vendee, who denies the sufficiency of'the vendor’s title, the burden of showing title in himself rests on the plaintiff, arid the introduction of a deed of recent date executed to himself, without further proof of title, is not sufficient.
    3. A deed, purporting to have been executed by the president of a railroad corporation, under the seal of the corporation, as authorized by section 16 of the act of May 1, 1852 (S. & C. 219), if objected to, can not be given in evidence without proof of its execution.
    4. The power to purchase land, conferred upon a railroad company by section 14 of the' act of February 11, 1848 (S. & O. 273, note), is not limited to the acquisition of such lands as may be necessary for operating or maintaining its road.
    6. If, in malting a purchase of real estate, the company abuse the power conferred upon it by. said section, still, after resale and conveyance, the title becomes indefeasible in the hands of its vendee.
    6. A mortgage executed by a railroad company on “ the road ” of the company, “whether made or to be made, acquired or to be acquired, and all property, real or personal,” of the company, “ whether now owned or hereafter to be acquired, used, or appropriated for the operating or maintaining the said road,” is not a lien upon real estate of the company, then owned or afterward acquired, which has not been used or appropriated for operating or maintaining the road.
    
      7. A purchaser of land, who is entitled under his contract to a perfect title, can not be compelled to perform his agreement, if the property purchased be subject to a judgment lien, unless he can be protected by the decree from loss or inconvenience by reason of the lien, although it be shown that the judgment debtor has other property sufficient to satisfy the judgment.
    8. Where it is stipulated in a deed-poll that the grantee, his heirs and assigns, shall build and perpetually maintain a fence on the line between the land granted and other lands owned by the grantor, and the parties to such deed, at the time of its execution, contemplate the subdivision of the granted premises into building or town lots, and their subsequent sale, the burden of maintaining such fence will not attach to, or run with, lots which do not abut on the lino of the proposed fence.
    9. Where a “sale" at auction is announced to be “positive,” it is an act of fraud on the part of the vendor, or his agent, to employ by-bidders to keep up the price for his own benefit.
    Error to the Superior Court of Cincinnati, in general term.
    The original action was brought by the defendants in error, against the plaintiff' in error, to compel the specific performance of certain contracts for the purchase of real estate. The plaintiff's had purchased from the Marietta and Cincinnati Railroad Company several parcels of land, situate near the city of Cincinnati, a part of which they subdivided into lots, and employed the firms of George H. Shotwell & Co., Hemmelgarn & Co., and Hoeffer & Buening, auctioneers, to sell the same. These auctioneers, on the 7th day of June,- 1869, in accordance with public notice given in their own names, and upon the terms and conditions of sale then and there announced, offered the several lots at public auction on the premises. Four of the lots thus offered were sold separately to the defendant, who at the time signed a certificate of purchase for each lot. These certificates were of like tenor and effect. The terms of sale were: “One-fourth purchase money cash; balance in one, two, and three years. Title perfect. Sale positive.” The purchaser, Walsh, having refused to execute the contracts on his part, the vendors commenced their said suit on the 3d of July, 1869.
    The defendant answered as follows:
    1. That the plaintiffs never tendered him a deed properly executed, and in due form, for the real estate described in their petition.
    2. That whereas the plaintiffs undertook, and by advertisement promised, to sell, convey, and deliver the lands and tenements whereof they speak in their petition, with perfect title and free of all claims, they had no such title at the time of the pretended sale, nor afterward until and after the commencement of this action. 'And they have no such title at present.
    3. That the plaintiffs employed puffers and by-bidders at their sale, wher'eby the defendant was deceived in his estimate of the value of the property. And the auctioneer whom they employed so fraudulently behaved as to induce this defendant to bid against himself, twice or thrice, for the real estate described in the petition.
    4. That the price claimed by the plaintiffs, as described in their petition, is unreasonable and exhorbitant.
    To which the plaintiffs replied :
    1. That they did tender the defendant a deed properly executed, and in due form, for the real estate described in the petition.
    2. They say that they had a clear title to the said real estate, and still have such title.
    3. They deny that they employed puffers and by-bidders at tbeir sale, or that any such bids were made for any of the property sold. They deny that the auctioneer employed by them fraudulently, or otherwise, induced the defendant to bid against himself.
    4. They deny that the price at which said real estate was sold to the defendant is unreasonable and exhorbitant.
    The cause was tried to the court at special term, and the following facts were specially found:
    1. That on June 7, 1869, in pursuance of and after advertisement made, the plaintiffs caused to be exposed to sale at public auction, a number of lots of ground in a subdivision of “ Ludlow Grove,” as laid out and subdivided by the plaintiffs.
    2. That the defendant was a bidder, with others, at said sale, and purchased the four lots of ground described in the petition herein, for the amounts and upon the terms and conditions therein stated.
    3. That the sale of the lots of ground sold to and purchased by the defendant was a fair sale.
    4. That the defendant, at the time of said purchase and sale, signed and executed a contract, in writing, separately for each of the lots of ground so purchased by and sold to him; which contract, so executed, recited the terms of sale, the amount to be paid as purchase money, and a description of the lot purchased,
    5. That the plaintiffs on July 1,1869, tendered to the defendant a deed of general warranty, with release of dower, and in due form of law, for the four lots of grouud purchased by the defendant at said sale.
    6. That the defendant refused to receive said deed when so tendered to him, refused to pay one-fourth of the purchase money, and to execute and deliver to the plaintiffs his promissory notes, and secure the same with a mortgage upon the lots of ground so purchased, for the remaining three-fourths of the purchase money.
    7. That the plaintiffs derived their title to the said real estate from the Marietta and Cincinnati Railroad Company, as re-organized, by deed bearing date on May 22, 1869.
    8. That the Marietta and Cincinnati Railroad Company, as re-organized, executed and delivered to John L. Taylor, trustee, two mortgages, which remain uncanceled of record, on the said railroad and all the property, real and personal, used or appropriated for the operating and'maintaining the said road.
    9. That the real estate sold to and purchased by the defendant was not used, appropriated, or necessary for the operating or maintaining the said road, and is not subject to, included in, or the title thereto incumbered by said mortgages.
    10. That the plaintiffs were able, ready, and offered to comply with the terms and conditions of said sale on their part.
    11. That the defendant has refused to perform his part of the said agreement in the purchase by him made.
    Thereupon the court rendered judgment for the plaintiffs for specific performance.
    The defendant moved for a new trial, which motion being overruled he excepted, and by bill of exceptions placed the whole of the testimony upon the record.
    The judgment at special term was afterward, ou petition in error, affirmed in general term.
    It is now alleged for error, among other thing, that the court below, at special term, erred in admitting in evidence the deed from the Marietta and Cincinnati Railroad Company to the plaintiffs below, and in its findings of facts, and in its finding of law, and in rendering the judgment entered of records
    
