In re Ferguson Contracting Co.

183 F. 880, 1910 U.S. Dist. LEXIS 128

• Court: District Court, S.D. New York
• Decided: December 27, 1910
• Status: Published

Opinion

HAND, District Judge

(after stating the facts as above). The act upon which the receiver relies, which is now section 61 of the personal property law, first appeared in 1883 in substantially the same form as now, in chapter 383, Haws of 1883. Its history does not in itself, therefore, help in its interpretation, though it is unusual, not only because it invalidates a conditional sale as against judgment creditors, unlike the general law of the state of New York, which protects only bona fide purchasers, but also because the instrument is to be recorded as a real estate mortgage. It had originally, been held by the Supreme Court of New York that mortgages of a railroad covering rolling stock need not be filed as chattel mortgages; but this was overruled by the Commission of Appeals in Hoyle v. Plattsburgh & Montreal R. R. Co., 54 N. Y. 314, 13 Am. Rep. 595. That was in 1873, and meanwhile, by chapter 779 of the Laws of 1868, the recording act had itself been changed to provide that it should he enough io record a mortgage of a railroad and its rolling stock once as a real estate mortgage, without filing it also as a chattel mortgage. Moreover, prior to 1883 the question had arisen between the conditional vendors of railroad rolling stock and bondholders under a mortgage with after-acquired property clauses. The conditional vendors had succeeded against the bondholders, who were held to be in no better position than general creditors. Fosdick v. Schall, 99 U. S. 235, 25 L. Ed. 339 (1878).

These two considerations seem to have been adequate ground for the enactment of this statute: First, because railway mortgages of rolling stock were already recorded as real estate mortgages; second, because bondholders with after-acquired property clauses could not protect themselves against secret vendors’ liens upon new rolling stock necessarily substituted when the old stock wore out. While, of course, no one can say certainly that this was in fact what the statute meant, still it would! seem as if there must have been some such reason for ¡Hitting “railroad equipment and rolling stock” in a different position from other chattels conditionally sold. Now, if this be the explanation, the statute did not intend to cover chattels which were used upon a mere temporary road of rails, having none of the characteristics in law of a common carrier, because none of the considerations mentioned had arisen in regard to such “equipment and rolling stock.”

However, it is not necessary to this construction that the supposition mentioned be correct. Even if literally construed, the words ought not to include such chattels as these. Not every pair of rails laid on ties is a railroad. Gibbs v. Drew, 16 Fla. 147, 26 Am. Rep. 700. It would be extreme to construe the words in that way. “Railroad equipment and rolling stock” is equivalent to rolling stock used on a railroad. It is absurd to speak of these contractors’ locomotives, incapable of any use whatsoever upon the usual railroad, as “rolling stock” of a “railroad.” It would be as unreasonable to call a “roadbed” the temporary rails and ties of a contractor, which is put down to-day and taken up next week. The phrase “equipment and rolling stock” by implication infers a distinction between that and some'permanent roadbed or way, which is capable of separate transfer, and is recognized as the more substantial part of the railroad. No such distinction is possible in the case at bar.

In common speech a railroad is a common carrier, an association of men who engage in the business of hauling passengers and freight. Thus the logging road used by a logging company is not a railroad. Ellington v. Beaver Dam Lumber Co., 93 Ga. 53, 19 S. E. 21; McKivergan v. Alexander, 124 Wis. 60, 102 N. W. 332. Nor is a road of rails used in the construction of a real railroad. Beeson v. Busenbark, 44 Kan. 669, 25 Pac. 48, 10 L. R. A. 839. Nor a construction train. Griggs v. Houston, 104 U. S. 553, 26 L. Ed. 840.

Thus not only the natural meaning of the words, but the only discernible purpose of the act, both join in suggesting the interpretation of the petitioner, and his prayer is granted.