Court Opinion

ID: 6509784
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:21:21.227632+00
Date Added: 2024-06-11T15:54:50.578938
License: Public Domain

STONE, J.-
The argument is suggested that by the purchase of the property in controversy, The New Orleans, Mobile & Chattanooga Bailroad Company did an act ultra vires, and that, therefore, the railroad corporation did not acquire any title which it could convey or pledge by mortgage deed. The title of plaintiff below — appellee here — rests on these foundations : First, a legal title to the premises in the defendant corporation; second, a judgment and execution lien against such corporation ; and, third, a levy upon, and sale and conveyance of the title of the lands to the plaintiff below. A purchaser at sheriff’s sale acquires only such title as the defendant in execution had; and if his ownership be not a legal title, the holder of such deed can not maintain ejectment. — See You v. Flinn, 34 Ala. 409, 415, and authorities. Both parties, plaintiff and defendant, in the court below, trace their title to a common origin, the New Orleans, Mobile & Chattanoog Baailroad Company. Donovan, the plaintiff, was required to show a legal title in the corporation to maintain his suit; while the defendant could stand still and rely on the weakness of his adversary’s title. We think the doctrine of estoppel can not be invoked in this case to benefit appellee. His purchase at sheriff’s sale is an affirmation that the railroad corporation held a title— a legal title. His success in this suit depends on that. He cannot be heard, in one and the same suit, to assert that other and incompatible proposition, that the corporation owned no property or interest in the lots which it could convey. The railroad company either had title, or it had not. We think both parties are estopped from disputing the common source of their titles.— Gantt v. Cowan, 27 Ala. 582.
If the contract by which the railroad company acquired the lots had remained executory, and there had been a suit to enforce such contract, or to recover for its breach, then the question of ultra vires -would have been material; and if successfully asserted would have defeated a recovery, whether the suit was brought by or against the corporation.— Grand Lodge v. Waddill, 36 Ala. 313; Waddill v. Ala. & Tenn. R. R. 35 Ala. 323; Dil. Munic. Corp. § 381, and note 2, 749 ; Abb. Corp. 258, §§ 414, 415; 870-1, §§ 3, 4, 12 ; Cooley Cons. Lim. 196.
And in some other forms of proceeding, such, for instance, *256as a proceeding to vacate the charter for misuser, or to set aside the contract as without the pale of the corporate authority, by one or more persons interested in the corporation, the question we are considering would be pertinent and important. — Abb. Corp. 413, § 1, et seq; Whitman G. & S. Mining Co. v. Baker, 3 Nev. 386.
It is neither a ground of recovery or defense in this action. —Abb. Corp. 258, §§416, 423; Ib. 870-1, §§9, 10, 11; Whitehead v. Vineyard, 50 Mo. 30; 3 Nev. 386, supra; Waldo v. Chicago St. P. R. R. Co. 14 Wisconsin, 575; Farmers & M. Bank v. Railroad Co. 17 Wis. 372.
We think the sole question necessary to be considered in this case is, whether the mortgages embrace and convey the lots and wharves in controversy. If the terms of the granting clauses are broad enough and specific enough to include them, then we think there is no question that the title to the defendants is paramount to that of plaintiff. On the other hand, if the mortgages do not convey them, then the plaintiff has the superior title. We quote from the act of incorporation only as aid in enabling us to determine the true meaning and scope of the mortgage conveyances.
The act which incorporated the New Orleans, Mobile & Chattanooga Eailroad Company (now New Orleans, Mobile & Texas Eailroad Company), approved Nov. 24,1866 — Pampb, Acts, 6 — contains the following grants of power ; and, it fis believed, none other that bear on any question presented by this record:
By section 1, the corporation is “authorized to have and to hold real and personal property for the object, purpose, and business of said corporation within this State, or within any other State, sovereignty or government that may sanction, authorize, and permit the same.”