      George E. Pugh, E. S. Throog, and J. D. Brannan, for Walsh:
    I. The plaintiffs below had not a sufficient title to the lands which they had undertaken to sell and convey.
    The petition of plaintiffs should allege title to the lands. Stephen on Pleading, ch. 2, sec. 4; Ib. 304, 4 English and American ed.; 1 Chitty on Pleading, 10 American and 7 English ed. 378, 379, etc.
    The obligation of proving any fact lies upon the party who substantially asserts the affirmation of the issue. The plaintiffs below were bound to show their title. The paper purporting to be a deed to them from the Marietta and Cincinnati Railroad Company, did not show title, Hatch v. Barr, 1 Ohio, 390; and was not admissible in evidence, inasmuch as the subscribing witnesses were not produced and no reason, given why were not. Clark v. Boy d, 2 Ohio, 59; 
      Zerby v. Wilson, 3 Ohio, 47; Richards v. Skiff, 8 Ohio St. 586, 587; Summons v. The State, 7 Ohio (pt. 1), 116.
    II. If the deed from the railroad company is admissible, the plaintiff’s title is not such as will support an action for specific performance; because the title of the railroad company to this land is questionable. A vendor can not insist on a specific performance, unless he can convey a perfect title. 2 Vesey, 59; Heath v. Heath, 1 Bro. C. C. 147; Shapland v. Smith, Ib. 74; Lewis v. Herndon, 3 Litt. (Ky.) 358, syllabus; Reed v. Noe, 9 Yerg. 283; Garrett v. Macon, 6 Call (Va.), 368; 5 Vesey, Jr. 186; Pugh v. Cheseldine, 11 Ohio, 109; Marlow v. Smith, 2 P. Williams, 198; Cooper v. Denne, 1 Vesey, Jr. 565; Mitchell v. Neale, 2 Vesey, 679; McComb v. Wright, 4 Johns. Ch. 659.
    III. The title of the Marietta and Cincinnati Railroad. Company is questionable, because a railroad company has-power to acquire real estate only when such power is granted it by statute or by its charter. Act of February 11, 1848,. see. 14,1 S. & C. 273; Act of May 1,1852, see. 15,1 S. & C. 279.
    The Marietta and .Cincinnati Railroad Company rests, under the suspicion of having bought this land for the purposes of speculation, which is an act so clearly ultra vires as to make its title bad. On the subject of ultra vires, see Straus v. Eagle Insurance Co., 5 Ohio St. 59; Bank of Chillicothe v. Swayne, 8 Ohio, 287; Lessee of Presley Kemper v. Cincinnati, Columbus and Wooster Turnpike Co., 11 Ohio, 392; Rensselaer and Saratoga Railroad Co. v. Davis, 43 N. Y. 146; Pacific Railroad Co. v. Seeley, 45 Mo. 212; Bostock v. North Staffordshire Railroad Co., 3 Smale & Giffard, 283.
    It does not appear that the parties from whom the Marietta, and Cincinnati Railroad Company bought these lands might not interfere to prevent the company making another use of them than that for which the company was empowered to purchase. The company had no power to purchase as a speculation. To decree specific performance would be to force the defendant to buy a possible lawsuit.
    
