Boston, Concord & Montreal Railroad v. Gilmore , 37 N.H. 410 ( 1858 )

Bell, J.

We have carefully examined the authorities cited for the plaintiff, and are of opinion that they do not support the ingenious propositions of the counsel for the plaintiff, which we understand to be, that the property owned by railroad corporations, and which is necessary for the discharge of their public duties, is vested in them in trust for the public; that the franchise of the corporation is the principal thing, to which the track, depots, engines, cars, and the like, are mere incidents, and that all these constitute one entire thing, so connected that the cars and engines, &c., cannot be severed from their connexion by an attachment, or seizure on execution, and held as security, or sold and applied as personal property ordinarily may be, to tbe payment of the corporate debts.

Tbe case of Worcester v. Western R. R., 4 Met. 564, though it has some general expressions, such as are quoted in the argument, relative to the property of railroad corporations being vested in them in trust for the public, yet is not an authority for the positions assumed in this case. The question before the court was, whether the property of a railroad, required for the discharge of their duties, was liable to be .taxed in the town in which it is situate; and the decision was that the property so far partook of the character of public property, or property held in trust for a public use, that, like town-houses, school-houses, bridges, and the like, it was not a subject of taxation. The language used may go further, but this is the whole point decided, and it manifestly has no bearing upon the question before the court in this case. The case related to the roadway, depots and other real estate, and not to personal property; and it by no means follows that because town-houses, school-houses, and the like, are so far public that they are not liable to taxation, that they would not be liable to attachment and levy on execution for the debts of the town or district by which they were owned. By our law the estate of towns may clearly be taken on execution, like that of other corporations. Rev. Stat., chap. 198, sec. 1.

The case of Pierce v. Emery, 32 N. H. 503, is not an authority for the positions assumed here. It is there settled that, as the general rule, corporations have power to sell their property, real or personal, and to mortgage it for the security of their debts; but as these railroad corporations are created to answer a public object, and are bound to the State for the performance of a public duty, they can do no act which would amount to a renunciation of their duty to the public, or which would directly and necessarily disable them from performing it. They cannot, therefore, convey away their franchise and corporate rights, nor perhaps the track and right of way, which they take and hold for the necessary use of their road, unless expressly authorized by the legislature. When so authorized, a mortgage of the whole franchise and property of the corporation would be valid, and might even extend to property subsequently acquired. But there was nothing in the nature of their business or in their relations to the public which should prevent them from making a valid mortgage of their personal property, not affixed to the road, though used in operating it. We are unable to see any principle of public policy or convenience which should allow such corporations to mortgage their cars and engines, which would not be equally strong to allow a creditor of the corporation to secure a lien substantially of the same kind by an attachment. In either case the debt must be paid, or the creditor, by suitable proceedings, may cause the property to he applied, by sale or otherwise, to the payment of the debt, and the inconvenience of the public or to the corporation is not materially greater in the one case than in the other. It would seem, then, that so long as the law allows to the corporation the right to deprive themselves by a mortgage, in a greater or less degree, of the power of readily performing their public obligations, and allows them to contract debts, which, in the ease of others, may be secured by attachment, there can be little reason in denying to the creditor of a railroad the ordinary right to secure his debt by attachment; especially when the debtors can readily relieve themselves from the inconvenience by payment or security.

The case of Willink v. Morris Canal Co., 3 Green’s Ch. R. 377, is no authority for the position of the plaintiff. It is there held that a mortgage, made by authority of the legislature of New-Jersey, “ of the Morris Canal, with all its privileges, appendages and appurtenances, and all the property and chartered rights of said canal,” covered the entire canal, though a part of it was constructed after the execution of the mortgage, and upon lands subsequently acquired.

In neither of these cases is there anything to sustain the doctrine that the franchise of the corporation is the principal thing, to which the right of way, track, dépóts, engines, cars, &c., are mere incidents, and from which they cannot be separated; nor the doctrine that these things constitute one entire thing, which must be sold, mortgaged, attached, or levied upon together; nor the doctrine that the cars and engines of a railroad corporation, when necessary for the discharge of its public duties, become in any way so connected with the franchise that they cannot be attached.

