The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-04-03

| The road itself was originally the West
| ern Railroad and it was gradually built,
| with extensions from time to time allow
| cd by the General Assembly, starting
| from Fayetteville The act Of 10th of
| February, 1865, provided for an East
| ern division and n Western division OF
this road, and required lien on each OF
| these divisions severally to secure certain
bonds made by the State in aid OF the
| road This is the distinct recognition
| 10y the State that divisional mortgages
| are not against her policy. The only
| authoritative and admissible credencc of
| the public policy Of Il State on any given
| subject are its consultation, laws and
| judicial decisions Swami W. swami,
y Fed. Rep, 299)
| The reason for the adoption OF this
| feature in this mortgage ia not hard to
find. When it was executed there was
| COMPLETED road in actual and successful
| operation between Greensboro andd the
| South Carolina line. We can safely say
| that 1t had bonds in existence secured by
| n lien ON It's road These bonds had
| to be retired. The II division was only
| in process OF construction. The q diyis-
| ion was not yet begun. An exchange and
| surrender Of bonds could bc more easily
affected il the new bonds covered the
same property. The money raised upon
| the bonds Of the II and & divisions re-
spectively was applied 10 the compile
ton OF the division or which IL was
raised This seemed attractive. What
ever may have been the reason, this sep
sration or the divisions in the mortgage
dodes not impair the validity Of the mort
gage. Pullan VS.. G. and G. X. X. Co.
Federal Cases II, 4Gl; 4 Bisscll, 80:
JOY & Jackson vs.. Michigan Blankroad
Co. II Mich. 1876: Campbell vs.. Texas
and New Orleans Railroad Co. = Woods,
2633
1t has been urged with great earnest
ness and power that a sale by division
would be futile That under the law
Of North Carolina the franchise being
an indivisible unit, could not under n
sale be separated, and passed to two
or more purchasers of the several
parts. And the franchise of this corpora
ton is for a single road from the noun
tains to the sea.
Unassisted by any decision OF the SUI
preme Court OF North Carolina, this court
must reach its own conclusion on the
point. The statute law OF North Caro-
lima does not in every case provide for
the continued existence OF the franchise
of a railroad corporation, whose property
has been sold under foreclosure. Sec
ton Cos Of The Code, it is true, provided
for such continuance, but that it not the
only provision. Whenever such foreclos-
ure shall take place, the purchaser takes
the property and may with his associates
obtain corporate powers under section
1886. but the corporation so framed is
new corporation with the pow
ers franchises. and privileges, and sub
jet to all the provisions of the general
law. The language Of the statute is
clear and unambiguous. 1t is in these
words: Section 1886, Code of North
Carolina. 1883: Whenever the purchas-
err or purchasers of real estate, track and
fixtures OF any railroad has" heretofore
been sold or may hereafter be sold by
virtue OF any mortgage executed by such
corporation, shall acquire title to the
same in the manner prescribed by law.
such purchaser or purchasers may asso-
ciate with him or them any number of
persons and make and acknowledge and
file articles OF association as prescribed
in this chapter, such purchaser or pur-
chasers and their associates shall there
upon be a new corporation, with all the
powers, privileges and franchises and
subject to all the provisions of this chap
ter"
AS has been said, the problem rs how
shall all this property bound in this COM
plcated way by different liens, be sold,
and when sold how shall the proceeds be
divided?
The testimony submitted by the special
master presents the different answers
made by experts to the last part of this
problem. These answers are all based
on estimates and conjecture and these
depend upon the result of figures, it must
be confessed not q certain mode of read
| ing conclusions.
The usual and perhaps the best mode
Of ascertaining the value of property at
| judicial sales is by public auction. If
! conducted fairly and openly, this mode
of sale can ascertain and fix more nearly
it's then existing value. 1t is not perfect,
but it is nearer to perfection than any
| other. Were each division put up sep
arately the result would establish its
| market value. II the aggregate sales by
| division exceeded the amount bid for the
entire trunk line, afterwards put up as
| whole, the question would be solved. If,
| however, the trunk line should bring
| more than the aggregate OF tie bid; on
| the division, we would have pretty sure
evidence OF comparative value.
But the recent hostile legislation in
North Carolina tends to defeat this
| course. The legislature Of that State ct
| ITS last session has passed an act evil
IDENTIFY aimed at a sale Of this railroad
property. lit may be that this effort
would prove fruitless, either because the
act itself would have no constitutional
force if applied to the bonds in this suit,
or because from inadvertance or some
other cause, the wrong section of The
code was amended. Be this as it may,
| it is clear that were this property put