      IV. If the Marietta and Cincinnati Railroad Company had power to purchase this land, its title was nevertheless not a clear one when transferred to the plaintiffs.
    Two mortgages were executed by the said railroad company to John L. Taylor. They remain unpaid and uncanceled, and are a lien upon these lands.
    The plaintiffs maintained that these mortgages attached to the road-bed only, and therefore do not cover this land. But it is submitted that the very words of the instrument defeat this argument. The company first grant “ the road, whether made or to be made, acquired or to be acquired,” and then add, “ and all property, real and personal, whether now owned or hereafter to be acquired.” If the plaintiffs rely on the words “ used or appropriated for the operating or maintaining the said road ” as restrictive, then it still lies upon them to show that the land in question has never been “ used or appropriated for the operating or maintaining the said road.”
    But, as a matter of fact, the road was not laid out through the land in question at the time these mortgages were executed by the company; so that it was impossible to say where the road-bed would be. The mortgages attached^ therefore, to the entire tract of land as soon as the company acquired possession.
    The plaintiffs are held fast between the first and the second points of defense. If this land was not bought by the company “ to be used for operating or maintaining the said road,” then its purchase was an act ultra vires of the company, and therefore the Company could not acquire a good title to the land. If the land was bought for use in operating or maintaining the said road, then these mortgages attach to it, and are an incumbrance which prevent the plaintiffs from giving a clear title to the defendant.
    V. The company’s title to this land was still further affected by a judgment lien. 1 Bess. 382, and 3 Bess. 539.
    VI. But, even if the company’s title had been a clear one, still the plaintiffs would not be able to give a perfect title to the defendant, because the land is incumbered with. a covenant to build and maintain fences along the lines of the railroad. Such a covenant runs with the land. Easter v. L. M. R. R. Co., 14 Ohio St. 48.
    VII. The memorandum of the contract is not sufficient to satisfy the statute of frauds, because the name of the vendor does not appear in it. Benjamin on Sales, 161; Champion v. Plummer, 1 Bos. & Pul. N. R. 252; Klinitz v. Surrey, 5 Esp. 267; Vandenburgh v. Spooner, L. R., 1 Exch 316; Williams v. Byrnes, 8 L. J., N. S. 69; 1 Moore’s P. C. C., N. S. 154; Ib. 196; Williams v. Lake, 2 E. & E. 349; 29 L. J., Q. B. 1; Boyce v. Greene, 1 Batty (Irish), 608; Jacob v. Kirk, 2 Mood. & Rob. 221; Nichols v. Johnson, 10 Conn. 192; Sherburne v. Shaw, 1 N. H. 157; Knox v. King, 36 Ala. 367; Benjamin on Sales, 153.
    It is very clear, then, that if the plaintiffs rely on these memoranda to take the case. out of the statute of frauds, they must fail in their action.
    Nor can they make out their case by the introduction of the advertisements, handbills, and plats; for it is a thoroughly well-settled principle that, if several papers are relied upon to make up a sufficient memorandum under the statute of frauds, the signed paper must contain a reference to the others, or they must be physically connected at the time of the signature. Benjamin on Sales, 153; Hinde v. Whitehouse, 7 East, 558; Allen v. Bennett, 3 Taunton, 169; Kenworthy v. Schofield, 2 B. & C. 945; Jacob v. Kirk, 2 M. & R. 221; O’Donnell v. Leeman, 43 Me. 158; Ide v. Stanton, 15 Vt. 690; Freeport v. Bartol, 3 Greenl. (Me.) 314; Ware v. Kirkman, 5 Cush. (Miss.) 823.
    A compliance with the statute after action begun is too late. Bill v. Bament, 9 M. & W. 36; Tisdale v. Harris, 20 Pick. 9.
    VIII. The defendant would be entitled to rescind this .agreement, even if it were in due form, because there was fraud in the sale. Persons were employed to bid on behalf of the vendors. Sugden on Vendors and Purchasers, 13-19; Benjamin on Sales, 352, 357; Meadows v. Tanner, 5 Madd. 34; Marlow v. Harrison, 28 L. J., Q. B. 18; 1 E. & E. 295; 29 L. J., Q. B. 14; Robinson v. Wall, 2 Phil. Ch. 372.
    The conditions of sale in the case at bar contain the words “ sale positive.” The legal effect of this condition is the same as that of “ without reserve.”
    