The case of the Farmers' Loan and Trust Co. v. Hendrickson, reported in the N. Y. Evening Post of January 27, 1858, is inconsistent with either of these doctrines, because it holds that the cars, engines, &c., of railroad corporations are fixtures of the' real estate; that is, of the roadway and track. The plaintiffs were holders of a mortgage, made by the Flushing Pailroad to them, of their track, buildings, rails, purchased or to be purchased, engines, cars, &c. The defendant, as sheriff, levied an execution against the railroad on some of the engines and cars. The principal question was, if the property was to be considered, as between the mortgagees and execution creditors, as fixtures of the road. Strong, P. J., after a fall discussion, arrives at the conclusion that the cars, engines, &c., are properly to be regarded as fixtures, and so not liable to seizure on execution as against the mortgagees ; and, for the same reason, that the mortgages need not be recorded by the town-clerk, which is made necessary by the statute to the validity of mortgages of personal property. The case goes far beyond any other decision, and it seems to us cannot be sustained. The reasons assigned for this conclusion are not only inconclusive, but incorrect in fact. It is said “ that railway cars are a necessary part of the whole establishment, without which it would be inoperative and valueless. Their wheels are fitted to the rails; they are constantly upon the rails, and, except in cases of accidents, or when taken off for repairs, no where else; they are not moved off’ the land belonging to the company; they are peculiarly adapted to the use of the railway, and in fact cannot be applied to any other purpose ; they are not, like farming utensils, and possibly the machinery in factories, and many of the movable appliances in stores and dwellings, the objects of general trade; they are permanently used on the particular road where they are employed, and are seldom if ever changed to any other.” All these things are at least as true of the carts, plows, &c., used on a farm with reference to the farm, yet no one ever imagined them to be fixtures. And to those who habitually see the same cars and often the same engines rnnning from the line of Canada to Boston, over roads owned by several corporations, the facts assumed appear entirely groundless. No particular cars, nor cars owned by the road, are necessary to operate it, since many roads are operated with the cars of other corporations. The wheels are not fitted to any road in particular, but may be equally useful on any road of similar gauge ; the engine and cars are not kept on the road, or lands of the same company, but are often used on other roads, and they are subjects of trade as much as coaches or steamboats.

The case settles nothing as to the rights of the railroad company and their execution creditor, — the rights of purchasers and others, as to things claimed as fixtures, being materially different.

The idea that property, either real or personal, may become a mere .incident to a franchise, so that the franchise and property shall constitute an entire thing, is not found in any of the books of the common law, so far as we are aware. The right to a ferry is such a franchise, and the boats required for the transportation of passengers and their property, are entirely indispensable for the discharge of the public duties of the owner; yet we have found no instance where it has been claimed that such boats were exempt from seizure in discharge of the owner’s debts.

The statute of 1816, relating to levies on the franchise of taking toll, and the Bevised Statutes on that subject, give no countenance to such an idea; for they provide that by the sale of the franchise the toll-houses and gates shall pass to the purchaser, but the other rights of the corporation shall not be affected.

The property of individuals who owe duties to the public is not for that reason exempted from liability to the ordinary process of law, except so long as it is in actual use in the discharge of that duty. Such is the case of the contractor to carry the mail. It has never been held that the steamboat or coach and horses used in the conveyance of the mail were exempt when not in use. Briggs v. Strange, 17 Mass. 409 ; Potter v. Hall, 3 Pick. 368.

Considering, then, that it is not necessary, for the discharge of the public duties of these corporations, that they-should be the owners of cars or engines — many such roads being operated with the cars of other corporations; that it is a matter of great uncertainty what articles of the personal property of such corporations are necessary for the discharge of their public duties; that no means exist by which it can be determined what is necessary, or otherwise; that it must be very difficult for courts to lay down any definite rule by which officers can be guided, who in such eases must decide at their peril; it seems to be neither judicious nor expedient to establish an exemption of this kind, unless it is done by the direct action of the legislature, who can provide the proper rules and safeguards for the safety of officers as well as of parties.

The court being of opinion that the property here in question was liable to be attached, there must be

Judgment for the defendant