By section 3, “ to own and possess any real and personal estate that may be granted, devised or given to it, by or from any person or persons, corporation or association, and to obtain by purchase, and to own and possess any real and personal estate that may be necessary and convenient for the construction, maintenance, and management of the said railroads, .... to take and hold for the same and for the purpose of necessary depots, stations, cuttings, turnouts, and for obtaining stone, and gravel, and timber for the construction of said railroads, and lands belonging to the said State of Alabama, and extend along or adjacent to the route or course of said railroads, that may be necessary for the construction, maintenance and security of said railroads; and said corporation is also hereby authorized to lay out their said railroads, or either of them, within the State of *257Alabama, not exceeding two hundred feet wide, upon any lands within said State, and to take and possess the same ; and for the purpose of necessary turnouts, depots, cuttings, and embankments, and for obtaining stone, gravel, and timber for the construction and maintenance of said railroads, to take and possess as much more lands as may be necessary for the construction, maintenance, and security of said railroads.”
Section 6 contains the following language: “ That said corporation, being hereby authorized to purchase, receive, and hold such real estate as may be necessary and convenient in accomplishing the object for which this corporation is organized, it may, by its agents, surveyors, engineers, servants, enter upon all lands and tenements through which it may conclude to make such railroads; and survey, lay out, and construct the same, and may agree and contract for the land, right of way, with the owners of the land through which it extends, to make said roads.”
Section 15 : “And, in like manner, this corporation may obtain, by purchase or grant, from any person or corporation, and afterwards maintain, manage, use, and enjoy any railroad, railroad property and appurtenances, any steamboats, piers, wharves, and the appurtenances thereunto belonging, that the said directors may deem necessary, profitable and convenient for this corporation to own, use, and manage in connection with its said railroads.”
Section 17 : “ That this corporation is authorized and empowered, from time to time, to borrow money, or to purchase property upon its own credit, for the purpose of constructing and maintaining said railroads, or establishing continuous and connecting line'of railroads, as heretofore provided ; and, as evidence of the indebtedness of said company for such loans, on the purchase of said property, may issue its corporate bonds and promissory notes, bearing interest at a rate not to exceed eight per'cent, per annum, and to secure the payment of said bonds and notes, may mortgage its railroad, its capital stock, its corporate franchises, and any of its real and personal property, or any part or portion of the same.”
On the first day of January, 1869, the said railroad corporation executed its first mortgage to trustees to secure the payment of its first mortgage bonds, about four millions of dollars in amount; and therein conveyed “the railroad of the party of the first part, lying between the city of New Orleans, in the State of Louisana, and the city of Mobile, in the State of Alabama, and within the limits of said cities, as the same is located, surveyed, and constructed, or shall be here-*258ai'ter constructed, by the party of the first part in the States of Louisiana and Mississippi, and Alabama, and on the route and line of said railroad, between the cities aforesaid, including the right of way and all other rights, interests and estate of the party of the first part, in and to the lands occupied by said railroad, or hereafter acquired, owned and occupied by said party of the first part, including all depots, station-houses, engine-houses, car-houses, freight-houses, wood-houses* or sheds, and all machine-shops, and other shops and buildings now owned and occupied, or hereafter acquired, in connection with the said portion of said railroads, situate or lying upon or within the limits of said cities, or upon or adjacent to the said portion of said railroad and the route or line thereof, together with the superstructure and tracks thereon, and including the iron rails, and all the appurtenances thereof; also, all rolling stock, engines, cars, tenders, tools, machinery, fixtures, fuel, and materials, and all other personal property appertaining to, or used, or hereafter used, by the party of the first part, exclusively, for the constructing, operating, repairing or replacing of said portion or section of its railroad, in and between said cities of New Orleans and Mobile, or any part thereof, now belonging to the said party of the first part, or to be by the said party of the first part hereafter acquired and applied to the use of said portion of said railroad; also, all the franchises, rights and privileges of the party of the first part, corporate or otherwise, to construct, maintain and manage said portion or section of its said railroad, or connected with or relating to the same, or the construction, maintenance, or use thereof, ... together with all and singular the tenements, hereditaments and appurtenances thereto belonging, or in anywise appertaining, and the reversions, remainders, tolls, incomes, rents, issues and profits thereof; and, also, all the estate, right, title, interest, property, possession, claim and demand whatsoever, as well in law as in equity, of the said party of the first part, of, in and to the same, and any and every part thereof.”