      Long, Kramer Kramer, for Barton, Brewster & Folz :
    I. The plaintiffs, Barton, Brewster & Folz, had a sufficient title to the lands which they had undertaken to sell and convey.
    By reference to the deed from the railroad company to-the plaintiffs, it will be seen that:
    “The M. & C. R. R. Co., as reorganized, does bargain, sell, and convey, covenants, and warrants.”
    The testatum clause is as follows:
    “In testimony whereof, the said Marietta and Cincinnati Railroad has caused its corporate seal to be hereto affixed,, and its president to hereunto set his hand and seal.”
    Signed, “John King, Jr., President of the Marietta and. Cincinnati Railroad Company, as reorganized;” with the, corporate seal of the company attached.
    The execution of the deed in the case of Hatch v. Barr, has no analogy with that under consideration. Just what, was claimed would have made the execution of the deed valid in that case, exists in the case at bar.
    The manner in which the deed to the plaintiffs was executed by the Marietta and Cincinnati Railroad Company,, is clearly within the case of Sheehan et al. v. Davis, 17 Ohio St. 571.
    II. The vendee can not make void the contract of purchase-upon mere suspicion. The rule is well stated in Brown v. Witter, 10 Ohio, 142.
    III. Under the act of February 11, 1848, see. 14, S. & C. 273, and the act of May 1,1852, sec. 15, p. 279, the railroad company had a right to purchase and convey these lands.
    IV. , The mortgages executed by the M. & Cl R. R, Co. to Taylor,, do not operate as a lien upon these lands. It is the road of the railroad company that is mortgaged,. whether made or to be made, acquired or to be acquired, .. . . and all property, real and personal, . . . used •or appropriated, for operating or maintaining said road.” 'The land in question has never been used or appropriated for operating or maintaining the said road, and hence is not embraced in the mortgages. Seymour & Brown v. The C. & N. F. R. R. Co., 25 Barbour, 284; Dinsmore v. The R. & M. R. R. Co., 12 Wisconsin, 649.
    V. The judgment obtained by Picks]ey against the M. & C. R. R. Co., did not operate as a lien upon these lands, or if so, it was merely a nominal lien, and furnishes no valid excuse to the purchaser to decline to take the property purchased: because that case had been taken to the Supreme Court, and leave given to file petition in error, and a supersedeas bond, with personal security, given to pay the judgment if it should be affirmed; and, also, because the M. & C. R. R. Co. had, at the time of the conveyance to the plaintiffs, within the county of Hamilton, not less than half .a million dollars’ worth of property, which would be liable •for the payment of said judgment, if affirmed, before these lands would be subject thereto. 10 Ohio, 144.
    VI. The condition of acceptance creates no incumbrance upon these lands to build and maintain fences. The lands ■do not bound upon the line of the M. & C. R. R. Co.’s track, but lie a considerable distance therefrom; consequently, the defendants, under no circumstances could be required to erect or maintain such fences.
    VIL The contract of purchase subscribed by the defendant at the time of his purchase, is sufficient in law to ■satisfy the statute of frauds. The purchase was made at a .sale of real estate at auction, wherein, by a well-settled rule of law, the auctioneers became, and were, the agents of the vendors for the sale of the real estate so sold, and are so named in the agreement.
    VIII. There is no evidence to show that any person was employed by the owners of the land to bid for them.
    
