The daily morning journal and courier., 1907-05-17
BOND ISSUE OF
 SHORE LINE ROAD State Treasurer Asks For
 Legal Advice. ATTORNEY GENERAL Against Unlimited Flotation. Questions As to Special
 Charter
ATTORNEY GENERAL

those $2,5OO,0OO of Shore Line bonds; Hon. F. F. Patten, State Treasurer,
 Hartford, Conn:
 Dear Sir-You inform me that the Shore Line Electric Railway Go. has executed mortgage of its property to you as treasurer of the State Gas trustee) to secure 2,50o of it's bonds of $1,000 each, and requests you to accept said trust pursuant to the provisions of Section of Chapter 149 of the Pub lie Acts of 19O5 understand that said company is not operating it's tramway, and that it has expended less than $2O0,O00 upon its railway, and that 1t contemplates the purchase of the road, property and franchise of another com pany or of other companies, but that such purchase has not yet been made. You ask me if you should accept said trust, and so far as that act would so sanction, to give the sanction of the State to the issue of said bonds and the giving of said mortgage.
 Section 1 of Chapter 149 of the Public Acts of 1905 authorized every railroad company or street railway company to issues its bonds to an amount equal to one-half the sum which has actually been expended to be shown by a certifi- cate under oath as provided in said section, These bonds before being is- sued are to be registered In the office of comptroller, who shall not permit the uncaneeled bonds so issued to ex- ceed the amount limited in the section. The manifest intent of this act is to secure a proper relation or proportion between the value of the property and of the bond issue predicated thereon, for the protection of the investing pub lie to whom said bonds are to be of fcred for sale.
 Section 2 of said act reads as follows:
 Any railroad company or street rail- way company may secure it's lawfully issued bonds by a mortgage of it's property, or any part thereof, by deed duly executed by it's president, under the corporate seal, to the treasurer of the State and his successors in office, or other trustee, in trust for the hold CTS of such bonds. Such mortgage shall be recorded in the office of the secre-
 
 tary of the State, and need not be re- corded in the records of the town with in which the property so mortgaged is situated.
 And it is under the provisions of this section that the mortgage in ques- tion is executed. If the $2,5OO0OO bonds proposed to be issued and to be secured by said mortgage are lawfully issued bonds," then it would be proper for you to act as trustee. This com- pany. I understand, does not claim to issue said bonds by authority of Chap ter 149 of the Public Acts of 1905, but by authority of it's charter granted in 1905 and approved June 6, 1905,
 Section of the charter provides that said company may issue it's bonds "un- der and subject to the provisions, linn itatlons and conditions of the general statutes relating to street railways" If the mortgage was given to secure a bond issue made under section of said charter (which would be under the pro- vision of Chapter 149 of the Public Acts of 1905), the public would be protected as the bonds secured by the mortgage could only be issued when registered by the comptroller, and only to the extent of one-half of the actual cost of construction. I am informed, however, that these bonds are claimed to be is- sued by the authority of section of the charter which reads as follows:
 Said company is hereby further au- thorized and empowered to lease or sell it's roads, property, and franchises to any other company or companies, or to unite and consolidate it's stocks, property, franchises, and roads with those of any other company or com panies, or to purchase or take in lease of the roads, property and franchises of any other company or companies, and to issue mortgage bonds in pay ment therefor; and all other companies are hereby authorized to lease or sell their roads, property and franchises, to this company, or to unite or consol- idate their stocks, property, franchises, and roads with those of this company. The powers given by this section shall pass and are hereby given to any and all companies which hereafter may ac- Quire by lease, sale, or consolidation, road. property or franchise of this company, provided, always, that upon the consummation of any such pur- chase, consolidation or lease, or certifi- cate, subscribed and sworn to Fy the president and secretary of this com pany, shall be filed with the secretary of the Sate, setting out such agree ment in full before such bonds are is sued.
 If said proposed bonds issue is claimed to be under the provision of this section authorizing it ito pur chase or take in lease of the roads, property and franchises of another road, and with no relation to the amount actually expended upon such railroad or railway, question wheth- CT the provision of said section is suf- f1ciently broad and explicit to give such authority If it should be conceded that Chapter 149 of the public acts 1905 does not supercede and repeal all spe- cial charter bonding provisions, and if it should be conceded that provisions of Section 5 of the charter of this com pany are suffiient to authorize the is sue of bonds to their full amount of the purchase price of the road, prop erty and franchises cG another road without regard to the cost of construc-