On the 8th day of March, 1869, the said corporation made a second mortgage to trustees, to secure the payment of its second mortgage bonds, about four millions additional, and therein conveyed “ any and all railroad or railroads of the said party of the first part, lying in the States of Texas, Louisiana, Mississippi, Alabama, Georgia and Tennessee, or any or either of them, constituting parts, portions or sections of its main or branch lines of railroads on the general route prescribed by its charter, or any amendment thereto, or hereafter to be authorized, whether now owned or hereafter *259to be constructed, surveyed, located or acquired, by the said party of the first part, including the right of way and all other rights, interests and estate of the party of the first part, in and to the lands occupied by said railroad or railroads, or hereafter to be acquired for that purpose, and in and to all lands owned and occupied, or hereafter to be acquired, owned and occupied by said party of the first part, for constructing, repairing, operating, or .doing the business of its said railroad or railroads, or of any such branch railroad, and used therefor, or any part thereof; and including all depots, station-houses, engine houses, car houses, freight houses, storehouses, wharves, warehouses, wood houses or sheds, and all machine shops, repair shops, business offices, and other shops, offices and buildings, now owned and occupied, or hereafter to be acquired, and used in connection with its said railroad or railroads, or branches, or any part thereof, together with the superstructure or track now thereon, or hereafter to be placed thereon, and including the iron, rails, and all the appurtenances thereofalso, all rolling stock, engines, cars, tenders, tools, machinery, steamboats, tugboats, and other boats and vessels, and their engines, boilers, machinery, tackle, apparel and furniture, fixtures, fuel and materials, and all other personal property appertaining to or used, or hereafter to be used, by the party of the first part, exclusively for the constructing, operating, repairing, replacing, or conducting the business of its said railroad or railroads, or branches, above mentioned, or any part thereof, now belonging to the said party of the first part, or to be by the said party of the first part hereafter acquired and applied to the use of said main or branch lines of its said railroad or railroads, or any part thereof; also, all the franchises, rights and privileges of the said party of the first part, corporate or otherwise, to construct, maintain and manage said railroad or railroads and branches, and every part thereof, or connected with or relating to the same, or the construction, maintenance and use thereof, or any part thereof, whether derived from the State of Alabama under its said act of incorporation, or from grants from other States, or from the United States of America, or from any counties, cities, towns, or corporations, or from any person or persons whatsoever or whomsoever; and also the right and privilege to receive the tolls, rents and incomes to be had therefrom, and the exercise of the same upon all parts thereof, and in all States, counties, cities, towns, and all places within or through which the same, or any part thereof, is now or shall hereafter be constructed and operated, together with all and singular the tenements, hereditaments and appurtenances thereto belonging, or in *260any wise appertaining, and tbe reversions, remainders, tolls, incomes, rents, issues and profits thereof, and also all the estate, right, title, interest, property, possession, claim and demand whatsoever, as well in law as in equity, of the said party of the first part, of, in and to the same, and any and every part thereof.”
