The conductor of a railway train is a special agent of the company, and service may be made upon them through him under the statute of Indiana.3 Under the English practice, where in an action for calls upon subscription to stock the declaration sets out in detail the authority for making such calls, it is competent for the defendant to plead "never indebted," thus putting the plaintiff upon the proof of his entire declaration.4 In an action on the case against a railway company for damage caused to a horse by the neglect to fence their road, by reason whereof the horse escaped and went at large and thereby received such injury, the declaration stated that the defendants neglected to keep a suitable fence along their track, and for want of" such fence the plaintiff's horse escaped from his pasture and went at large, and by means of going at large as aforesaid the horse was greatly injured"; and it was held, that although the declaration might be bad on demurrer, it was sufficient on a motion in arrest of judgment after verdict for the plaintiff. · New Albany Railway v. Grooms, 9 Ind. R. 243. ✦ Welland Railw. v. Blake, 6 H & N. 410. NOTES. NOTE I. TO § 235, ante, pp. 507 et seq. Right of Commonwealth of Massachusetts to take possession of the Troy and Greenfield Railway. 1. Possession of Commonwealth valid. Foreclosure in ten years after the road is finished and in operation will result from the surrender. (1.) This will not affect the interest under the Smith mortgage. That can only be foreclosed in a court of equity. (2.) The term of redemption extended to the company will give the same term to intermediate encumbrancers. 2. The title of Commonwealth unquestionable to the extent of $2,000,000. (1.) Ordinarily, mortgages for future advances only create lien as advances are made. (2.) Here the Commonwealth was bound to make the advances, and the encumbrance was absolute to that extent in the first instance. (3.) The Smith mortgage being made in terms subject to that of the Commonwealth, to the extent of $2,000,000, they can make no objection to that mortgage, or to the right to advance $2,000,000 under it. (4.) And the subsequent mortgages are an effectual confirmation of the title of the Commonwealth on the part of the company. 3. The matter stated more in detail. (1.) The statute giving the power to mortgage the franchise to the Commonwealth, any change of location, and all after-acquired property pass, both as incidents of the main thing and by the terms of the statute. (2.) The rule of law against executing a valid mortgage of future acquisitions has no application where the statute confers such a power. (3.) It has been made a question how far the alteration or repeal of the act of 1854 may have postponed the mortgage of the Commonwealth. (4.) The alterations seem to have been made at the instance of the company and the contractors, and for their relief, and will not therefore prejudice their rights. (5.) But no subsequent mortgagee can insist upon the rights of a strict surety, and that the terms of the first mortgage shall remain. (6.) He is not a surety for the debt secured by the prior mortgage, and cannot complain of any change in the securities, if the amount is not increased.. (7.) The form of the bond and mortgage is valid under general statutes. (8.) It is expressly required, in that form, by the act of 1854. 4. The subsequent mortgages to the Commonwealth convenient, but not indispensable. 5. The questions arising on the Smith mortgage are such that it is impossible to give reliable advice in regard to them all. (1.) It is important to inquire whether the bonds are valid or negotiable instruments. (2.) Statute requires them to be payable in twenty years, and not to exceed capital paid in. (3.) This requirement is of binding obligation upon the company, in issuing these negotiable securities. (4.) Railways may probably, without special authority for the purpose, execute negotiable instruments, such as bills of exchange and promissory notes. (5.) But the thing here provided for is the addition of funded capital, to the amount of the previous stock capital. (6.) A limitation was therefore placed upon this power of making funded capital. 1. Should only be done for funding floating debt, and borrowing money for purposes authorized by law. 2. The funded capital thus created should not exceed stock capital in money. 3. The securities should not extend beyond twenty years, or bear interest over six per cent, or be in sums less than $100. (7.) The powers of the company are thus clearly defined, and contain an implied denial of the power of raising funded capital in any other mode. The bonds are therefore ultra vires, and void, as to the company. (8.) They are of no more force in the hands of bonâ fide purchasers. So held in England. (9.) The defect of authority is apparent upon the face of the instruments, and he who takes the security of a corporation must look to its powers. (10.) The bonds therefore void in the hands of every one. 6. It may be claimed that the mortgage should be upheld as a security for the debt of the contractors, without regard to the bonds. (1.) The general rule is that the mortgage is security for the debt. 2.) Contracts ultra vires are simply void, not