Philadelphia, Wilmington & Baltimore Railroad v. Woelpper

The opinion of the court was delivered, by Sharswood, J. — By the Act of Assembly of February 12th 1856 (Pamph L. 42) it was provided “ that for the purpose of constructing and equipping the Philadelphia and Baltimore Central Railroad, chartered by the legislatures of Pennsylvania and Maryland, the said company is hereby authorized to borrow money to any amount not exceeding $1,500,000,” * * * “ and [371] to issue their bonds therefor,” * * * “ and to secure the payment of the said bonds and their interest by executing and delivering to such trustee or trustees as they may select, a mortgage or mortgages of all or any part of their road, property, rights, liberties and franchises of the said company in the state of Pennsylvania.” In pursuance of this power the said company, on February 15th 1859, did execute and deliver to Ezra Bowen and George S. Fox, trustees, a mortgage of “ all the road, property, rights, liberties, privileges, corporate franchises, incomes, tolls and receipts, now held or hereafter to be acquired in the state of Pennsylvania.” The first question which arises is, whether this mortgage is effectual to give a valid lien on the locomotive engines, passenger and other cars, furniture of stations, tools and materials for support and repair of the road, levied on by the sheriff of Chester county under a fieri facias issued upon a judgment obtained by the appellants in the Court of Common Pleas. These articles, or by far the greater part of them, [were not in existence or acquired by the mortgagors at the date of the mortgage^ but it is clear, and is reported as a fact by the master in the court below, that they were in actual use upon the railroad, and were required for the transaction of its business, and that the trains could not be run without them, and that although acquired since the execution of the mortgage, they are of the kind of articles which the company had at that time, and are essential to the full exercise of the franchises granted to the company, which were for the benefit of the public as well as for that of the corporators. It is not denied that the words of grant in the mortgage are sufficiently ample to cover all this property. But it is objected that no person, natural or artificial, can grant what he does not possess or own at the time of the grant. Qui non habet, Ule non dot. Yet even at law this rule is not without some qualifications. A man may grant the future accretions or increase of any subject which he owns at the time of the grant, as all the wool which shall grow on his sheep for a term of years. Grantham v. Hawley, Hobart 132, was the case of a covenant by a lessor that a lessee of a term certain might take the corn that should be growing at the end of the term, and upon an issue whether it did of right belong to the lessee it was held to be a good grant. And though the lessor had it not actually in him, nor certain, yet he had it potentially; for the land is the mother and root of all fruits. Therefore he that hath it may grant all fruits that may arise upon it after, and the property shall pass as soon as the fruits are extant: Ass. 21 Henry 6. A parson may grant all the tithe wool that he shall have in such a year: 1 Plowd. 13 a. So, if a man grant vesturam terree, the grantee shall have the corn, grass, underwood, sweepage and [372] the like: 1 Inst. 4 b. It is indubitable that a mortgage of ) land will pass all structures or fixtures that may afterwards be J erected upon it by the mortgagor. But it is not necessary to maintain that the rolling-stock and equipments of a railroad are j part of its accretions and fixtures, so as to make the transfer good 1 at law. It is unquestionably good in equity. Contingent estates and interests, though not assignable at law, are assignable in equity; and they may also be the subject of a contract, which, when made for valuable consideration, will be specifically enforced when the event happens: 2 Story’s Eq. 1040, 6. On the same principle equity originally took cognisance of assignments of choses in action, which were void at law, and when made for value carried them into execution by considering the assignment a declaration of trust by the assignor in favor of the assignee, compelling the assignor to allow his name to be used by the assignee in proceeding at law, and enjoining him from releasing or otherwise interfering with the equitable property vested by the assignment in the assignee: 2 Story 1039, 1040. It is a plain corollaryl from these principles that a court of equity will treat a mortgage of property to be subsequently acquired, whether it be real or personal, as a binding contract, which attaches to the thing when acquired. Equity considers that as actually done which a chan-i cellor would decree to be done. If then, upon every acquisition j of property within the description contained in the mortgage, a| chancellor would decree the mortgagor to execute a mortgage of ! such subject, it will be considered as though it had been done, \ and that of every article of property as acquired there was an j actual mortgage then executed. The authorities cited in the able j report of the master below fully sustain this view, to which may j be added Covey v. Pittsburg, Fort Wayne and Chicago Railroad Co., 3 Phila. Rep. 173, decided by our brother Agnew, when President Judge of the Court of Common Pleas of the 17th | Judicial District. But the principal contention here has been that the mortgage by this corporation, so far as it included subsequent acquisitions, was ultra vires — beyond the power conferred upon them by the legislative grant. The act authorized them to mortgage all their property, a word of very large extent. Property (proprietas) is whatever is a man’s own (proprius). His future acquisitions, though subject to a contingency, are his own, and if, as we have seen, they can be granted or assigned, they are his present property, valuable now to him because they can be enjoyed or used j by anticipation. There is no refinement in this reasoning as f applied to the construction of this statute. The legislature evi-< dently intended it. Every law is to be interpreted according to j its subject-matter. This act relates to a railroad and its usual! necessary appertenances. The words are, “ road, property, rights, [373] liberties and franchises,” including the road and all its adjuncts. The very objects of the loan, and of the mortgage to secure it, as expressed in the act, was “ for the purpose of constructing and equipping the road.” It evidently contemplated a condition of things in the future. The bare road, only then constructed in part, without any rolling-stock or equipments, would have been no security, or a very inadequate one. Had the road even been fully equipped at the date of the mortgage, can it be doubted that the legislature meant that it should comprise everything subsequently acquired to replace old and worn-out materials, and to maintain and keep up the equipment? No money would have been loaned on a security daily deteriorating, and which must eventually perish entirely. As was well said by our brother Agnew, in the case before referred to, “ To build a railroad requires a vast capital beyond ordinary means, and to borrow it to carry into effect the objects of the incorporation demands all the security within the possible power of the corporation to give. By necessity and practice, the money of the creditor capitalist finishes and equips the road; and slender indeed would his security be which extends not beyond worn-out rails and rolling-stock, and equipments first in use, and these indeed not often in being at the time of the execution of the mortgage. In giving the. power to borrow and pledge, it must be supposed the power was given to its fullest extent, in order to carry into effect the object of the incorporation.” This construction does not conflict with Roberts’s and Pyne’s Appeal, 10 P. F. Smith 400. That was under the Act of January 11th 1867 (Pamph. L. 1372), which enabled “ all iron and other manufacturing and mining corporations to borrow moneys and to secure the loans to be made to them by mortgage of their property.” No special purpose is specified, and the subject-matter was not such as to call for or require any other than a strict construction. It was held, therefore, not to include chattel mortgages. “It is true,” says the opinion, “railroad corporations have been allowed to do this, and other corporations in similar circumstances, when personal interests have been of such a permanent or fixed character, or so incapable of removal that no inconvenience would be felt in relaxing the general rule as to movables. But in this act the term property is so wholly unexplained by its content, that it may or may not refer to chattels, and leaves the mind to hesitate and doubt whether the legislature meant more than the property accustomed to be mortgaged under the laws of the state, and for which provision was made for notice by recording, and remedy by scire facias.” These conclusions sustain the decree made in the court below, and dispense with the necessity of considering the other point [374] made as to the right of the sheriff to levy upon the articles contained in the inventory independently of the mortgage. Decree affirmed, and appeal dismissed at the costs of the appellants.