Central Trust Co. v. Kneeland
138 U.S. 414 (1891)

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U.S. Supreme Court

Central Trust Co. v. Kneeland, 138 U.S. 414 (1891)

Central Trust Company v. Kneeland

No. 137

Argued January 7, 1891

Decided March 2, 1891

138 U.S. 414

Syllabus

When a railroad company is incorporated to construct a railroad between two cities named as its termini, a mortgage given by it which, as expressed, is upon its line of railroad constructed or to be constructed between the named termini, together with all the stations, depot grounds, engine houses, machine shops, buildings, erections in any way now or hereafter appertaining unto said described line of railroad, creates a lien upon its terminal facilities in those cities, and is not limited to so much of the road as is found between the city limits of those places.

When a railroad mortgage contains the "after-acquired property" clause, the mortgage is made thereby to cover not only property then owned by

Page 138 U. S. 415

the company and described in it, but also property coming within the words of description and subsequently acquired, whether by a legal title or by a full equitable title, and there are no equities here to set aside that rule.

The case, as stated by the Court, was as follows:

On the 17th of January, 1880, the Toledo, Delphos and Burlington Railroad Company, a corporation organized by the consolidation of several constituent companies, executed a mortgage to the Central Trust Company of New York by which it conveyed the following property:

"All and singular the line of railroad of the said party of the first part, as the same now is or may hereafter be constructed between Toledo, Lucas County, Ohio, through the Counties of Lucas, Wood, Henry, Putnam, Allen and Van Wert, in the State of Ohio and the Counties of Adams, Wells, Huntington, Wabash, Miami, Grant and Howard, in the State of Indiana, and not including the branch line from Delphos, Allen County, Ohio; thence via Spencerville, Mendon and Mercer, and through the counties of Allen Van Wert and Mercer, to Shanesville, Mercer County, Ohio, being about one hundred and eighty miles in length, together with all and singular the rights of way, roadbed made or to be made, its track, laid or to be laid, between the terminal points aforesaid, together with all the stations, depot grounds, rails, fences, bridges, sidings, engine houses, machine shops, buildings, erections in any way now or hereafter appertaining unto said described line of railroad, together with all the engines, cars, machinery, supplies, tools and fixtures now and at any time hereafter held, owned or acquired by the said party of the first part for use in connection with its line of railroad aforesaid, and all its depot grounds, yards, sidings, turnouts, sheds, machine shops, leasehold rights and other terminal facilities now or hereafter owned by the said party of the first part, together with all and singular the powers and franchises thereto belonging, and the tolls, income and revenue to be levied and derived therefrom,"

and also provided:

"The said party of the first part expressly covenants and agrees that it will, on demand, from

Page 138 U. S. 416

time to time hereafter, execute, acknowledge and deliver unto said party of the second part any and all such further and other conveyances and assignments as may be necessary and proper to fully convey to and vest in the party of the second part, or the trustee for the time being, all such future acquired depots, grounds, estates, equipments and property as it may hereafter from time to time purchase for use in and upon its said line of railroad and intended to be hereby conveyed."

On June 21, 1880, the same railroad company executed to the same trustee another mortgage, known as the "terminal trust mortgage." The property thereby conveyed is thus described:

"All and singular the line of railroad of the said party of the first part as the same now is or may hereafter be constructed between the southeasterly end of Washington Street, in the City of Toledo, Lucas County, Ohio; thence northwesterly along Washington Street to the aforesaid canal lands in said city; thence southwesterly along said abandoned canal lands to Swan Creek in said city; thence over said Swan Creek and the Miami and Erie Canal and over and along Mill Street and Canal Avenue, in said city, to the westerly limit thereof, and thence to the point where said railroad crosses the westerly limit of said City of Toledo, together with all and singular the franchises, rights of way, station grounds, shop grounds, side track grounds, and grounds of any and every kind, for whatever purpose bought, between the points aforesaid, viz., the southeasterly end of Washington Street, in the City of Toledo, Ohio, and the westerly limits of said city, and together with the roadbed made or to be made, and tracks and side tracks laid and to be laid thereon, together with all stations, workhouses, engine houses, shops, turntables, water tanks, buildings, erections of every description and all facilities of any and every description appertaining to said roadbed, station grounds, shop grounds and lands of every kind and for every purpose lying between the points aforesaid owned or acquired by the said party of the first part for the use in connection with the part of its line of railroad aforesaid, and all its said depot grounds, yards, sidings, turnouts, sheds, machine shops, leasehold rights and other terminal facilities now and

Page 138 U. S. 417

hereinafter owned by the said party of the first part in connection with the said part of its railroad, together with all and singular the powers and franchises thereto belonging, and the tolls, income and revenue to be levied or derived therefrom."

On foreclosure proceedings duly had of the first mortgage, appellee became, in the interest of the bondholders, the purchaser. After confirmation of sale and passage of title, and during the pendency of a suit to foreclose the second mortgage referred to, this proceeding was commenced by the trustee in the latter mortgage and certain holders of bonds secured thereby, against Kneeland, the purchaser. The bill was practically one to quiet the title of those security holders to the terminals in Toledo. To this bill Kneeland filed an answer and cross-bill. In the latter, he set up his title under the first mortgage and the sale, and prayed to have his title quieted to these terminals. Upon proofs and hearing, the Circuit Court rendered a decree in favor of Kneeland quieting his title to all except a small strip of the right of way, thereby adjudging priority of lien to the first mortgage. This decree the appellants brought to this Court for review.

Page 138 U. S. 419

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