      
      Iloadly, Johnson § Colston, for the M. & O. R. R. Co.: ‘
    I. By section 14 of the act of February 11, 1848 (S. & 0-273, note), the company had express power to acquire and convey the land in question.
    If their right to acquire lands under the charter is strictly limited to their necessities for railroad use, then the legislature would never have authorized the company to acquire-lands “ in the vicinity of said road,” as an alternative power to that of the acquisition of lands “ through which the same ” (the railroad) “ may pass;” nor have provided that this should be exercised whenever “ convenient or necessary to secure the right of way;” nor would they have permitted the company to convey the same. The' purpose seems to-have been to authorize the very thing here done.
    A company having these powers may find itself compelled, to purchase more land than it strictly needs for railway construction : — its located line may run through a factory, rope-walk, or dwelling-house. May it not purchase the entire tract, and convey wbat may prove not to be needed? See Town Council of Newark v. Elliott, 5 Ohio St. 113; Coe v. C. P. & I. R. R. Co., 10 Ib. 377.
    II. There is, in the charter, no prohibition of the right' of the company either to purchase, hold, or convey lands Even if there were an express pi’ohibition of the power to-hold, the state alone can take advantage of the abuse and inflict punishment. Banks v. Poitiaux, 3 Rand. 136; Leazure v. Hillegus, 7 S. & R. 313; Baird, v. Bank of Washington, 11 Ib. 411; Goundie v. Northampton Water Co., 7 Penn. St. 233; Silver Lake Bank v. North, 4 Johns. Ch. 370, 373; Bogardus v. Trinity Church, 4 Sandf. Ch. 758; Natoma Water and Mining Co. v. Clarkin, 14 Cal. 544; Barrow v. Nashville and Charlotte Turnpike Co., 9 Humph. 306; McIndoe v. St. Louis, 10 Mo. 576; Land v. Hoffman et al., 12 Am. Law Reg. 143; Chambers v. St. Louis, 29 Mo. 576; Smith v. Shuley, 12 Wall. 361; Myers v. Croft, 13 Ib. 295.
    III. The mortgages given by the company do not embrace the lands in question. The property mortgaged was the “ road,” and “ all the property, real and personal, of the company, . . . used or appropriated for the operating or maintaining of the said road.” The land in question never has been “ used or appropriated for the operating or maintaining the said railroad.” Coe v. The C. P. & I. R. R. Co., 10 Ohio St. 378; Plymouth Railroad Company v. Colwell & Jacoby, 39 Penn. St. 337; Shamokin Valley R. R. Co. et al. v. Livermore et al., 47 Penn. St. 465; Youngman et al. v. The Elmira and Williamsport R. R. Co., 65 Penn. St. 278; Seymour v. The Canandaigua and Niagara R. R. Co., 25 Barb. 284; S. C., 14 How. Pr. 531.
   McIlvaine, J.

Several questions are presented for our consideration in this case.

I. It is claimed that the written memorandum of the contract sought to be enforced, is not sufficient to satisfy the statute of frauds, in this, that it does not contain the names of the vendors.

The memorandum is as follows:

“ Cincinnati, June 7,1869.
“ This is to certify that I have this day purchased, at auction, through George H. Shotwell &. Co., Hemmelgarn & Co., and Hoeffer & Buening, auctioneers, a lot 167.80 feet front, and 210 feet, more or less, in depth, with improvements, at $50i per front foot, one-fourth cash, and the balance in one, two, and three years, with interest at six per cent., secured by mortgage on the premises, being lot4 A,’ in Barton, Brewster, and Eolz subdivision.
“Michael Walsh.”

