Hoyle v. Plattsburgh & Montreal Railroad

Ingraham, J. Two questions are submitted to us on this appeal. One is whether the rolling stock of a rail [61] road is to be considered as fixtures passing under- a mortgage on the road and franchises ; the other, whether if it is personal property merely, and not to be regarded as fixtures, a general mortgage of the company on the whole road, its equipments and franchises, must necessarily be filed as a chattel mortgage to give it validity against a judgment creditor.. The first question is one for which authority may be found on both sides, and even in this state we find contradictory decisions on this question. In The Farmers’ Loan and Trust Co. v. Hendrickson, (25 Barb. 484,) it was held that the rolling stock are to be deemed fixtures, and will pass under a mortgage on the road, as such. This was decided by the general term in the second district. In Stevens v. Buffalo and New York City R. R. Co. (31 Barb. 590,) the same question was before the general term of the eighth district, in which they held that the rolling stock of a railroad, as between mortgagee and judgment creditors or purchasers,- was personal estate, did not pass under a mortgage as fixtures, and could not be held under the mortgage as personal estate, unless the same was filed as a chattel mortgage, pursuant to the statute. This case was followed at a special term in the fifth district, before Allen, justice, who concurred with the judges in the eighth district. These contradictory decisions of general terms in this court leave the question still unsettled, so far as any adjudications here can be relied on. In the Minnesota Co. v. St. Paul Co. (2 Wallace’s U. S. Rep. 609,) the question was discussed, and was referred to by Justice Helson in a dissenting opinion upon another point. He says: “We agree that the rolling stock upon this road, was covered by the several mortgages, and as respects any other valid liens upon the same, is inseparably connected with the road; in other words is, in technical language, a fixture to the road, so far as in its nature and use it can be [62] called a fixture; and is a fixture extending over the entire track of the road.” In an ahle note annexed to that case, the subject is fully discussed, and the conclusion arrived at, that rolling stock •was a fixture, and passed under a conveyance of the road. (P. 646.) Similar decisions have been made in Pierce v. Emery, (32 New Hamp. Rep. 484,) and other cases there cited. I refer to the various citations in the cases above noted, and to Redfield on Railways, p. 576, for other cases. It is difficult at the present day to define with with any precision what is necessary to make personal property, fixtures. The old rule which required annexation to the freehold, has been so often departed from as to furnish no rule at the present day. For the purposes of trade and as between landlord and tenant, that rule has been so modified as to authorize the removal of many articles which otherwise, by being so affixed, would have been included under the definition of fixtures. ETor is the rule that any thing is a fixture which cannot be removed without injury to the freehold sufficiently extensive to give any correct definition of the articles coming within it. The various cases of doves, rabbits, fish, blinds, keys, fences, hop-poles, deer, millstones, removed from their place by the owner, and others, are all exceptions to such a rule. The more sensible rule seems to be one which of late years has been suggested by judges, viz: If the articles are essential to the use of the realty, have been applied exclusively to use in connection with it, ,are necessary for that purpose and without such, or similar articles, the realty would cease to be of value, then they may properly be considered as fixtures, and should pass with it. I know that even this rule has been departed from in matters relating to trade, such for instance as the case of looms in a factory. (Murdock v. Gifford, 18 N. Y. Rep. 28.) [63] But that case was decided upon the provisions of the statute, (2 R. S. 83, §§ 6, 7,) which provided that things annexed to the freehold for the purpose of trade or manufacture, and not fixed into the wall of the house, &c. should be deemed assets. I am not prepared to say that I accede to the opinion delivered at the special term in this case that the rolling stock in all cases is to be considered as personal property, -and does not pass under a mortgage of the road and its appurtenaces. But it seems to me that there is another principle to be applied to this case which will render it not very material whether in a case where the conveyance is only of the realty, the rolling stock could be included. It is found by the referee, and conceded, that the mortgage is sufficient to include in the mortgaged property the rolling stock; and it must also be conceded that such was the intent of the parties. Nor do I think there can be any doubt that the parties intended that the rolling stock and equipments of the road should pass as a part of the road and as necessary to its use. The object of the mortgage was to provide funds for: the building of the road and preparing it for travel, and the intent of the parties was to secure the bondholders with the mortgage on the whole property in the road as used by them for travel. For this purpose the rolling stock was as necessary as the rails. Either could be supplied with more money, and without either the road could not be made available; and the fair inference is that the parties in giving this mortgage intended to include all, under its provisions. Where such was the intent of the parties, the court should give effect to it. If they had expressly declared that the rolling stock should be considered as fixtures attached to the road.and to pass with the grant of the road, such an agreement would be valid, and the court would treat it accordingly. Such an intent may, I think, be fairly inferred from the terms of this mortgage. [64] [New York General Term, January 6, 1868. Geo. G. Barnard, Ingraham and Sutherland, Justices.] In Murdock v. Gifford, (18 N. Y. Rep. 28,) Johnson, Ch. J. says: “Between the parties, and between grantor and grantee, the effort of a court is always to ascertain the intent of the parties and to give it effect. If their language affords evidence that a chattel is intended to pass, it will pass, of course, whether it be a mere chattel or one which by annexation has become part of the realty. In this case there seems sufficient to warrant the conclusion that the parties intended to include the equipments of the road as part of the realty, and that such a construction should be given to‘it by the courts. (See also, Coe, trustee, v. Pennock et al. 6 Law Reg. 27.) The second question is as to the necessity of filing the mortgage as a chattel mortgage, if it should be held that the rolling stock did not pass with the road. The authority granted by the 28th section of the general railroad act, (Laws of 1850, p. 211,) authorizes railroad corporations to borrow money for the building of their roads or operating them, and to mortgage all their corporate property and franchise to secure the payment thereof, I think this section contemplates a mortgage of all the property, whether land, road, rolling stock or franchise, and warrants the conclusion that it was the intent of the legislature that the whole should be included in one mortgage and treated as a mortgage of the road and its accessories. Such a mortgage need not be treated as a chattel mortgage, and filed, to give it validity. Geo. G. Barnard, P. J. concurred.