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Opinion of the Court.
held not to cover municipal bonds issued to it in building the road, which were not embraced in such description. And in Bank v. Tennessee, 104 U. S. 493, where a bank was required by its charter to pay a certain tax in lieu of all other taxes, and was authorized to purchase and hold a lot of ground for its use “as a place of business," and hold such real property as might be conveyed to it to secure its debts, it was held that the immunity from taxation extended only to so much of the building as was required by the actual needs of the bank in carrying on its business. See also Tucker v. Ferguson, 22 Wall. 527.
Analogous cases in the state courts are numerous. Thus in Parish v. Wheeler, 22 N. Y. 494, it was held that canal boats purchased with the funds of a railroad company, and used and run by it in connection with its railroad, but beyond its terminus, were not covered by a mortgage of its engines, cars, etc., “and all other personal property in any way belonging or appertaining to the railroad of said company.” So in Boston & New York Air Line Railroad v. Coffin, 50 Connecticut, 150, the property mortgaged by the railroad company was described very nearly in the terms employed in the mortgage under consideration, and it was held that lands purchased by the company outside of the lay-out of the road, and not needed for its use or construction, were not covered by the mortgage. It was said in the opinion, that "lands purchased and sold at a profit, although the profit might be expended in the construction of the road, were never intended to be embraced by the phrase, 'acquired by the company for the purposes of the railroad." »
In Mississippi Valley Co. v. Chicago, St. Louis & New Orleans Railroad, 58 Mississippi, 846, a railroad mortgage covering property thereafter to be acquired was confined to such as was appurtenant to or necessary for building or operating the road, and carrying out the purposes for which it was created, and was held not to include a hotel and brick storehouse, some vacant town lots and a farm of three hundred acres; the hotel being used as a railroad eating-house, and the other property being rented out for the several purposes for which it was adapted. In Meyer
Opinion of the Court.
V. Johnston, 53 Alabama, 237, S. C. 64 Alabama, 603, a mortgage of a railroad and all other property now owned, and which may be hereafter owned by the railroad company," was held not to cover a land grant of the United States made by an act of Congress subsequently passed. Other cases to the same purport are: Shamokin Valley Railroad Co. v. Livermore, 47 Penn. St. 465; Dinsmore v. Racine &c. Railroad Company, 12 Wisconsin, 725; Farmers' Loan &c. Company v. Commercial Bank, 11 Wisconsin, 207; S. C. 15 Wisconsin, 424; Morgan v. Donovan, 58 Alabama, 241; Walsh v. Barton, 24 Ohio St. 28; Calhoun v. Memphis & Paducah Railroad, 2 Flippin, 442; Seymour v. Canandaigua & Niagara Falls Railroad, 25 Barb. 284.
A consideration of the circumstances attending and following the execution of this mortgage strengthens the inference that we have drawn from it, that the land grant was not intended to be included. There is no allegation in the bill that the parties to this mortgage expected, or had any reason to expect that the land grant would be made; and had it been intended to include so important an item, it is scarcely possible that the mortgagor would have left such intention to be inferred from the indefinite and ambiguous language of this instrument. Nor is there any evidence that, after the act of Congress was passed, the line of the road was ever definitely fixed, as contemplated by section 9 of the act of March 3, 1871, 16 Stat. c. 122, 573, 576, although it had filed a map designating the general route of the road pursuant to sections 12 and 22, and obtained an order from the Secretary of the Interior withdrawing from entry and sale the odd-numbered sections of land within the grant and indemnity limits. As the grant was, by section 9, of lands not sold, reserved or otherwise disposed of at the time the route of the road was definitely fixed, it is settled in this court that the title to any particular lands would not pass until the line was so located, because until that time it could not be definitely ascertained what lands had been otherwise disposed of. Van Wyck v. Knevals, 106 U. S. 360; Kansas Pacific Railway v. Dunmeyer, 113 U. S. 629; Sioux City Land Co. v. Griffey, ante, 32. As to lands
Opinion of the Court.
within the indemnity limits, it has always been held that no title is acquired until the specific parcels have been selected by the grantee, and approved by the Secretary of the Interior. Grinnell v. Railroad Company, 103 U. S. 739; Kansas Pacific Railroad v. Atchison, Topeka &c. Railroad, 112 U. S. 414, 421; St. Paul &c. Railroad v. Winona & St. Peter Railroad, 112 U. S. 720; Barney v. Winona & St. Peter Railroad, 117 U. S. 228; United States v. Missouri &c. Railway, 141 U. S. 358, 375; St. Paul &c. Railroad v. Northern Pacific, 139 U. S. 1. A definite location of this line was subsequently made by the Pacific Company; but there is no evidence that such location coincided with the general route designated by the Baton Rouge Company, and as no patents were ever issued for the lands earned by the construction of the road until March, 1885, when they were issued to the Pacific Company as assignee of the Baton Rouge Company, it is difficult to see what lands were ever "acquired” by the latter company, to which this mortgage would attach.
