Court Opinion

ID: 6967332
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:56:13.718324+00
Date Added: 2024-06-11T16:08:40.229838
License: Public Domain

Mr. Justice Wilkin delivered the opinion of the court: The only question presented for our decision is, whether appellants are, under the allegations of their bill and the proofs in the record, entitled to a first lien on the mortgaged property for money paid out by them for right of way and expenses incurred in procuring same, as against appellees, the Home National Bank and Henry Harms. There is nothing in the bill to indicate the head of equity jurisdiction under which the complainants claim the relief prayed for, and we are unable to discover any principle upon .which it can be sustained. The circuit court seems to have treated the bill as one to enforce the performance of the agreement of the construction company to deliver to complainants bonds at seventy-five cents on the dollar to secure them for expenditures in obtaining the right of way, the decree treating that amount of bonds as actually delivered, but only allowing complainants a pro rata part of them. It is not pretended that any such case is made by the bill or supported by the evidence. The Appellate Court, in its opinion, discusses the proceeding as one to enforce a vendor’s lien for the right of way; but that theory is repudiated by counsel for appellants, and their right to relief placed upon the doctrine of contribution, the position being stated thus: “The right of each to the bonds respectively held by them relates to the date of the mortgage. At that time the railway company had no title to the land upon which the road was built. Appellants and appellees were co-mortgagees of a property to which the mortgagor had no title whatever. The several holders of the outstanding, adverse title might have brought ejectment and ousted the railway company. The superstructure and franchises of the road would have been practically worthless without the right of way. Appellants bought in and paid for the adverse title, and the purchase inured to the benefit of each of the co-mortgag'ees in the proportion in which each held mortgage bonds. Upon clear, equitable grounds appellants are entitled to contribution from appellees.” The attempt is to liken the case to one in which one joint owner removes a burden from the common property, which inures to the benefit of all, or makes advances of his own means to preserve the joint property. “The equity for contribution arises when one of several parties who are liable to a common debt or obligation discharges the same for the benefit of all.” (Bispham’s Principles of Equity, sec. 328.) The doctrine is frequently applied between tenants in common or joint holders of property, but we are unable to see how, under the facts of this case, it can be availed of by appellants. The money paid by them for right of way was not for the purpose of removing a prior incumbrance upon the mortgaged property, but in pursuance of their contract with the construction company. The validity of the mortgage or trust deed conveying the right of way, with other railroad property, in no way depended upon the payment of that money. The mortgage, when executed, legally conveyed all the railroad property of the mortgagor of every kind, acquired “and to be acquired.” A mortgage by a railroad company to secure bonds, which declares it shall include all property acquired and to be acquired, operates upon after-acquired property as soon as it is obtained. Such is the settled law of the Federal courts and generally of State courts as well. 1 Jones on Mortgages, 152, and cases in notes 2 and 3; 2 Elliott on Railroads, sec. 497, and cases in note 5. The contention that the right of way was not in fact after-acquired property amounts to saying that it was never acquired by the railroad company, and that position is wholly irreconcilable with the theory of complainants’ bill, because, in so far as it seeks to enforce the lien as security for the bonds held by them, it is treated as a valid mortgage upon that as well as all other railroad property. Moreover, the position that the title to the right of way did not rest in the railroad company because the deeds were never delivered to it cannot be sustained. Appellants, by their agreement, undertook to obtain the right of way for the railroad company, “the title to rest in said railroad company.” By this agreement they became the agents of the company to obtain these deeds of release, and it will scarcely be denied that a delivery of them to such agents became, in law, a valid delivery to the company, the grantee. Clearly, the title to each piece of right of way vested in the railroad company as those deeds were executed to it and delivered to appellants, and when the bill was filed all of the right of wa.y was after-acquired property, and had become subject to the lien of the mortgage. The fact that the deeds were not recorded is immaterial. It is not true, as a matter of fact, that the right of way was bought and paid for for the benefit of the holders of the bonds thereby secured. It is impossible to escape the conclusion, upon this record, that appellants are simply seeking to visit the consequences of the construction company’s failure to perform its agreement upon innocent third parties. It is nowhere alleged in the bill, nor is there any evidence tending to show, that the Home national Bank or Henry Harms in any way contributed to the breach of that contract, or that they even had notice, at the time they accepted their bonds, that the contract between the construction company and appellants existed or had not been fully performed. They are charged with no fraud or collusion whatever, and the facts proven are wholly consistent with their perfect good faith in accepting the bonds, which were delivered to them as security for debts tona fide due them. There is no principle upon which they can be held liable to contribute for the loss which appellants may have sustained by the failure of that company to deliver the bonds contracted for by it with appellants. We have carefully considered the extended argument of counsel for appellants, and are clearly of the opinion that on this branch of the case the bill is without equity, and that the judgment of the Appellate Court reversing the decree of the circuit court is right. It will accordingly be affirmed. Judgment affirmed.