Janes v. Fitchburg R. Co.

Landon, J.

The plaintiff had a recovery against the defendant upon certain past-due interest coupons of the bonds of the Troy & Boston Railroad Company. The payment of the bonds and coupons is secured by a mortgage given by the company in 1874 to trustees upon the real estate and property of the Troy & Boston Railroad Company. The principal of the bonds falls due in 1924. The mortgage contains no covenant to pay the bonds or post-foreclosure deficiency. The defendant is a new corporation, formed by the consolidation in June, 1887, of the Troy & Boston Railroad Company and the former Fitchburg Railroad Company, made by an agreement under and in *166pursuance of chapter 917, Laws 1869. The liability of the defendant, the new corporation, upon these past-due coupons, if any, exists by virtue of the terms of the aforesaid act of consolidation. The act provides for the consolidation of two or more railroads, coming within the terms of the statute, by organizing a new corporation, to which all the property and franchises of the roads joining in the consolidation are to be transferred. It is manifestly the purpose of the act to place the new company completely in the shoes of the constituent companies with respect to their property and franchises, and also with respect to their debts and liabilities, except as provided in the fourth and fifth sections of the act. By section 4 all real estate, personal property, rights, franchises, privileges, and exemptions of the old companies become vested in the new. Section 5 provides: “The rights of all creditors of and all liens upon the property of either of said corporations, parties to said agreement and act, shall be preserved unimpaired, and the respective corporatiohs shall be deemed to continue in existence to preserve the same, and all debts and liabilities incurred by either of said corporations, except mortgages, shall thenceforth attach to such new corporation, and be enforced against it and its property to the same extent as if said debts or liabilities had been incurred or contracted by it.”

The question presented by this appeal is: Do the words “ except mortgages” exempt the new company from present liability upon the past-due coupons in suit? The contention of the plaintiff is that the coupons are not mortgages; that the bonds are not mortgages; that the present action does not seek to make the defendant answerable upon the mortgage liability of the Troy & Boston Railroad Company, but does seek to make it answerable upon a liability of that company which exists by virtue of its promise to pay, and for which the mortgage is only collateral, and possibly inadequate, security. This view prevailed in the court below. We should be inclined to adopt it, if by .any fair construction of the exception we could attach it to anything else than to the debts and liabilities of the constituent company secured by mortgage. But if the term “mortgages,” in the connection in wliich it is used, does not mean the debts secured by their very terms, what else does it mean ? We are to look for the legislative intent. We know that the draughtsmen of legislative bills are sometimes incompetent"or careless, and do not always use words with technical precision. We must therefore try to discover what is the meaning intended to be conveyed by the words employed, so that the act shall accomplish its manifest purpose, instead of defeating it. We know well enough that in ordinary language the term “mortgage” is commonly used to signify the debt it secures. We think that is what it means here; that such was the meaning intended by the legislature; and that every other suggested meaning is artificial and unnatural. The new company, by the terms of the act, is liable for “all debts and liabilities incurred by either of said corporations, except mortgages. ” In the legislative mind mortgages were either debts or liabilities. The exception is made out of the class previously mentioned. We can argue that mortgages are neither debts nor liabilities, and are made, not incurred; but it is clear that the legislature did not pause over technical distinctions, nor search for technical accuracy. They used language of very common use in the sense of its common acceptation. Debts and liabilities secured by mortgage are usually regarded as already protected. We can suppose this to have been the reason for the exception. A case may arise—the present may be such a case—in which the mortgage security is inadequate. If so, we can conceive that it either is unprovided for or that the justice of making a third party, succeeding to the over-incumbered property, liable for such debts of the insolvent constituent, was denied; or that to the extent that the mortgaged property fails to pay the mortgage debt, to that extent, where the fact appears, the debt is not secured, and therefore not within the excep-■ tion of the statute, and hence the liability of the new company exists, but *167meanwhile is undeterminable. However this may be, we are to interpret the statute as we find, it, giving full effect to its words in the sense which the legislature, as we can gather it from the act itself, employed them. The judgment is reversed, and a new trial granted, costs to abide the event.

Ingalls, J., concurs.