illegal. (3.) Courts not expected to extend the rule to this transaction. (4.) Mortgage must probably perish with the bonds. (5.) But if the mortgage should be upheld independently of the bonds, it will be merely for the benefit of the contractors. (6.) English case favoring this construction. (7.) Mortgage then solely under control of contractors. (8.) Requisite in this view to inquire into the power of railway companies to execute valid mortgages, without express legislative sanction. (9.) English rule, and probably true one, that no such power exists. (11.) And without this, a company having the power to take tolls, may create such a lien upon its property as to give a lien upon its tolls in equity, to be enforced through receiver. (12.) This was the general opinion certainly at the date of this mortgage. More recently the tide sets somewhat against it. (13.) At date of this mortgage, was probably some reason to say that the legislation of this State did make the franchise of taking tolls by railway companies alienable for the security or payment of debts. 1. The statute allowing the franchise of any corporation for taking toll to be attached on mesne process, and sold on execution, certainly treats this species of property as alienable for security or payment of debts. 2. But the provisions of the General Statutes as to railway mortgages still more strongly imply the general power to mortgage the franchise of taking tolls. 3. These provisions can only be made reasonable by being treated as limitations upon the general right of such corporations. 4. General course, to leave restrictions upon special acts, to those acts. 5. Probable that the general course of legislation in this State had made the roads, equipments, and franchises of railway companies alienable by these companies for the security of debts. (14.) But if the courts should hold the mortgage operative only upon the personal property, and that part of the road-bed and superstructure owned by the company at the date of the deed: (15.) This would give the second mortgagees the right to redeem the first mortgage, and the Commonwealth might be bound to treat it as a subsisting encumbrance, unless it is void upon the grounds above stated. 7. Brief statement of legal force of other liens. (1.) Attachment of iron, as property of Haupt & Co., not valid. (2.) Grounds of this opinion explained. (3.) But statute of 1862 may include this claim upon the iron. (4.) But only to extent of appropriation, and upon full relinquishment. (5.) Claim of Conn. River Railway for freight of the iron comes within equity of statute of 1862, and probably should be paid to same extent as other claims. But the carrier's lien has probably been waived. (6.) Difficult to say how far provisions of statute of 1863 apply. Probably intended to apply. 8. (1.) The second mortgagees, if their mortgage is valid, may redeem the first mortgage at any time before the foreclosure of their rights. (2.) The consent of the contractors to the surrender of the road to the Commonwealth would postpone any claim on their part, till after the whole sum necessary to be advanced in completing and equipping the road, whether beyond $2,000,000 or less. (3.) Contractors bound by terms of their consent to same extent as company by surrender. Smith mortgage thus postponed to all claims on part of Commonwealth, to full extent of furnishing and equipping the road. 9. Validity of Mr. Bartlett's attachment dependent upon whether the franchise of a railway company for taking tolls is assignable or alienable for the benefit of creditors. 10. Smith mortgage and Bartlett attachment possible clouds upon title of Commonwealth. Desirable to obtain opinion of Supreme Judicial Court in regard to their validity. (1.) Court would not probably regard this case as proper to be referred to them by executive or legislative department of the government. (2.) But specific provisions of constitution on the subject reach this case, unless it is to be excepted on special grounds. (3.) The importance of having these adversary rights determined will recommend the matter to the most favorable consideration of the court. (4.) and (5.) Application to the court in equity recommended. (6.) Subsequent encumbrancers should be notified before expenditures made by the Commonwealth beyond the $2,000,000. (7.) Permanent erections made by mortgagee in possession, not ordinarily valid charge. (8.) Should the Commonwealth go forward and finish the road and put it in operation, and equity allow other parties to redeem, they would probably be required to repay all such expenditures. (9.) But one case of railway mortgage foreclosure in this State. § 260. THE following opinion in regard to the title of the commonwealth to the property and franchises of the Troy and Greenfield Railroad Company, under the surrender thereof made by the corporation to the commonwealth according to the statute of 1862, ch. 156, as against the bondholders under the prior mortgage to Smith and others, having been substantially adopted by the decision of the Supreme Judicial Court of Massachusetts,1 1 Commonwealth v. Smith, 10 Allen, 448. This was a bill in equity, seeking to impeach the validity of a mortgage made July 30, 1855, to the defendants, by VOL. II. 43 |