The term railroad, in its broadest sense, has been sometimes ruled to be very comprehensive, and to include within it the franchise, easement or right of way, road-bed, superstructure, depot buildings, turn-outs, rolling stock, shops, tools, materials, and all other property, real and personal, owned and used in connection with the road, or its operation. Pierce v. Emery, 32 N. H. 484. The grants of power to acquire real estate, found in the act incorporating the New Orleans, Mobile & Chattanooga Railroad Company, are attended and qualified by the expressions, “ that may be necessary, convenient, for the construction, maintenance, management, security of the railroad.” The clause most relied on by appellants — that which gives authority to acquire steamboats, piers, wharves, &c. — limits the power of the directors in the matter of their purchase, to such as they may “ deem necessary, profitable and convenient for this corporation to own, use and manage in connection with its said railroads.” So, in the mortgages, qualifying clauses abound; such as, “ the lands occupied by said railroad, or hereafter acquired, owned and occupied by said party of the first part, including all depots, &e., now owned and occupied, or hereafter acquired, in connection with the said portion of said railroads, situate or lying upon or within the limits of said cities, or upon or adjacent to the said portion of said railroad and the route or line thereof.”
The clause in the second mortgage most relied on is as follows : “Including all depots, station houses, engine houses, car houses, freight houses, store houses, wharves, warehouses, wood houses or sheds, and all machine shops, repair shojDS, business offices, and other shops, offices and buildings, now owned and occupied, or hereafter to be acquired and used in connection with its said railroad or railroads, or branches, or any part thereof, together with . . steamboats, tug-boats, and other boats and vessels, and their engines, boilers, machinery, tackle, apparel and furniture, fixtures, fuel and materials, and all other personal property appertaining to, or used, or hereafter to be used by the party of the first part, exclusively for the constructing, operating, repairing, replacing, or conducting the business of its said railroad, or railroads or branches above mentioned, or any part thereof.”
*261It will thus be seen, that jiot only all the grants of power to acquire property found in the charter, but all the words of conveyance employed in the mortgages, speak of property to be owned, occupied and used in the construction and operation of the road, or in connection therewith. Property, real or personal, not wanted or used for one of these purposes, or in connection with one of these purposes, has no clause in either of the mortgages to cover it.
In the State v. Commissioners of Mansfield, 3 Zabr. 610, the question was, whether a legislative commutation, or exemption from taxes, accorded to a railroad company, exempted from levy and assessment of taxes, certain houses owned by the railroad company, “ situate near the line of their road, and used exclusively by workmen and mechanics in the employ of the company.” The charter of the company declared “ that no other tax or impost shall be levied or assessed upon the said company.” The court ruled that the houses did not fall within the exemption, and employed the following language: “ Power to construct a railroad, and establish transportation lines upon it, necessarily includes the essential appendages required to complete and maintain such a work and carry on such a business; as the power to erect and maintain suitable depots, car houses, water tanks, shops for repairing engines, &c., houses for switch and bridge tenders, coal or wood yards for fuel for the use of their locomotives, &c., and these are within the fair construction of the exemption clause, because they are necessary and indispensable to the operations of the company, and the accomplishment of the objects of their charter. But there must be a limit somewhere to this incidental power of the company to enlarge its operations and extend its property, without taxation, under this exempting clause, and that limitation, I think, must be fixed tuhere the necessity ends, and the mere convenience begins. The necessary appendages of a railroad and transportation company are one thing, and those appendages which maybe convenient means of increasing the advantages and profits of the company are another thing.”
In Walsh v. Barton, 24 Ohio State, 28, the question, as in this case, was between an execution purchaser and a prior mortgagee. The court said: “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 mortgage? We think not. The words “used or appropriated for the operating or maintaining the said road,” restrict the operation of the granting words, con*262tained. in tbe mortgages, to snob property, personal or real, of tbe company, as then was, or thereafter might be, used or appropriated for operating or maintaining the road. Any property which tbe 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 mortgages.” In Parrish v. Wheeler, 22 N. Y. 494, a railroad corporation had given a mortgage on its real estate, railroad, bridges, ferries, &c., locomotives, engines, cars, tenders, shops, tools and machinery, and “all other personal property whatsoever, in any way belonging or appertaining to the said railroad of the said company.” Canal boats were purchased and paid for with the funds of the corporation, and used and run by it in connection with the railroad, but beyond its termination. It was held the canal boats did not pass by the mortgage.
