Court Opinion

ID: 7102655
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:17:21.455403+00
Date Added: 2024-06-11T16:13:27.715938
License: Public Domain

Seevers, J.,
(dissenting.) When the state granted to railroad corporations the right to mortgage their incorporate property, it clearly was contemplated that the mortgages might be foreclosed, the property sold, and purchased either by a natural person or another corporation. This being so, what does the purchaser obtain at the sale? Without doubt, I think, he gets the mortgaged property, and the right to operate the road. Unless he obtains the latter, the property would be comparatively valueless, and the right to mortgage a barren, instead of a substantial, right. In my judgment, the purchaser obtains a perfect and absolute title to the mortgaged property, except against valid and existing liens of record, or of which the purchaser has express notice.
It is not claimed, in the foregoing opinion, that the tax, or 'any right or obligation growing out of it, constituted a. lien on the mortgaged property. Nor is it claimed that the acceptance of the tax created a contract of any kind between *420the corporation executing the mortgage and the state, or any citizen thereof. In my judgment, the right to mortgage not only exists, but may be exercised freely by the corporation, as its interest may dictate. The corporation may execute a mortgage on a part of the road at one time, and afterwards upon another part. Upon the foreclosure of such mortgages, the road may be severed, and thereafter adversely operated. This was the case with the Des Moines Yalley road. When the purchaser obtains a railroad under a foreclosure and sale under a mortgage, he may use and control it as he ■ sees proper, unless he is prohibited from so doing by some statute, and I do not understand that it is claimed there is such a statute. On the contrary, the statute provides that the owner may lease the road. This necessarily includes the power to lease the whole or a part, unless the owner has entered into some contract or assumed some obligation to the public or individuals which prevents him from so doing. In this case the existing corporation entered into no such contract or obligation. It is a separate and distinct corporation, organized under the statute, and exists independently of the prior corporation. It therefore cannot be said to have assumed an obligation of the prior corporation, of which it had neither express nor constructive notice. This, it seems to me, must be true, in the absence of a statute which either expressly or by necessary implication so provides. In my judgment, the district court erred in entering the decree it did. '