Commonwealth v. Susq. & Del. River R.

Citations

• 122 Pa. 306
• 15 A. 448
• 1888 Pa. LEXIS 608

Syllabus

<p>1. The trustee in a mortgage of the franchises and property of a corporation, executed to secure its bonds and the interest thereon, becomes a repository of the title to the corporate franchises and property in trust for all the bondholders secured thereby alike.</p> <p>2. Upon a default made, the duties of the trustee become active, and, if he neglect or refuse to move, any bondholder may proceed by bill, in behalf of himself and of others of his class, to compel a sale of the franchises and property for the common benefit of all.</p> <p>8. The bonded indebtedness secured by the mortgage is a unit, so far as the duties and powers of the trustee are concerned, and the remedies to enforce payment of the bonds or accrued interest are confined to those provided in the mortgage and afforded by a court of equity upon the bill of the bondholder.</p> <p>4. A judicial sale, under the act of April 7, 1870, P. L. 58, of the franchises and property of a corporation, made upon a fieri facias from the judgment of an individual bondholder for arrears of interest upon bonds secured by the trust mortgage, will pass no title to the franchises and property covered by the mortgage: Pierce v. Potter, 7 W. 475, distinguished.</p> <p>5. Wherefore, purchasers at such sale, claiming to have organized a new corporation and to enjoy the franchises and rights of the defendant in the writ, cannot set up title thereto as acquired at such sale, and in proceedings by quo warranto judgment of ouster will be entered in favor of the commonwealth.</p>