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Opinion of the Court.
debts for construction are a lien on a railroad superior to the lien of a valid mortgage duly recorded, and of bonds secured thereby, and held by bona fide purchasers for value. The authorities are all the other way."
It is urged by the appellee, in objection to the force of these propositions, as applied to the facts in this case, that at the time this mechanic's lien was created the legal title was not in the railroad company, but in one George W. Ballou; that as the mortgagor had no legal title, the mortgage created no legal lien; that while by the decree of foreclosure the legal title was transferred to the mortgagor, it was transferred subject to the burden of the mechanic's lien; and the cases of Williamson, Trustee, v. New Jersey Southern Railroad, 28 N. J. Eq. (1 Stewart,) 277, also 29 N. J. Eq. (2 Stewart,) 311; and Botsford v. New Haven, Middletown &c. Railroad Co., 41 Conn. 454, are especially relied upon. But the facts in those cases are very different from those in this. In the New Jersey case, the defendant railroad company had executed a mortgage with the "after acquired property" clause in it, duly recorded. It was also the owner of a large majority of the stock in the Long Branch and Sea Shore Company, and was in possession of and operating the latter company's road. No consolidation in fact of the two companies had taken place; but being in possession of the latter company's road, it had contracted for the building of certain docks, walls and piers, at the terminus of such road. Having failed to make payment for such work, a mechanic's lien was perfected upon the latter company's road. Upon a suit to foreclose the mortgage given by the defendant railroad company, the chancellor, laying hold of the fact that the defendant railroad company was the owner of this large majority of the stock was in possession of and operating the latter company's road --- decreed that such road, with its property and franchises, belonged to the defendant railroad company, and as after acquired property was subject to complainant's mortgage, but subordinate to the mechanic's lien. On review in the Court of Errors and Appeals, as reported in 29 N. J. Eq., supra, the decision of the chancellor was sustained, the court saying: “Until
Opinion of the Court.
that decree was signed, the right of the complainant in the lands of the Sea Shore Company under his mortgage was a mere unexecuted equity to have the benefit of such equities as his mortgagor had in the premises, without any legal title in himself or in his mortgagor upon which his mortgage as a conveyance could operate. When the decree of the chancellor was signed, which established the lien of complainant's mortgage on the property of the Long Branch and Sea Shore Company, Berthoud & Co. had, by force of the provisions of the mechanic's lien act, acquired a lien on the premises which related back to the commencement of the building, and was entitled to priority over all conveyances, mortgages or encumbrances subsequent thereto. This lien was not displaced by the chancellor's decree, which, in the absence of fraud, could be effective only to bring under the complainant's mortgage the lands of the Sea Shore Company, subject to such liens as were lawfully acquired while the legal estate was in that company. The chancellor's decree adjudging the validity and priority of the claim of Berthoud & Co. should be affirmed." Unquestionably such ruling was correct. The owner of a majority of the stock in a railroad corporation has no title to the road. The title is in the corporation, and he is not the corporation. A mortgage by the owner of such stock is no lien upon the road, and does not prevent the casting of any legal lien upon it. So that, while for the many equitable reasons stated in the opinion, the decree vested the property in the latter road in the defendant railroad company, yet it perfected and transferred that title, subject to all legal liens then existing upon it. As the Court of Errors and Appeals well said, until that decree was signed the right of the complainant, the mortgagee, was a mere unexecuted equity, to have the benefit of such equities as his mortgagor had in the premises.
In the Connecticut case the facts were these: After giving the mortgage the railroad company desired to erect a depot on land adjoining its track. The owner agreed to give the compauy the land provided it would build a depot. Upon the building a mechanic's lien was filed. The owner had never
Opinion of the Court.
made a conveyance. Upon a foreclosure of the mortgage the mechanic's lien upon the building and the ground upon which it was constructed was held prior to the mortgage. The decision was based upon the ground that the full equitable title never passed to the railroad company until the completion of the building, and then it passed subject to the burden of the mechanic's lien. Hence, though after acquired property, and subject to the lien of the mortgage, it was when acquired already burdened with a lien.