This writing, by fair construction, shows that the auctioneers therein named, acted, in and about the making of the sale, as the agents of the vendors. It is certified therein, by the vendee, who is the party sought to be charged, that he purchased the property described, at auction, through them. By this language, we understand that the property was sold to him, by them, as auctioneers, and if so, it sufficiently appears that they were the agents of the vendors. The only question, therefore, is whether it be necessary, in order to satisfy the statute of frauds, that the names of the principals should appear in the memorandum, in a case where the contract was, in fact, made by their agents, and the names of the agents are set out in the writing. "We think the statute is satisfied in this respect, when the names of the agents are set out in the writing, though the names of their principals be not disclosed. The case being thus taken out of the statute, the right or liability of the principals may be enforced, and their identity established, according to the rules of law governing in other cases, where contracts are made by agents without disclosing their principals. White v. Proctor, 4 Taunt. 209; Hood v. Lord Barrington, C. L. P. (Eq.) 221; Lerned v. Johns, 9 Allen, 419; Eastern R. R. Co. v. Benedict, 5 Gray, 561; Gowen v. Klous, 101 Mass. 455; Higgins v. Senior, 8 Mees. & W. 834; Thayer v. Fuller et al., 22 Ohio St. 78.

II. Did the plaintiffs below show such title in themselves as warranted the decree for specific performance ?

The plaintiffs had contracted to convey to the defendant a good title, or, as the conditions of sale termed it, a “perfect title.” The defendants denied that they were possessed of such a title; and the only evidence offered to show title in themselves, was a deed from the Marietta and Cincinnati Railroad Company to them, dated May 22,1869, less than a month prior to the sale, together with oral testimony, tending to prove that the railroad company had been in possession before the date of the deed. The nature of this possession, or the length of time during which it was held, was not shown.

Captious objections to the title ought not to prevail, when made by a purchaser who seeks to avoid the performance of his contract;-but in a case for specific performance, when the title of the vendor is denied, a decree should not be rendered against him, unless it be made to appear, with reasonable certainty, that the title is good; and the burden of making it so appear rests upon the vendor. Having contracted to convey a good title, and the evidences of his title being matters peculiarly within his own knowledge, "the vendor must aver and prove that he is able, as well as willing, to perform the contract on his part. We do not say that the vendor, in such case, should be called upon, in the first instance, to show, beyond all doubt, that his title is perfect; but he should satisfy the chancellor that his title is such as would satisfy men of ordinary prudence. We think, therefore, that the court below was not warranted in finding, from the testimony, that the plaintiffs were able, to comply with the conditions of the contract on their part.

Did the court err in permitting, against the objections of the defendant, the deed from the M. & C. R. R. Co. to the plaintiffs, to be given in evidence without proof of its execution?

This deed purports to have been signed by John King, Jr., president of the corporation, and under the seal of the corporation, as authorized by section 15 of the act of May 1,1852 (S. & C. 279); and its execution purports to have been attested by two witnesses.

The signature of the president of the corporation to such a deed does not prove itself, nor is it provenby the seal of the corporation. It was error, therefore, to admit the deed without proof of its execution by the president of the company.

It is suggested 'by defendants in error, that, in fact, the record of the deed, from the office of the recorder of Hamilton county, was the instrument offered, and not the original deed: and that the record was admissible without proof of the execution of the instrument recorded.

To this suggestion it is sufficient to say, that the bill of exceptions shows that the deed itself was the objectionable instrument admitted, and we are not at liberty to question the verity of the record.

Waiving the error in admitting in evidence the deed from the railroad company to the plaintiffs below, it is claimed by the plaintiff in error that the title of the plaintiffs below is at least doubtful, because the railroad corporation had no power to acquire or transfer the title to the premises in question.

We agree with counsel, that a corporation has power to-acquire real estate only when such power is granted to it by statute or by its charter. Power to acquire and convey real estate, however, was granted to this railroad company by section 14 of the act of February 11,1848 (S. & C. 273 note), as follows, to wit:

“ Such company may acquire, by purchase or gift, any land in the vicinity of said road, or through which the same may pass, so far as may be deemed convenient or necessary by said company to secure the right of way, or such as may be granted to aid in the construction of said road, or be given by way of subscription to the capilal stock; and the same to hold or convey in such manner as the directors may prescribe.”

See also section 15 of act of May 1, 1852, S. & C. 279.

