Guaranty Trust Co. of New York v. Atlantic Coast Electric R.

Citations

• 132 F. 68
• 1904 U.S. App. LEXIS 4980

Syllabus

<p>1. Mortgage — Foreclosure—Lien toon After-Acquired Property.'</p> <p>The mortgage given by tbe defendant railroad company recited the form of the bonds secured by it, which declared that the bonds were secured by a mortgage upon “all the certain railroad and other property, real and personal, and franchises of said railroad company, whether now owned or hereafter acquired by it.” The conveyance clauses of the mortgage limited its lien upon after-acquired property to such property, and to such rights acquired by lease from other railroad companies, as should be “connected with or appurtenant to” the railroad of the defendant company specifically described in the mortgage. Held: (1) That the lien of the mortgage embraces rights acquired by leases made after the date of the mortgage to the defendant company by other railroad companies owning railroads connected with the defendant’s railroad, and being operated by the defendant company in connection with its own railroad and as a part of its railway system. (2) That its lien also embraces the capital stock of, and a lease acquired from, a new corporation, such new corporation having been created for the mere purpose..of subserving the interests of the defendant corporation, which has paid for all the property conveyed to the new corporation, and assumed all its obligations, and the new corporation having issued to the defendant company all its capital stock and executed to the defendant company a lease upon all its property for the term of 99 years, the existence of the new corporation being limited by law to 100 years, and the railroad of the new corporation being operated by the defendant company in connection with its own railroad and as a part of its railway system. (3) That its lien also embraces a line of railroad constructed by the defendant company which is operated by the defendant company, in connection with its own railroad and the railroads on which it has secured leases, as a single railway system. (4) T