Central Trust Co. v. Moran

29 L.R.A. 212, 57 N.W. 471, 56 Minn. 188, 1894 Minn. LEXIS 23
CourtSupreme Court of Minnesota
DecidedJanuary 12, 1894
DocketNo. 8224
StatusPublished
Cited by5 cases

This text of 29 L.R.A. 212 (Central Trust Co. v. Moran) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Trust Co. v. Moran, 29 L.R.A. 212, 57 N.W. 471, 56 Minn. 188, 1894 Minn. LEXIS 23 (Mich. 1894).

Opinion

Gilfillan, C. J.

The first and most important question in the case is whether, as against the mortgagees in a railroad mortgage or deed of trust covering the railroad, its rolling stock, and personal property, an execution can be levied on an item of the rolling stock, say a locomotive, and the property sold to satisfy the execution.

In the absence of any statute on the subject, there has been much diversity of decision, some courts (notably, the Supreme Court of the United States) basing their decisions that the levy cannot be made on the proposition that the rolling stock is part of the realty, — fixtures, as it were; others, of which Canal Co. v. Bonham, 9 Watts & S. 27, is an instance, arriving at the same result upon considerations of public policy, because the road and its appurtenances are necessary to the exercise of the franchises granted by the state; and others holding that the levy can be made, the same as upon the personal property of any other owner.

It is difficult to conceive of rolling stock, which one day may be running on the road of its owner, and the next on some other road, perhaps hundreds of miles away, as real estate or as fixtures, though, no doubt, the legislature may clothe it with some of the legal attributes of that kind of property; and while considerations of public policy may be attributed to the legislature, as a reason for its acts, we do not think they would justify a court in applying to the kind of property in question any other than the rules applied to other' property, real or personal, at common law.

We shall assume, therefore, that, but for the statute, the rolling stock covered by a railroad mortgage might be levied on as other mortgaged personal property may be.

[193]*193The statute applicable to the case is Laws 1868, ch. 56, §§.1-3; the same being 1878 G. S. ch. 34, §§ 71, 73. The first section authorizes railroad companies to mortgage or execute deeds of trust of the whole or any part of their property and franchises to secure money borrowed by them for the construction and equipment of their roads. The second section authorizes to be included in such mortgages or deeds of trust property, both real and personal, to be after-wards acquired. The last section has a- more direct bearing on the question involved, and reads: “Said mortgages or deeds of trust shall be recorded in the office of the register of deeds of each county through which the road mortgaged or deeded may run, or wherever it may hold lands, and shall be notice to all the world of the rights of all parties under the same; and for this purpose and to secure the right of mortgagees or parties under deeds of trust so executed and recorded, the rolling stock and personal property of the company properly belonging to the road and appertaining thereto, shall be deemed a part of the road, and said mortgages and deeds so recorded shall have the same effect, both as to notice and otherwise, as to the personal, as to the real estate, covered by them.”

In determining the effects of this act, it is proper to refer to the facts, for they are part of the history of the state, that it was passed in the infancy of railroad construction in the state, when it was the state’s public policy to encourage and promote such construction, and when it was known — indeed, was as certain as a mathematical demonstration — that such construction could be done only by railroad companies borrowing money for the purpose on mortgages of their roads and property. These considerations are to be borne in mind as probable reasons influencing the legislature in those parts of the act apparently intended to strengthen the security of the mortgages.

That the section above quoted means something more than merely to provide what shall be notice of the mortgagee’s rights, is evident. Had that been the only purpose, the section would have ended at the semicolon. The remainder would have been superfluous. The provision that the rolling stock and personal property properly belonging to the road, and appertaining thereto, shall be deemed a part of the road, has no tendency to give notice of the rights of mortgagees; and it must have been inserted for the purj)Ose specified in [194]*194it, to wit, "to secure the rights of mortgagees or parties interested under deeds of trust.” EEow could it secure, or tend to secure, their rights, except by placing that property on a different footing from other personal property on which there is a chattel mortgage? If that property remains just as though that provision were not in the act, and on the same footing with personal property generally, and subject to the same incidents and liabilities, then the provision does not add anything-to the security, and is nugatory. Assuming, as we/ have done, that by the rule of the common law the movable property! ■of a railroad company is like the personal property of any other per son, and that any piece of it may, by levy and sale, be separated iron the other property of the company, we can conceive of no other purpose of a provision that movable property shall “be deemed a par! of the road” but to change that rule, and to make the road, with itsj rolling stock and personal property proper and necessary for itsj operation, one property, like the different parts constituting onel machine, and inseverable, so far as the rights of mortgagees are con-J cerned. Giving this meaning to the provision, it adds to the mortgagees’ security. Giving it any other, it does not. It needs no argu-/ ment to show that the mortgagees’ security would be, so far as the movable property is concerned, precarious, if each item of it is liable to be levied on, sold, and separated from the road to which it appertains. To prevent this was the purpose of the clause making the property part of the road.

The diversity in decisions we have referred to turned on the proposition that the personal prooerty is, or that it is not, part of the road; those courts which hold it to be part of the road, either as part of the realty, or as fixtures or appendages, all agreeing that it cannot be separately levied on, and only those holding it not part of the road deciding that it may be.

As it is not to be supposed that the legislature intended, in passing the act referred to, to deny adequate remedies to unsecured creditors of railroad companies, whose property is under mortgage, we would hesitate to arrive at the above construction of it, even though apparently required by its terms, if we did not see that with that construction the remedies of such creditors, though affected, are not really impaired. They can still levy their execution on any real estate not part of the road, or upon any personal property not rolling stock, nor [195]*195“properly belonging to the road and appertaining thereto,” that is, property not properly and necessarily used in operating, the road. Their remedy against the road, and what properly appertains to it, must, as to the mortgagees, be against it as an entirety, and not against the several parts of it. If their executions are returned unsatisfied, a very sharp remedy is afforded by 1878 G. S. ch. 76, and other adequate remedies are readily suggested.

That these mortgagees may maintain a suit for an injunction to prevent acts tending to disperse the property, there can be no doubt. They have no adequate remedy in an action at law. As they are not entitled to the immediate possession of the property, but only to have it kept together, they cannot maintain replevin.

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Bluebook (online)
29 L.R.A. 212, 57 N.W. 471, 56 Minn. 188, 1894 Minn. LEXIS 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-trust-co-v-moran-minn-1894.