The only testimony in this case tending to show the purpose for which the company acquired these lands, is to the effect that they were purchased to secure a right of way for its road through the same. If such purchase, in the exercise of good faith, was, by the company, deemed convenient or necessary to secure the right of way for the road, it is clear that the power granted by the statute was ample for the purpose. If, however, it were shown that the company abused its discretion and power in making the purchase — that, in fact, the purchase of the whole of these lands was not convenient or necessary to secure the right of way for its road — still, we think, that the lands having been purchased by the company for a valuable consideration, and having afterward been conveyed to the plaintiffs, the title became indefeasible in them. In no event, under the laws of this state, would the property escheat; and the vendor of the company, and the company itself, having executed the conveyances and delivered possession, would be estopped from questioning the validity of the plaintiffs’ title. Whatever consequences might result to the corporation, if the state were to inquire into the abuses of its charter, it is quite certain that the title to these premises in the possession of the plaintiffs below or their assigns, would not be affected by such inquiry. 3 Rand. 136; 7 S. & R. 313; 11 S. & R. 411; 7 Penn. St. 233; 4 Johns. Ch. 370; 4 Sandf. Ch. 758; 9 Humph. 306; Land v. Hoffman et al., 12 Am. L. Reg. 143, Sup. Ct. of Missouri.

III. It is also claimed that the plaintiffs below were not entitled to the decree for specific performance, because the title tendered to the defendant was subject to certain incumbrances.

Previous to the conveyance of these lands by the railroad company to the plaintiffs, and in fact before the railroad was constructed through them, the company had executed two mortgages to one Taylor, as trustee, to secure the holders of the company’s bonds, upon the following described property, to wit:

“ The road of the said party of the first part from Marietta, and Belpre to Cincinnati and Dayton, and Hillsboro, whether made or to be made, acquired or to he acquired, and all property, real and personal, of said party of the first part, whether now owned or hereafter to be acquired, used or appropriated for the operating or maintaining the said road extending from Marietta and Belpre, as aforesaid, and all the priveleges and franchises of said party of the first part for the holding, operating, and maintaining the same, together with the income thereof.”

At the time of trial below, these mortgages were unsatisfied. The testimony shows that the railroad was not located on the lands embraced in the purchase of the defendant below, nor were the lots purchased by him ever used or appropriated for railroad purposes. The question, then, is this: Was the entire tract of land embraced in the-, mortgages? We think not. The words “ used or appropriated for the operating or maintaining the said road,” restrict the operation of the granting words contained in the mortgages, to such property, personal or real, of the company, as then was or thereafter might be used or appropriated for operating or maintaining the road. Any property which the company then owned, or afterward acquired, which has in fact been used or appropriated for operating and maintaining the road, and none other, is subject to these mortgage liens. The defendant’s purchase, therefore, was not incumbered by th§se mortgages.

In May, 1869, one William M. Picksley recovered a judgment in the Superior Court of Cincinnati, against the Marietta and Cincinnati Railroad Company, for $5,000, and costs. This judgment was a lien upon the lands sold to the defendant below, and was in full force at the time of ■decree for specific performance. No provision was made in the decree for the protection of the purchaser against this lien, by application of the purchase money or otherwise.

The defendants in error do not contend that the plaintiff in error should have been compelled to perform his contract and take the risk of having his property afterward •subjected to the -payment of this judgment; but they ■claim — 1. That this judgment has been superseded, and is now under review on proceedings in error in this court; and 2. That the judgment debtor is possessed of ample property, which must be exhausted before the property in ■controversy can be subjected to the payment of the judgment.

These arguments may be answered in several ways: 1. The facts upon which they are based do not appear in this re•cord; 2. If the facts be admitted, still the lien of the judgment is preserved notwithstanding a supersedeas bond may have been given, and if the judgment be affirmed, it is not at all clear that equity would compel the judgment creditor to first exhaust the property remaining in the railroad ■company before he could have satisfaction out of the property in question; and 3. At all events the purchaser should not be required to assume either the risk or expense of prosecuting an action to compel the judgment creditor to seek satisfaction out of other property of the judgment debtor.

We think the liability of the lots in question to be taken for the satisfaction of this judgment, is quite too imminent, to justify a decree for specific performance against the purchaser, without at least protecting him against such hazard, by an application of the purchase money to the discharge of the judgment.

