real ahd:personal estate withhi the state of Louisiana owned by the !laid company at the date of this mortgage. or which may be acquired by It thereafter, appurtenant to, or necessary for ,the operation of, said main line of said railroad, said branchesC9nnllcted with the said main line, or to 'be c()nneJted there}Vlth: also, ,all other property, real and personal, of every kind and description whatsoever, and wheresoever situated, in the stateof Louisiana,wblchiisnow owned, OJ' whIch shall hereafter be acquired, by the said company, and' iVhich shall be ,appurtenant tO,or necessary or used for the operation of,SllidmlJ,in line l;lf rai'lroad, or any part of said branches; also, the tenements, bereditanH1nts, thereunto belonging, and all of the estate, right, title, and and eqllit.able, of the said companyand Its successors and aSSigns therem, t'Qgether wIth the corporate franchises and privileges of said company at any time granted, or to be granted, by thestllte of Louisiana,relatlve to the construction, operatIon, and use of said railroad Within ,said state!' This description is very; full, and a cUrsory examination of it might Convey the idea that thereby the railroad company intended to mortgage all the property it had; or ever'should acquirej but a careful examination will showvery'pIBinly,thati,s.lthoughDlany words are used, really noth:ing was intended to be' mortgaged but'the railroad and its appurtenances then, owned,or -thereafter, to be acquired: "Together with the corporate !ranchisesand privileges of said company at ,any time granted,'or to begrl:\.tlted" by the state of Louisiana, relative to the -construction, opei'ation,and.use,ofsaid,railroad within said state!' I am satisfied thatiL land grant for the purpose of aiding in the constructionof fl railroad MI1n'6t be considered an appurtenant of said railroad, and that the langUage of thernortgage in question; carefully conisidered, wasn6t intended· to cover the after-acquired land grant. As the 'general law of 'dot authorize a mortgage of an after-acquired land grant, asthespeciaJ authority to mortgage granted to the New Orleans, Baton Rbuge & Vicksburg Railroad Company did not contemplate or aUthorize the mortgage of such after-acquired grant, and as "the language of the mortgage itself does not describe nor include any such :aftt;lt·acquired grant; it is clear to me that the mortgage in question in -this case does not and be made to affect, by way of lien or other-mse, the thereafter land grant of 1871.' It 'follows that the "complainant' should have a decree granting the relief prayed for in the
& R; G;R. Co.
tI.UNlTED STATES TaUST
(Circuit Court. B.D; New York,; 1IIaroh7,18\lO.)
DENVER & R.
fl. UNITED STATES TRUST
leted. ready for operation. In a the trustee to counterslgn and iver tha.t the mortgage did not authorize to to E the bonds, ne1iL, continuous suit to compel miles each,the trusteethe refusede· issue them except for sections of 10 but that company was entitled to them for every 10 miles of new construction completed and ready for operation, whether in branches, each shorter than 10 mile.. or in the excess over 10-mile sections.
Charles¥;. DaPosta, for complainant. Edward W. Sh6ltJqn, for defendant.
WALLACE, 1.. This is a suit to compel the defendant to countersign .and deliver certain mortgage bonds to the complainant. The defendant insists that it not authorized, under the temls of its trust, to counter. sign and' qeliver bonds to be used for the purpose of constructing branches or extensions, \1nless the branches and extensions are more than 10 in length., and then only for the part included in the 10-mile sections. The mortgage deed, executed to the defendant as trustee, is conditiolled to the pay]llent of an issue of $42,000,000 of bonds created by thecomplaiDlmti, and contains a covenant on the part of the complainant that it, the proceeds of bonds for no purposes other than those. specifjed in the deed. The deed recites the purposes for .which aUbutS6,l43,000 of the bonds are to be used, and as to thos., provides as follows: rElmatnder shall be retained in the treasury of-the party of the first part rtbe c:wwplainantl for f,iture capital requiremerits, and shall not be issued by it' unles.s' wit6 the .assent of a majority in amount of the preferred stock t.hen outstanding; and, in the event that any part of the bonds reserved as af()resaidthall be used tor the purpose of const.ructing branches or axtel. sions, the same shall only be countersigned and deli vered by the trustee at a rate not excl\elilng $20.000 per mile of new construction. and upon the certi!'icate of the engineer [of the complainant] that sections of not less than ten "miles been completed. ready for operation." Defendant. QOntends that this clause justifies its refusal, as a trustee, to countersign and deliver the bonds. The clause is certainly capable of the meaning that bonds reserved for capital requirements, if used to pay for new construction, shall only be countersigned by the trustee for 1.0-mUe sections of completed lines. If this is its Ipeaning, the complainant can only use bonds enough, if it builds a new line 29 miles long, to pay for 20 miles, cannot use any of the bonds to pay for the construction of lines shorter than 10 miles, and if it builds several lines, each of which consists of more than a lO-mile section, cannot use the bonds to pay for the excess, even thoul/:h the aggregate of excess is J;llore than 10 miles of new line. There does not seem to be any conceivable reason for tllushampering the complainant in the use of the bonds. The deed mortgages railroad lines which, from their contiguity to mines, may, as new Illines are opel,led, require extensions or branches to con.nect them with the new sources of traffic. At the time the deed was ex.WElrenUmerOU8 branch lines of this description, of which 16 ecuted Ipng. The deed mortglj.ged these branches. It were less also mortgages all the new lines thereafter to be acquired the comv.41F.no.13-46
plllJnant, veyances thereof; ,to the trustee.
