chattel mortgage act, the vendor's lien has no validity as against third persons. While as a contract it is legal and valid between the parties, the vendor incurs the risk of losing his lien if it work a legal wrong to third parties. A mortgage covering both the road and the rolling-stock need not be recorded as a chattel mortgage also. And railway mortgages are not subject to the provisions of chattel mortgage statutes requiring record to be made in the county in which the property is situated. Where creditors of the railway company, having no actual notice of an unrecorded mortgage, have the right to levy upon the corporate property, they will not be postponed to the mortgage creditors by reason of the latter having instituted foreclosure proceedings.9

1 Coe v. Columbus etc. R. R. Co. 10 Ohio St. 372; 75 Am. Dec. 518.

2 Coe v. Columbus etc. R. R. Co. 10 Ohio St. 372; 75 Am. Dec. 518.

3 Frank v. Denver etc. R'y Co. 23 Fed. Rep. 123; Heryford v. Davis, 102 U. S. 235; S. C. 2 Am. & Eng. R. R. Cas. 386; Hervey v. Rhode Island etc. Works, 93 U. S. 664.

4 Ill. Rev. Stat. (1874,) 711, 712.

5 Fosdick v. Schall, 99 U. S. 235, 250; Hervey v. Rhode Island, 93 U. S. 664; Green v. Van Buskirk, 5 Wall. 307.

6 Fosdick v. Schall, 99 U. S. 235, 251; Murch v. Wright, 46 Ill. 488; 95 Am. Dec. 455.

7 Farmers' Loan & Trust Co. v. St. Joseph etc. R. R. Co. 3 Dill. 412. See, however, Williamson v. New Jersey Southern R. R. Co. 29 N. J. Eq. 311.

8 Metropolitan Trust Co. v. Pennsylvania etc. R. R. Co. 25 Fed. Rep. 760. See also, Hammock v. Farmers' Loan & Trust Co. 105 U. S. 77.

9 Coe v. New Jersey Midland R. R. Co. 31 N. J. Eq. 105.

§ 616. What property is covered by a mortgage. The question as to what property is covered by a mortgage is entirely one of construction, dependent upon the authority under which the mortgage was made, and the intention of the parties as gathered from the language used, the same rules

being applicable as control the construction of deeds made by individuals.' It is evident that, when the mortgaged property is specifically described, there can be but little room for controversy; for a description or enumeration of certain things, real or personal, as subject to the mortgage, is exclusive of all others." But when such general terms as "all other property," "the undertaking," and "appurtenances, ," have been employed, there has been no little litigation over the intention of the parties. A mortgage of railway property is to be construed in connection with the statute by which its execution is authorized; and when the statute confers upon the company the power to mortgage the whole, a deed couched in general terms will be deemed to create a lien upon all of the corporate property, unless a contrary intention appear in the instrument itself;" and, on the other hand, mere general words of description are not to be construed as extending the lien beyond the subject-matter as defined by the enabling act. The franchise of being a corporation is not included in a mortgage of the property and franchise of a railroad, unless by positive provision of law.9

1 Wood's Railway Law, 1617; Wilson v. Gaines, 103 U. S. 417. 2 Smith v. McCullough, 104 U. S. 25; Brainerd v. Peck, 34 Vt. 496. 3 Vide infra, § 617; Alabama v. Montague, 117 U. S. 602.

4 Vide infra, § 617; Gardner v. London etc. R'y Co. Law R. 2 Ch. 201. 5 Vide infra, § 617; Shamokin Valley R. R. Co. v. Livermore, 47 Pa. St. 165; 86 Am. Dec. 552.

6 Wilson v. Gaines, 103 U. S. 417; Coe v. Midland etc. R. R. Co. 31 N. J. Eq. 105.

7 Coe v. Midland etc. R. R. Co. 31 N J. Eq. 105.

8 Wilson v. Gaines, 103 U. S. 417.

9 Memphis etc. R. R. Co. v. Berry, 112 U. S. 609; New Orleans etc. R. R Co. v. Delaware, 114 U. S. 296.

§ 617. (a.) Of the effect of general words of description.-A general mortgage creates a lien

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only upon such property of the company as is useful and necessary for the operation of the railway. Accordingly, it does not cover property bought from a steamboat company for the purpose of destroying competition;' nor land purchased for shops and depots, but never used for those purposes; nor a track laid only for a temporary use;3 nor woodland. The words "all other property" in a mortgage executed by a railroad company in favor of a State to secure it for a loan of its credit to the company, do not operate to include within the mortgage all the lands belonging to the company not specifically described. A general mortgage of a railway and of all property "appertaining thereto" does not create a lien upon town lots owned by the company, nor upon canal-boats used beyond the termini of the line. A mortgage does not, of course, create a lien upon land grants which the railway has no authority to accept;" nor upon land granted conditionally, until the company has performed the condition." The word "undertaking," more commonly found in the English mortgage deeds, is held to mean the going concern created by the act of incorporation; and the mortgagees of the "undertaking" cannot break it up, nor, by bringing ejectment, deprive the company of that property by which the undertaking is carried on. 11 Accordingly, a mortgage of the "undertaking" does not cover the soil of the railway itself, nor its surplus lands," nor stock or property belonging to the company as common carriers,1 nor future calls.15 But a mortgage of the undertaking passes the rails, stations, works, and other buildings.