The lots of land in controversy are parts of a certain tract or tracts conveyed by the Marietta and Cincinnati Railroad Company to the defendants in error on the 22d of May, 1869. The line of the grantor’s railroad was located upon the lands thus conveyed. The conveyance was by deed-poll, which contained the following stipulation s, viz:

“But said tracts, and each of them, are subject to the-obligation hereby imposed upon the grantees to discharge, and save harmless, the grantor herein from the duty of building or maintaining any fence on either side of its-track through or between said lands; and said grantees, in accepting this deed, assume said duty and obligation, and bind themselves, their heirs and assigns, to build and perpetually maintain, along the lines of the railroad of the-grantor, on each side thereof (except where the same may be intersected or crossed by streets, alleys, or public ways), so far as said railroad runs through or between either of said parcels of land, or is contiguous thereto, a good and substantial fence.”

It is claimed by plaintiff in error, that these stipulations constitute a covenant on the part of the grantees to build and perpetually maintain the fences named; that this covenant runs with the land, so that the defendants in error were unable to convey the lots by him purchased, with title perfect and unincumbered, as they had contracted to do.

If it be conceded that it was competent for the parties to that conveyance to impose upon the lands conveyed a servitude or burden for the benefit of lands retained by the company for the use of its road; and if be further conceded that such burden, if the parties so intended, would attach to every part of the servient estate and follow it into whosesoever hands the same or any part of it might come, then, it is necessary to inquire, in the light of the surrounding circumstances, whether such was the intent of the parties in this case.

¥e think it quite certain that the parties to this deed contemplated, at the time it was made, that the land would be disposed of in subdivisions or building-lots. It was in fact sold in lots, at public auction, within sixteen days from the date of the deed. The plat of the subdivision was made and advertised before the auction. In the deed itself, fences are excepted where the lines of the railroad might be intersected or crossed by streets, alleys, or public ways. If such subdivision and sale of the premises, in lots, were contemplated by the parties, it is unreasonable to hold that any lot was intended to be burdened with the maintenance of fences against which it does not abut.

The lots purchased by the plaintiff’ in error are not contiguous to the lines of the railroad, but are situated at considerable distance therefrom. Several other lots intervene between them and the line of the road. And whatever may be the burden (if any) which rests upon lots abutting on the line of the railroad, as to maintaining fences thereon, we think the plaintiff in error has no reasonable grounds to apprehend any loss or inconvenience from the supposed incumbrance of maintaining fences, as provided for in this deed.

IV. It is also claimed by plaintiff' in error, that he was entitled to avoid the sale on the grounds of fraud, in this, that notwithstanding the property was offered at auction, on the condition that the sale should be without reserve, yet the vendors secretly employed bidders for their own benefit.

“ Sale positive” was one of the conditions of the auction, and we agree with counsel for the plaintiff in error, that these words are equivalent to “ sale without reserveand we also agree with them, that when a sale at auction is announced to be without reserve, it is a fraud on the part of the vendor to employ a bidder to keep up the price on his behalf, and that such fraud is a bar to an action for specific performance. At such sale, it is the right of the highest bidder to have the property knocked down to him, under any and all circumstances, without reference to the ■amount to which the bidding may go. TJ pon examination ■of the testimony, however, we are not satisfied that such fraud was committed at this sale, by the vendors or their agents. It is true that one of the auctioneers procured a person (who did not intend to take the property at his own bid) to bid at the sale; but we are not satisfied that such •employment was not authorized by another person for whom the bid was intended, and who was ready and willing to bake the property at the bids thus procured, if they had proven to be the highest bids. It is also true that one John Ryan, who had some interest in the sale, jointly with the defendants in error, bid in good faith, and purchased some of the lots on his own account. This, however, was not bidding in violation of the conditions of sale, as it could, in no event, have prevented a sale to the highest bidder.

From this view of the case, it follows that the judgments below must be reversed for error, in admitting in evidence the deed from the railroad company to the plaintiffs below, without proof of its due execution; in finding that the title of defendants was such as they had contracted to convey, and in decreeing specific performance without protecting the purchaser against the lien of the judgment in favor of Picksley.

Judgments reversed, and cause remanded for further proceedings.

Day, C. J., Welch, Stone, and White, JJ., concurred.