tinie to ,ifuejthtria,ke' conIt is obvious that the parties to the
would be longer or shorter, depending upon the particular circumstances of each case. It can hardly ;that it was in the minds of the parties that· b'e any' 'to the donstruction of branches or 'long.of however short they ,not ;use 'resery,ed 'capital"fotbutldmg ,such' It 'c1tu only be, mferred ::Of the there rio" eX;- · tn ,tl1e, . that the complamantshal1'not use the bonds ''for, construction' 01 hranciles'(jlless thari lO'rniles, rong, or fornevv where the new lines 9verrun lO-mile seCtiqps, but inquijtibndoes not prevent the',c:omplliinantfrdni'usin'g 'the boridsJo 'pat' tdt' dItbeir' length,whichUmay see: fit' to
dOnnect of »llnnllnl,andsUbsequt!tItly ,thecomplamant llhoqld 'conclude to' purlatte;r (loutd, tfse'tne bond$ fOf that l .antw'6u1d: ba-ire to courlt'etslgn them.' . bTause ; restrict the complainant in, 'bonds sucH orancqes, thElir ' And' itlvopl4 ,it as ,intended, to prohibit the:use of the bonds for branches, ,!while pennitting it for.lju,'ying them. ' ! . ,,r ". ,'TIre, object of tb;e toproteet :the 'eteation of mortgage: it;idebtedness 'for, newtb,nstrnctioli' not.: seeu,red by actually completed new lines, M«agai:rlsC the' tnat bonds ,might! issued ostensibly to, :new 'lihd'beused for whi(lhthe bondholders It is tillable the'trustee to 'ki'iow that thebimd's to be lSl'!ued 'represent' colli plated i for operation. and not merely :projected 'new constructiot1.: If it bad been designed to prohibit fiol'li tis'ingthebtindsi-eser\red requirements' for the building 'of branches Shbtiter than 10 milelllong, or for the' exoess' of construction .beyond hli.ve :been e8:sily expressed, .8Jnd probably would have been expressed in unequiv()ealterms. It is 'IDorereast)nabletoR'Ssume that tM' provision was inserted' in the deed inb1'l1er to' the trustee the inaon,;eniertce'of having to 'countersign and:: deliver bonds less thanfor:$200,OOO'at a, time, ,and theoomplainantfromusing'the'bonds except to pay 'fo\' 10-mile sootiohs." " The meaning of the cla;u'Se:'il!I sllffidientlyambigu.Otis tojustify ithe (lohclud 'of the defendaat, in ttlElfabse'ntie'of' a judicial : dause, in refusing: m 'the' bonds, "but its A decree iB' otdered with" .'." out'coatBi ' , "
MAVEn t1; DENViBD, T. &;
n. w. K. co.
&.FT. W. B. Co. et al.
<9i'l'CUit Court, S. D. NeUJ Yor1c. March .l8, 18110.)
In a suit by the stockholders'of a railroad company to prevent a trullt ny, to whom a mortgage on the roa'tl' has been given, from delivering lIome'of the bonds secured by the mortgage, to have such bonds canceled, the trust compa. ny is a party to the controversy·
.. REMOVAL Oll'C.AUSEs-REMAND.
. A defendant who has had a suit' removed from a state conrt on the ground that the,plaintifl'sarecitizens of a state ditlerent from all the defendants but lime, and that such defendant is only a nominal party, cannot resist amotion to remand on the. ground that the removing defendant is the real party plaintifl'l the ,controversy being, between him and the otherdefendanta, who are oitizena 01
In Equity. On motion to remand. for plaintiffs·. Wage.r $wa'!fll61 for defendants. W .J This isa ,to remanl1 this suit the state conn in which ,it originally and from which .it was the petition of the Denver, Texas & Fort Worth Railroad Company, one of the The. petition for removal that th,e pla,intiffs are residents' ofthe state of New. Yorlti that the Denver, Texas &: Fort Worth Railroad Company is a corporation of the state of defendant the Colorado & Texas QompaColoraqoj ny is a and that the Mercantile Trust Company 18.90 corporation pfthe state of New York, "but is a pominal any interest in. the controversy/' The there is a controversy in the suit which is petitiQndoes ,not state whollybetYrClen citizens of different states, and which can be fully deterthem. The question which has been.argued is erthe which is between citizens of different .states, aap w1;J.icb <;:a11 be fully determined without the presence the, Mercll:ntile Trust Company. Succinctly stated, the controversy is, iO/.lubstance, this: Tile rp.ilroad coIllpany shown by of bondll, Ilecured by a mortgage, to the trust com; has created an panyasatJ'pstee for the bondholders, and the in the pands oftPenustcpmpany, and ,the trust company, ;assuming to by, a.provision in the mortgage, is about. to tBe construction company. ,The provision ferred to is that these 1,000 bonds are to be issued by the trullt company "to be used upon the road-bed of Denver &Rio Grande Railroad Company," a railway line which is included in the mortgage. The plaintiffs are stockholders of the milway company, but the majority of the stockholders are also stockholders of the construction company, and control the railway company in the interest of the construction company. Under this control the railway company has made a corrupt bargain with the construction company, by which the latter is to be paid a large sum