But in the case at bar, as appears from the testimony and the decree, only the naked legal title remained in Ballou; the full equitable title was in the railroad company — and in that company before the contracts were entered into. The railroad company had the same title when it made the contracts that it had when the work was done and the decree rendered. Hamilton's contracts were with the railroad company, and of course gave a lien upon the lands only to the extent of the title that the railroad company had. The mortgage being one with words of general description, conveyed land held by a full equitable, as well as that held by a legal, title. Jones on Mortgages, section 138; Massey v. Papin, 24 How. 362; Farmers' Loan and Trust Co. v. Fisher, 17 Wisconsin, 114; Lincoln Building Association v. Hase, 10 Nebraska, 581; Laughlin v. Braley, 25 Kansas, 147. We conclude, therefore, that there is nothing in this fact to justify an award of priority to appellee.
It is further objected by the appellee that the ground upon which this dock was built was never acquired by the company which executed the mortgage, but by a new company into which the mortgagor company passed by consolidation. In view of the condition of the record we are compelled to accept the statement of the court in its decree, which is, that the property was covered by the mortgage in suit. Again, it is urged that a part of the work was done after the receiver was appointed, and by his authority. The report of the master does not sustain this claim; neither does the account filed by the intervenor for the purpose of securing his mechanic's lien. And while there is testimony tending to show that he did
Statement of the Case.
some work after the appointment of a receiver, there is also contradictory testimony. And even in that part of the testimony which tends to show that work was done after the appointment of a receiver, there is nothing to indicate how much was done, or whether it was done by the authority and direction of the receiver, or simply in completion of a contract theretofore entered into with the company.
These are all the facts we deem it necessary to mention. The decree of the Circuit Court will be
Reversed, with instructions for further proceedings in accordance with the views herein expressed.
DE WITT v. BERRY.
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK.
No. 173. Argued January 7, 8, 1890. — Decided March 17, 1890.
If a contract of sale is in writing and contains no warranty, parol evidence is not admissible to add a warranty.
If a contract of sale in writing contains a warranty, parql evidence is inadmissible to show a warranty inconsistent with it.
An express warranty of quality in a sale excludes any implied warranty that the articles sold were merchantable.
A warranty cannot be implied in a sale when there is an express warranty of quality, accompanied by the delivery and acceptance of a sample, as such.
The party who seeks to establish that words are used in a contract in a different acceptation from their ordinary sense must prove it by clear, distinct and irresistible evidence.
When parties have reduced their contract to writing, without any uncertainty as to the object or extent of the engagement, evidence of antecedent conversations between them in regard to it is inadmissible.
THIS action was commenced in the Marine Court of the city of New York, to recover $1687.51, alleged to be due plaintiffs, for a quantity of varnish, etc., sold and delivered to defendants between November 9, 1881, and May 15, 1882. It was duly removed into the Circuit Court of the United
Statement of the Case.
States for the Southern District of New York, on the petition of the defendants, the plaintiffs being citizens of Michigan, the defendants citizens of New York, and the amount sought to be recovered, exclusive of costs, exceeding $500.
The record appears to contain substantially all the evidence. It shows the material facts to be as follows:
On the 24th of June, 1881, a contract was made between the parties in these terms:
"BROOKLYN, N. Y., June 24th, 1881.
"We hereby agree to deliver to Messrs. H. J. De Witt & Son, at their factory in Brooklyn in N. Y., eighty (80) barrels of japan and twenty (20) barrels of varnish within one year from date, these goods to be exactly the same quality as we make for the De Witt Wire Cloth Company of New York, and as per sample bbls. delivered.
"Turpentine copal varnish, at 65c. per gallon.
"Turpentine japan dryer, at 55c.
"Each shipment to consist of eight (8) barrels japan and two (2) barrels varnish, to be made once a month, commencing September next.
"Terms on each shipment, six months, without interest.
"per A. HOOPER, Manager."
"We hereby accept the above proposition.
Brooklyn, June 24th, '81."
"J. H. DE WITT & SON
At the time stipulated, the defendants in error, Berry Bros., delivered the proper number of barrels of varnish and of dryer, but the plaintiffs in error claim that the dryer did not conform to the contract, in quality. They not only resist the payment of a balance due of the purchase-money, but also present a cross-demand for $17,500 for alleged breach of contract. The precise point of controversy is as to the relative quantities of turpentine and of benzine in the dryer. It appears that plaintiffs in error were manufacturers of wire