McLane v. Placerville & Sacramento Valley R.R.

Citations

• 66 Cal. 606
• 6 P. 748
• 1885 Cal. LEXIS 512

Syllabus

<p>Railroad Corporation—Power to Issue Bonds—Mortgage—Construction ot Road.—Section 15 of the act of 1861, as amended by section 1 of the act of May 14,1862, authorizes a railroad corporation, by a majority vote of its board of directors, to issue bonds secured by a mortgage of its property and franchises, in payment of debts contracted, or contracts made, for constructing and completing its road.</p> <p>Id.—Trust Deed—Railroad Mortgage—Rights of Bondholders.—The instrument sued on, although executed to trustees, and in form a conveyance in trust, is a mortgage of the form usual with such securities executed by railroad corporations, and the holders of the bonds secured by it are entitled to the same benefit they would have if actually made parties to the instrument.</p> <p>Id.— Action to Enforce Mortgage—Default in Interest—Receiver— Purchase of Rolling Stock.—The mortgage provided that upon default [j in the payment of interest for one year, the trustees or the survivor of them;; should he entitled to take possession of the property mortgaged, hold it, re- ,, ceive and collect the income and profits arising from it, and apply the same; to certain stated purposes. Held, that upon the happening of that event, a ] court of equity had power, in an action to enforce the specific execution ofi| the mortgage, to appoint the surviving trustee a receiver of the mortgaged!] property, to put him in possession thereof pendente lite, and the road being!] without rolling stock or other equipments, to authorize Mm to make provis- ] ion for operating the road by purchasing the necessary equipments, so as toil secure an income and profits.</p> <p>Id.—Lien of Receiver—Expenses—Counsel Fee—Costs—Care of Trust Property.—The expenses of the trustee and receiver reasonably incurred 1/ in the discharge of his trust, are a lien upon the trust property prior to that I of the bondholders. Among the expenses which should he allowed him are| reasonable fees for counsel employed by him in the