Court Opinion

ID: 3621046
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:02:49.018788+00
Date Added: 2024-06-11T13:49:33.969097
License: Public Domain

The mortgages, to foreclose which this action was brought, were each given to secure the payment of bonds of the railroad company for $200,000; one dated June 1, 1852, and the other July 13, 1853. Both mortgages covered all the real estate of the company, with its railroad, equipment and appurtenances, and the corporate and other franchises of the company, and both were duly recorded in the office of the clerk of the county of Clinton, where the *Page 331 
real property of the company was situate. The mortgages were given and the bonds issued for the purpose of borrowing money and providing means for the completion of the railroad and its equipment, and obviously the whole property of the company, real, personal and mixed, was intended to be pledged as security for the payment of the bonds covered by the mortgages. It may here be observed that the bonds were issued and the mortgages given under a resolution of the finance committee of the company of which the appellant, Vilas, was a member, and that he had knowledge of and was a part of the entire transaction. Neither of the mortgages in question were ever filed anywhere as chattel mortgages under the statute of 1833. Subsequently various judgments were obtained against the railroad company, and among them one in favor of Vilas for a large amount, and under executions issued upon them to the sheriff of the county of Clinton the engines, cars and rolling stock of the company were sold, and Vilas became the purchaser. The controversy between the parties involves several questions, and among them the one whether the lien of the mortgages upon the rolling stock of the company, assuming it to be personal property, was lost by the failure to file them as chattel mortgages under the statute of 1833 (Laws of 1833, ch. 279, §§ 1, 2), there having been no change of the possession.
By that act, where there is no change of the possession of the mortgaged property, the mortgage is to be filed in the office of the clerk of the town or city where the mortgagor, if a resident of the State, resides; if not a resident of the State, then in the town or city where the mortgaged property is at the time of the execution of the mortgage. While a corporation for many purposes is regarded as a citizen of the State by which it is created, it will be very difficult, if not impossible, to say in what town or city of the State it actually resides. It either resides in some one city or town, or it has no actual domicile as natural persons have, or it has a fabulous and intangible residence in every city, town and locality within the territorial limits of the State by whose authority *Page 332 
it exists. For the special purpose of the taxation of its capital stock it is in this State made to have a local habitation in the town or city where its principal office is located. (1 Rev. Stat. [Edmonds' ed.], 362, § 6.)
For the special purpose of taxing its real estate (but for no other purpose) it has been held to be a resident of every town through which its road runs. (The B.  S.L.R.R. Co. v. TheSupervisors, 48 N.Y., 93.)
In these instances the residence of the corporation is fixed for a specific purpose only, and they afford no solution of the question where a corporation resides within the meaning of the act requiring the filing of chattel mortgages. If we adopt one view, it resides in a single city or town; if the other, it resides in many places at the same time. It is very obvious that the provision of the act of 1833 was intended only to apply to natural persons and not to corporations. When the law was enacted there were very few railroads existing in this State or the United States, and the system of issuing bonds for raising money for the purposes of construction and equipment and securing payment by mortgage upon all its property was entirely unknown. It was the invention and device of a much later period, and has received the sanction and is exercised under the authority of special legislation. It is, therefore, not too much to aver that in enacting the law of 1833 the legislature had no special intent to embrace a mortgage of the franchises and rolling stock of a railroad corporation within its provisions. If the letter of that law shall be deemed to embrace this description of property it is not necessarily conclusive, for that which is in the letter of the statute is not within the statute, unless it be within the intention of the makers. (People v. Utica Ins. Co., 15 John., 381.) Or, as St. Paul hath it: "It is the letter which killeth, but the spirit which maketh alive."
Another provision of the act of 1833 is worthy of notice. In case of a non-resident of the State, the chattel mortgage is to be filed in the town or city where the mortgaged property is at the time of the execution of the mortgage. A *Page 333 
corporation existing under the laws of this State can never become a non-resident in any legal sense. It is incapable of migration, so that there can be no change of its domicil, if it has any. (Bank of Augusta v. Earle, 13 Peters, 519.) It may by comity extend its business operations into other jurisdictions. So, under our laws, may a corporation created by another State own and operate a railroad within our territorial jurisdiction, and, if in such case it should mortgage its real and personal property, it would be very difficult to say where it ought to be filed as a chattel mortgage under the act of 1833. Under the present system the money borrowed upon its bonds and mortgages by a railroad company is for the very purpose of completing the construction and equipment of its road. If it is in actual operation at the time of the execution of the mortgage, it is very obvious that the rolling stock must be scattered over its entire length, and what is in one place on one day is in another place on the day following. It can, from the very nature of the case, have no fixed locality in any one town or city, for comparatively few railroads are confined to such limits. By the general railroad act (Laws of 1850, chap. 140, § 28, sub. 10), corporations formed under it have power to issue bonds and "to mortgage its corporate property and franchises for completing, finishing or operating their railroad." This act imposes no condition of its being filed as a chattel mortgage to preserve its lien upon all the mortgaged property. The railroad would be nothing without the rolling stock; and in the successful operation of the road consisted the principal value of the security of the bondholders. It is not unlikely that in this case the money of the bondholders purchased the very property in question, and in equity they should have it; and that does no injustice to the appellant, for he knew all about it when he subsequently became a creditor of the company. He has no equity, and must stand alone upon the most rigid application of the very letter of the statute.
The act of May 9th, 1868, declaring that it should not be necessary to file, as a chattel mortgage, any mortgage *Page 334 
which had been or should thereafter be executed by any railroad company upon real and personal property, which has been recorded as a mortgage of real estate in each county in or through which the railroad runs, was declaratory of the law as it before existed. I am, therefore, of the opinion that the lien of the mortgages was, in no respect, impaired by the neglect to file them in any place as chattel mortgages.
This view of the case, if approved, renders the discussion of the other questions in the case unnecessary. Notwithstanding the relation of Mr. Vilas to the company, I am not prepared, without further consideration, to say that he might not, for the protection of his own private interest, become a purchaser at a public sale of the property in question, without being subject to any right of redemption from any source. But as to the question whether the rolling stock of a railroad company is to be regarded as fixtures or not, I have a decided opinion that they cannot be considered as any part of the company's real estate.
But for the reason before assigned, I think the judgment below should be affirmed, with costs.
All concur for reversal, except REYNOLDS, C., dissenting.
Judgment reversed.