12

16

10

1 Morgan v. Donivan, 58 Ala. 241.

2 Youngman v. Elmira e c. R. R. Co. 65 Pa. St. 278. 3 Van Keuren v. Central R. R. Co. 38 N. J. 165.

4 Dinsmore v. Racine etc. R. R Co. 12 Wis. 649.

5 Alabama v. Montague, 117 U. S. 602. But see Wilson v. Boyce, 92 U. S. 320, where a statute declaring State-aid bonds to be a lien upon the road and property of the company, was held to extend the lien to all the lands whether used for a roadway or not. As to when the designation of land in a mortgage or lien is sufficient, see further, Alabama v Montague, 117 U. S. 610; St. Louis etc. R. R. Co. v. McGee, 115 U. S. 476.

6 Calhoun v. Memphis etc. R. R. Co. 2 Flip. 442. Cf. Shamokin Valley R. R. Co. v. Livermore, 47 Pa. St. 465; 86 Am. Dec. 552; Gardner v. London etc. 1'y Co. Law R. 2 Ch. App. 201.

7 But "all other personal property whatsoever in any way" used by the company, cove s canal-boats used beyond the termini: Parish v. Wheeler, 22 N. Y. 494.

8 Meyer v. Johnston, 53 Ala. 237.

9 Campbell v. Texas etc. R. R. Co. 2 Woods, 263.

10 Gardner v. London etc. R'y Co. Law R. 2 Ch. 201.

11 Myatt v. St. Helen's R'y Co. 2 Q. B. 364; S. C. 2 Eng. R'y Cas 756; 1 Hodges on Railways, 124.

12 Myatt v. St. Helen's R'y Co. 2 Q. B. 364; S. C. 2 Eng. R'y & Canal Cas. 756 Wood's Railway Law, 1617.

13 Gardner v. London etc. R'y Co. 2 Ch. 201; King v. Marshall, 33 Beav. 565; Ex parte Stanley, 33 Law J. Ch. 535. See, too, Moor v. AngloItalian Bank, 10 Ch. Div. 681.

14 Hart v. Eastern Union R'y Co. 7 Ex. 246.

15 Gardner v. London etc. R'y Co. 2 Ch. 201; King v. 'Marshall, 33 Beav. 565; Ex parte Stanley, 33 Law J. Ch. 535. See, too, Moor v. Anglo-Italian Bank, 10 Ch. Div. 681.

16 Legg v. Mathieson, 2 Giff. 71. See Wickham v. New Brunswick etc. R'y Co. Law R. 1 P. C. 64; Browne & Theobald's Railway Law, 86.

§ 618. (b). Whether general words of description include future acquisitions. -A mortgage in general terms covering all the property of the company, without express words of futurity, extending the lien to property subsequently acquired, will nevertheless embrace future acquisitions which are necessarily incidental to the railway,' and which, at the time the mortgage was executed, the company had authority to acquire. Thus, lands taken under an existing statute, authorizing the construction of a branch road, have been held to be covered by a mortgage containing no words of futurity. But in

2

a similar case, where the statutory authority was granted after the mortgage had been made, the lien did not extend to the newly constructed branch; for it could not have been intended to mortgage that which at the time the company had no authority to acquire.*

1 Shaw v Bill, 95 U. S. 10; Pennock v. Coe, 23 How. 117; Pierce v. Emery, 37 N. H. 410; Ludlow v. Hurd, 1 Disn. 552; Dinsmore v. Racine etc. R. R. Co. 12 Wis. 649; Farmer's Loan & Trust Co. v. Commercial Bank, 15 Wis. 465; 82 Am. Dec. 689.

2 Seymour v. Canandaigua etc. R. R. Co. 25 Barb. 284. See, also, Shaw v. Bill, 95 U. S. 10.

3 Seymour v. Canandaigua etc. R. R. Co. 25 Barb. 284.

4 Meyer v. Johnston, 53 Ala. 237.

j 619. (c). Of choses in action and calls.-A mortgage of "all the property" does not embrace choses in action unless specifically mentioned.' In Pennsylvania, it is held that mortgages of the personal property of a railway, out of possession, are to be postponed to creditors who have obtained a lien by judicial process. Words of futurity in a general mortgage do not create a lien upon unpaid subscriptions to the capital stock of the company.3 In England, the Companies' Clauses Consolidation Act of 1845 declares that no mortgage, although comprising future calls, shall preclude the company from receiving and applying the calls to corporate purposes, "unless expressly so provided.' But it would seem that a mortgage of future calls may contain a power of sale notwithstanding this section. The words "unless expressly so provided," appear to mean, provided by the mortgage deed, and not by the special act of incorporation.

1 Milwaukee etc. R. R. Co. v. Milwaukee etc. R. R. Co. 20 Wis. 174; 22 Am. Rep. 702.

2 Wood's Railway Law, 1624, citing Merchants' Bank v. Petersburg R. R. Co. 12 Phila. 482