In Shamokin Valley Railroad Co. v. Livermore, 47 Penn. State, 465, a railroad company, holding town lots adjoining their road bed, ostensibly for a train to connect with river navigation, having mortgaged the entire road with its corporate privileges and appurtenances, but without specific mention of the lots, became embarrassed, and the mortgaged property was sold under proceedings thereon by the sheriff; the lots having been again sold under execution, against the company, and bought by the plaintiffs therein, in an ejectment therefor by them against the purchasers under the mortgage, the jury were instructed that if the lots were not appurtenant to the road, and essential and indispensably necessary to the enjoyment of its franchises, and as such included in the mortgage, the plaintiffs were entitled to recover; referring the question of appurtenancy and necessity to them as matters of fact. It was held that the instruction was free from error. We think the word “indispensably” before the adjective “necessary,” states the rule too strongly; and that it should have been omitted.
In Dinsmore v. Racine and Mississippi R. R. Co. 12 Wisconsin, 649, the granting clause of the mortgage was: “The railroad company granted and sold,” &e., “all their, railroad, with its superstructure', track and all other appurtenances, made or to be made in the State of Wisconsin, . . and all the right and title of the said parties of the first part, to the land on which the said railroad is and may be constructed, together with all rights of way now acquired and obtained, or hereafter to be acquired or obtained by the said parties of tho first part, and including the depots, engine-houses, shops and other constructions at the city of Racine aforesaid, and at said town of Beloit, and all other places *263along the line of said railroad, and the lots, pieces or parcels of land on which the same are o? may be erected, and all the pieces of land which shall be used for depot and station purposes, with the appurtenances, and all the embankments, bridges, viaducts, culverts, fences and structuary thereon, and all other appurtenances belonging thereto, and all the franchises, privileges and rights of the said parties of the first part, of, in, to, or .concerning the same, . . to have and to hold the said premises and every part thereof, with the appurtenances, unto the said parties of the second part.” The railroad company had purchased a tract of land, detached from the track of the railroad, “for the purpose of getting wood and timber therefrom, to be used on said railroad.” The question was, whether these lands passed by the mortgage? It was ruled that they did not. To the same effect are Seymour v. C. & N. F. R. R. Co. 25 Barb. 284; Vt. Gen. R. Co. v. Burlington, 28 Vt. 193; Galveston Railroad Co. v. Cowdrey, 11 Wall. 459. And we do not consider the following authorities, rightly understood, as warring in the least with these views.' — Harris v. Elliott, 10 Pet. 25; Wilson v. Boyce, 2 Otto, 320; Dillon v. Barnard, 21 Wall. 430; Whitehead v. Vineyard, 50 Mo. 30; State v. Nor. Gen. Railway Co. 18 Md. 173. In Pierce v. Emery, 32 N. H. 485, it was held that the mortgage conveyed everything the corporation possessed ; and, even with that predicate, it would not be safe to adopt the reasoning of the opinion, as a guide in other cases. See, also, Meyer v. Johnston, 53 Ala. 237.
It results from what we have said above that the mortgages conveyed only such property, real and personal, as was useful and necessary, and employed in the construction, maintenance, operation, preservation, repair, or security of the road; and that property owned or acquired, and not used, or to be used in connection with the railroad, and in promotion of the direct and proximate purposes of its construction, was not thereby conveyed. Buying off an opposition line of steamers, with a view, not of employing, but of withdrawing them from the field of competition, with all attendant stipulations and incidents, falls without the pale of powers conferred by the act of incorporation, and is not covered by any provision in the granting clauses of the mortgages.
The several rulings of the Circuit Court, excepted to, are in accordance with the views above expressed, and the judgment of the Circuit Court is affirmed,