Court Opinion

ID: 4930084
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:06:16.820942+00
Date Added: 2024-06-11T08:14:26.423148
License: Public Domain

Cutting, J.
The demurrer admits the truth of all the material allegations in the bill, but the defendant, notwithstanding, denies that the plaintiffs have assigned sufficient cause to give this Court jurisdiction, or to entitle them to relief.
The bill refers to the mortgage of February 6, 1851, which we are authorized to consider as a part thereof, and to give it a construction so far as it may become necessary, under the present pleadings. It conveys in substance all the corporate property, real and personal, “unto the said Myers and his assigns, who shall become the holders of the bonds and coupons hereinafter mentioned, each in the ratio of the bonds so held by him.” — “To have and to hold the aforegranted and bargained premises, with all the privileges and appurtenances thereof to the said Myers, his heirs and assigns, and to the holders of said bonds and coupons, to their use and behoof forever.”
And the plaintiffs covenant that they have “good right to sell and convey the same to the said Myers, and the holders of said bonds in manner aforesaid.” “ Provided, they pay to said Myers, or his assigns, who shall become the holder or holders thereof, the amounts specified in the several bonds and coupons pertaining thereto,” &c. “And if said contract shall also be fully performed by said corporation in all other respects,” then said deed is to be void.
Then follows that clause in the deed, out of which it sepmg *117this controversy has mainly arisen. It is this: — “And it is further provided and a condition of this deed, that the possession and uses of said premises shall at all times remain in said grantors, so long as payment shall be made promptly, and in good faith, by said grantors of said several bonds, and the coupons pertaining thereto, as the same shall become due or payable; but upon failure thereof, for the term of sixty days, the holder of said bonds, or any one or more thereof, shall be, and hereby is, authorized and empowered to take full and complete possession of said premises and mortgaged property, personal and real, rights of way and corporate franchise, without hindrance or process of law, for the common and joint benefit and use of the holders of all the bonds, so previously issued, and whether payment then be due or not, and in satisfaction thereof; and such holders shall share, and share alike, in the disposition and sale of the same for that purpose, by public vendue, on reasonable public notice thereof to the grantors aforesaid, first deducting from such proceeds all costs and expenses incident to such possession and sale.”
The plaintiffs allege that the defendant, claiming authority by virtue of the foregoing provision, has taken possession of the corporate property, and advertised to sell the same, and reference is had to his advertisement of April 3, 1856, in which the defendant notifies the corporation that, “By virtue of the deed to me, executed by said company of the trust powers therein named, and by the concurrence of several of said bondholders, as well as in my own behalf, as grantee and bondholder, pursuant to the terms of said deed, that for breaches of the conditions and covenants in said deed contained by said company, to and with the undersigned, as contractor, and to and with the bondholders described in said deed, I did, on the thirty-first day of March, last past, and for the purposes of the deed and trust aforesaid, take full and complete possession of the premises and property therein described,” &c., “and that I shall dispose and sell the same for the purposes aforesaid, by public vendue,” &c., “to the *118full extent of the powers derived to or by me, under and by virtue of said deed, and not otherwise.”
It may perhaps become important, at some future time, should all the parties interested come properly before us on bill, answer and proofs, or by due process of law, to ascertain what the defendant’s interest is in the mortgaged premises, whether it be any thing more than as a bondholder, and whether, if there should ever be a sale, as contemplated by the condition named in the deed, it could be perfected except by means of a process in chancery, when, as in cases of trust, all parties interested may be duly represented, and their several interests protected; and whether the whole property, including the franchise, or only the right to take toll, can be legally sold; but none of these considerations are now presented, except incidentally.
The bill alleges that the clause in the proviso of the mortgage, viz.: — “And if said contract shall also be fully performed by said corporation in all other respects,” was fraudulently inserted, or was done without the plaintiffs’ authority, which the demurrer admits to be true; and if so, then for any damages for the non-performance of the construction contract, it may be questionable whether the mortgage will afford the defendant as “ contractor” any security.
As a bondholder, has the defendant the power under the mortgage to sell ? If so, he must derive his authority solely by virtue of the condition in the deed, which provides that “the possession and uses of said premises shall at all times remain in said grantors so long as payment shall be made promptly and in good faith by said grantors of said several bonds and coupons pertaining thereto as the same shall become due and payable.” The bill sets forth in substance, that all the bonds and coupons, legally issued by the plaintiffs, have been so paid, that certain bonds and coupons, subsequent to the date of the mortgage, have been illegally issued, and for which they are not legally liable, and consequently, have been justified in withholding payment.
And the bill further asserts, that the whole condition in *119the deed is void and inserted without authority, all of which the pleadings admit. Under such circumstances, it is somewhat difficult to perceive by what authority the defendant can be justified at present in any interference with the mortgaged property. But with respect to the various questions herein before referred to, we wish ■ distinctly to be understood as giving no opinion, because we cannot but be aware, from the arguments of the learned counsel, who were permitted, to some extent, to travel outside of the record, that both parties and such as may be hereafter associated with them, if any, have great and important interests, which hereafter may be presented in a more formidable shape, and that the present issue was only designed, and now by us to be considered, as to jurisdiction in the matter, as to the relief prayed for, which, if not entertained, must operate to dissolve the injunction.
The equity powers conferred by statute upon this Court, are therein enumerated, beyond which to chancery, in this State, is all forbidden ground; which circumstance is not sufficiently considered by counsel in their arguments and citations from English and American decisions, pronounced by Courts of more enlarged equity jurisdiction.
What is really the subject matter of complaint in the plaintiffs’ bill ? It is, first, that the defendant has unlawfully taken possession of their property, and secondly, that he threatens to sell it, or in other words, of an illegal interference with their just and legal rights.
It is admitted, that the defendant has obtained possession, and the plaintiffs contend that such possession is wrongful. Let the inference be drawn, and how does the alleged wrongful conversion differ from any other trespass or tort, for which the offerer has a complete and ample remedy at law ?
It is further admitted, that the defendant proposes to sell, and in his advertisement has signified his determination to convey the mortgaged property, “ to the full extent of the powers derived to or by him under and by virtue of said deed and not otherwise." Suppose the defendant should exe*120cute Ms threat, and should sell and convey to the extent of his authority, and he proposes to do nothing more, he would then be in the exercise of a legal right. But the plaintiffs say, that the deed gives him no such authority. Tf so, then the defendant’s deed would convey nothing, and no injury could be by them sustained. Again, the plaintiffs apprehend that some innocent purchaser may be ruined. It may be so, but such anticipation does not enlarge our equity powers and it is not to be presumed that the maxim of “caveat emjptor” has lost its force and influence.
The plaintiffs’ allegations, therefore, do not disclose to us any such unjustifiable interference with their rights, as to authorize us as a Court of Equity, at present, to interfere. Consequently the demurrer is sustained and the injunction dissolved.
Tenney, C. J., and Goodenow, Rice, and Hathaway, J. J., concurred.