Not only this, but there is no allegation or evidence that the Baton Rouge Company paid the cost of surveying, selecting and conveying these lands, as required by the act of July 31, 1876, 19 Stat. c. 246, 102, 121, as a preliminary to their conveyance. New Orleans Pacific Railway v. United States, 124 U. S. 124; Deseret Salt Co. v. Tarpey, 142 U. S. 241. Nor is there any evidence to show that the Baton Rouge Company ever built any of its line of road or did anything to earn or acquire the title to any part of its land grant.
(3) The decrees in this case were also fatally defective in ordering all the lands assumed to be covered by this mortgage to be sold, free from all liens, mortgages and incumbrances, to satisfy a claim of $2400 in one case and $6000 in another, without making provision for other bondholders, subsequent mortgagees, or other creditors of the road. Assuming for the purposes of this case that, under the peculiar terms of this mortgage, these bondholders had the right to file this bill without calling upon the trustee to act — a point upon which we express no opinion — they had no right to a decree for their exclusive benefit. If a single bondholder has any right
Opinion of the Court.
at all to institute proceedings, he is bound to act for all standing in a similar position, and not only to permit other bondholders to intervene, but to see that their rights are protected in the final decree. Upon this principle it was held by this court, in Pennock v. Coe, 23 How. 117, that a bondholder cannot, by getting a judgment at law, be permitted to sell a portion of the property devoted to the common security, as this would disturb the pro rata distribution among the bondholders to which they are equitably entitled. “These bondholders," said Mr. Justice Nelson, "have a common interest in this security, and are all equally entitled to the benefit of it; and in case of a deficiency of the fund to satisfy the whole of the debt, in equity, a distribution is made among the holders pro rata.. To permit, therefore, one of the bondholders under the second mortgage to proceed at law in the collection of his debt upon execution would not only disturb the pro rata distribution in case of a deficiency, and give him an inequitable preference over his associates, but also have the effect to prejudice the superior equity of the bondholders under the first mortgage, which possesses the prior lien.” Jones on Railroad Securities, sections 392, 393, 434; Fish v. N. Y. Water-Proof Paper Co., 29 N. J. Eq. 16; Martin v. Mobile & Ohio R. R. Co., 7 Bush, 116.
In Railroad Company v. Orr, 18 Wall. 471, 475, a bill was filed by a bondholder, on behalf of himself and all others, against a county and a railroad company for the foreclosure of a mortgage given by the railroad company to secure the redemption of certain bonds issued by the county, and for a sale of the mortgaged property. The railroad company demurred for want of proper parties. It was held that the other bondholders should be parties to the suit, and, in delivering the opinion of the court, Mr. Justice Hunt observed: “It is the interest of every bondholder to diminish the debt of every other bondholder. In so far as he succeeds in doing that, he adds to his own security. Each holder, therefore, should be present, both that he may defend his own claims and that he may attack the other claims should there be just occasion for it. If upon a fair adjustment of the amount of the debts there
should be a deficiency in the security, real or apprehended, every one interested should have notice in advance of the time, place and mode of sale, that he may make timely arrangements to secure a sale of the property at its full value.”
In the view we have taken of the case it is unnecessary to consider the other points made by the defence. We are satisfied, both from the words of the mortgage itself, and from the circumstances attending its execution, that it should not be construed to include the land grant subsequently made to this company.
The decrees of the court below must be
the bills of Parker and Hamlin, and for further proceed-
NEW YORK, LAKE ERIE & WESTERN RAILROAD
COMPANY v. WINTER'S ADMINISTRATOR.
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE
DISTRICT OF MASSACHUSETTS.
No. 169. Argued January 19, 20, 1892.
Decided February 1, 1892.
Parol evidence of what is said between a passenger on a railroad and the
ticket-seller of the company, at the time of the purchase by the passenger of his ticket, is admissible as going to make up the contract of carriage
and forming part of it. Passengers on railroad trains are not presumed or required to know the rules
and regulations of the company, made for the guidance of its conductors
and employés, as to its own internal affairs. Plaintiff bought a ticket in Boston entitling him to a passage over defend
ant's road. At the time he informed the ticket agent of his wish to stop off at the Olean station, and was then told by the agent that he would have to speak to the conductor about that. Between Binghamton and Olean the plaintiff informed the conductor that he wished to stop over at Olean and the conductor, instead of giving him a stop-over ticket, punched his ticket and told him that was sufficient to give him the right to stop over at Olean, and afterwards to use the punched ticket between Olean and Salamanca. He made the stop, and taking another train to Salamanca, presented the punched ticket, informing the conductor of what had taken