Wilson v. Boyce, 92 U.S. 320 (1875)

U.S. Supreme Court

Wilson v. Boyce, 92 U.S. 320 (1875) Wilson v. Boyce

92 U.S. 320

ERROR TO THE CIRCUIT COURT OF THE UNITED

STATES FOR THE EASTERN DISTRICT OF MISSOURI

Syllabus

1. Where the Cairo & Fulton Railroad Company accepted certain bonds issued under an act of the General Assembly of the state of Missouri, which declared that they should " constitute a first lien and mortgage upon the road and property" of the company, held that the word "property" included all the lands of the said company, and that a valid lien on them was created by the act.

2. The title of a subsequent purchaser from the company of its lands is destroyed by the sale of them under the mortgage.

This was an action of ejectment. The controversy turned upon the effect of an act of the General Assembly of the State of Missouri, under which bonds were issued to and accepted by the Cairo & Fulton Railroad Company. The act declared that the bonds should constitute a first lien and mortgage upon the road and property to that company.

Subsequently to the receipt of the bonds, the company executed a deed of trust upon her lands which had been granted by Congress to aid in the construction of the road. The plaintiff claimed under this deed.

The company failed to pay the interest on the bonds, and its lands were sold by the state, pursuant to the power contained in the act. The defendant became the purchaser of the demanded premises.

The court below held that the purchaser under the foreclosure

Page 92 U. S. 321

of the statutory mortgage held the better title, and that the word "property" embraced the lands owned by the company.

Page 92 U. S. 323

MR. JUSTICE HUNT delivered the opinion of the Court.

This is an action of ejectment brought by Blakeley Wilson, a citizen of the State of New Jersey, against Peter Boyce to recover the possession of lands situated in the County of Scott and State of Missouri, being a part of eleven thousand eight hundred and ninety-six acres and sixteen-hundredths of an acre purchased by Wilson on the 23d of November, 1860.

The Cairo & Fulton Railroad Company is by stipulation admitted to be the common source of title.

The title of Boyce, the defendant, is founded upon two several acts of the Legislature of the State of Missouri, the first of the date of Dec. 11, 1855, the second of the date of March 3, 1857. By the first act, the bonds of the state to the amount of $250,000 were issued to the Cairo & Fulton Railroad Company of Missouri, which bonds, it was enacted, should become and be "a mortgage of the road, and every part and section

Page 92 U. S. 324

thereof, and its appurtenances," for securing the payment of the said bonds.

By the second act, the bonds of the state to the amount of $400,000 were authorized to be issued to the same company, and also bonds to other companies; which bonds, it was enacted,

"shall constitute a first lien and mortgage upon the road and property of the several companies so receiving them, in the same manner as provided by the Act of Feb. 22, 1851, to expedite the construction of the Pacific Railroad and of the Hannibal & St. Joseph Railroad, and the Act approved Dec. 10, 1855, of which this is amendatory."

The provisions of the Acts of Feb. 22, 1851, and Dec. 10, 1855, in this paragraph mentioned, have no significance in the present case.

The Cairo & Fulton Railroad Company failing to pay the interest due to the state upon these bonds, a sale was made of the lands in question, under the powers contained in the two statutes; and they were bought in by the state according to the terms of the statutes. Conveyances were afterwards made by the state to purchasers from them, under whom and whose grantees the defendant, Boyce, holds possession.

The plaintiff's title arises in this manner: the lands, in pursuance of authority given by the statute of Missouri, were conveyed by the Cairo & Fulton Railroad Company to trustees, to be sold to raise money for the construction of their road. This conveyance was of the date of the 23d of May, 1857. On the 25th of November, 1859, the trustees conveyed the land in question to Hiram S. Hamilton, from whom Wilson, the plaintiff, derives title. The question is which of these is the better title?

All of the state bonds had been issued to the railroad company, and the terms of the acts above referred to had been formally accepted by the company, before it authorized the execution of the trust deed of May 23, 1857; and the trust deed refers to the Acts of Dec. 11, 1855, and March 3, 1857, above mentioned.

The mortgage lien secured to the state by the Act of 1855, when the first series of bonds was issued by the state, was expressed to be upon "the road, every part and section thereof, and its appurtenances." The lands in question do not constitute

Page 92 U. S. 325

the road, or any part thereof. The track of the road is not laid upon them, nor are they used in connection with the road. The terms of the second mortgage are broader, and if the defendant's construction of its terms are correct, it is not necessary to decide whether the lands in question would pass under the expression "appurtenances."

The second mortgage to the state, made when $400,000 of bonds were issued to the company, covers "the road and property of the several companies so receiving them." These lands were the property of the company, held by it when this statutory mortgage took effect. The question is does the word "property" in the statute create a valid lien on these lands?

1. The generality of its language forms no objection to the validity of the mortgage. A deed "of all my estate" is sufficient. So a deed "of all my lands wherever situated" is good to pass title. Johnson v. De Lancy, 4 Cow. 427; Pond v. Berg, 10 Paige 140; 1 Atk. on Conv. 2. A mortgage "of all my property," like the one we are considering, is sufficient to transfer title.

2. It was quite within the competency of the railroad company to mortgage its lands not used for its track or appurtenances. It might be deemed prudent and judicious to raise money upon its collateral property rather than upon its road. It might lose its foreign lands, and still be successful as a railroad company. If it should lose its track, it must at once cease to exist.

3. In the first mortgage, the state took its security upon the road and its appurtenances. In its second mortgage, it authorized and obtained security not only upon the road of the company and every part thereof, but also upon its property, meaning its other property, and all of its other property. It is difficult to conceive any reason for this extension of language in the statute except an intended extension of security. Time had passed without a completion of the road. A large additional loan was now made, and a desire to receive additional security gives a natural and logical explanation of the additional words inserted in the mortgage.

Such was the construction given to this language by the Supreme Court of the State of Missouri, in Whitehead v.

Page 92 U. S. 326

Vinyard, 50 Mo. 30. The court there held that these words were intended to cover all the corporate property of the railroad company, including lands situated like those in controversy. It is said, however, that the language of the court referred to was obiter merely, and that the point before us did not actually arise in that case. This is an error. The action in that case was ejectment for land purchased by Thomas Allen in a foreclosure proceeding of a statutory mortgage upon the lands of the Iron Mountain Railroad Company under the statute of 1857, now before us. If the word "property" did not cover the outside lands of the company, the plaintiff could not recover. But he did recover, the court saying that the intention of the legislature to include them was unequivocal; that there was not the shadow of a doubt upon the question. The point we are considering was the precise point before the court.

The title of the plaintiff was and is good so far as the railroad company is concerned. That company held the title in fee, subject only to the statutory mortgage. He took title subject to that mortgage, which was a lien of a date prior to his title. That prior mortgage became forfeited by the nonpayment by the company of the moneys due; the lands therein described were sold by reason of such forfeiture, and were purchased by the grantor of the defendant's landlord. The foreclosure of the prior statutory mortgage has destroyed the plaintiff's title. This is the only point that need be considered in the case.

The plaintiff, his grantors, and all who had any interest in knowing the fact, had ready means of learning that the lands they purchased were subject to the statutory mortgage. The deed of trust under which they claim referred to the statutes which created it, and in law they bought with knowledge of it.

Judgment affirmed.

NOTE -- In the case of Wilson v. McCrellis, which depended upon the same principles as that of Wilson v. Boyce, supra, MR. JUSTICE HUNT delivered the opinion of the Court affirming the judgment of the circuit court.