Gue v. Tide Water Canal Company

THIS was an appeal from the Circuit Court of the United States, sitting in equity, for the district of Maryland.

The case is stated in the opinion of the court.

It was argued by Mr. Campbell and Mr. McLaughlin for the appellant, and Mr. Dobbin for the appellee.

The canal company had made a deed of trust, which was attacked as fraudulent, and defended by Mr. Dobbin, but the arguments upon that point will be passed over.

Upon the question of selling the franchise under a fieri facias, the counsel for the appellant said:

The question then is, whether land held in fee by a company for a canal and its appurtenances can be seized and sold, not by piecemeal, but so that the purchaser will take the land with the entire improvement as it stands.

In 4 Massachusetts, 596, Tippetts v. Walker, Parsons, Chief Justice, said it might require consideration whether this franchise could be taken in execution, but he does not decide it. That was a case of a turnpike road, and it is apprehended that no estate in the land passed to the Turnpike Company.

In 13 Sergeant and Rawle, 212, an execution was levied on ten miles of a turnpike, with a toll-house and appurtenances. It was there decided that the execution could not be sustained, and among the grounds relied on were the facts that the company had no estate in the land, and that it could not be cut up into parts. In both these particulars the case at bar is distinguishable.

In 5 Watts and Sergeant, 265, Leedon v. Plymouth Railroad Company, the plaintiff, who was an execution creditor, had not executed the land, but claimed that his judgment was a lien upon the tolls, and gave him a priority in payment out of the tolls collected by a sequestration. What might have been the decision if the land had been levied on does not appear, and the decision goes merely on the ground that the tolls were not bound by the judgment.

In 9 Watts and Sergeant, 27, Susquehanna Canal Co. v. Bonham, the execution was levied on a toll-house, and not on the whole work, and the court followed the decision in 13 Sergeant and Rawle, and an act of Assembly of Pennsylvania, of 1836, which had been passed subsequently to that decision.

In 9 Georgia, 394, Macon Railroad Co. v. Parker, it was made the subject of a query, whether a railroad could be sold under an execution at law. In that case it had been sold under a decree in chancery.

In 10 Ohio, 476, Seymour v. Milford and Chilicothe Turnpike Co., the question was, whether the tolls of the road could be levied on under the Ohio act of 8th February, 1826, without notice first given to a receiver, and the decision was merely on the construction of a local statute.

In 5 Ben. Monroe, 1, it was decided that in Kentucky a turnpike road could not be sold under a decree in chancery, the only decree allowable in such a case at a creditor's suit being the application of the tolls.

In Coe v. Hart, before Mr. Justice McLEAN, (6 Am. Law Reg., 42, ) it was said, on the contrary, in regard to a railroad company, that while the proper mode of enforcing payment was by a proceeding in chancery to distribute the earnings equitably among the creditors, yet in a case where such a course would not satisfy their demands, the road might be sold, and the proceeds distributed; and the same doctrine was laid down by the superior court of Cincinnati, in the case of Ludlow and Heard, reported in the same volume of the Law Register, at page 503.

In State v. Rives, 5 Iredell's Law Rep., 297, it is said that the corporation having an estate in the lands, and not a mere easement, it seems to follow that such an estate is liable to execution.

In Arthur v. Comm. and Railroad Bank, 9 Smedes and Marshal, 394, 434, the court says, whether the road is the subject of assignment or execution depends on the nature of the estate which the corporation has in it.

The differing views in these cases make it difficult to say that there is any settled rule at common law, and throw us back on principle; and so considered, it seems hard to escape the conclusion that as, after all, a corporation is merely placed on a level with individuals, it cannot hold its property exempt from the payment of its debts. But of course a purchaser would take, not the corporate franchise, but the estate of the corporation in the land, and would take that estate, of course, as the corporation held it. Holding it in this case on the condition of allowing the public to use the canal on payment of certain fixed tolls, the same user on the terms would continue to exist after the sale as before. (1825, c. 180, sec. 12.)

Perhaps, however, the true view in which to regard this case is to look at it as controlled by the law of Maryland, and the analogies of that law. The element which elsewhere seems to settle that a public improvement cannot be sold on execution, is its inalienability. If the Legislature will allow a voluntary assignment, the presumption of a prohibition against involuntarily alienation falls to the ground.

The act of Maryland of 1835, ch. 356, sec. 5, authorized the company to raise money by a loan, and the Court of Appeals of that State, in 3 Maryland, 311, Susquehanna Bridge and Banking Co. v. General Insurance Co., decided it to be the law of Maryland, that the power in a corporation to borrow, (and the corporation then before the court was a bridge as well as a banking corporation,) carried with it the power to mortgage. The deed in this case of December, 1841, was drawn upon the assumption that the power to mortgage existed, for it authorizes a mortgage. (Rec., 10.) But a power to mortgage necessarily involves a sale as a possible result; and if, therefore, in the present instance, the General Assembly of Maryland have authorized the company to part with its land and canal, it cannot be said that any public policy forbids a sale on execution.

See, also, 7 How., 278.

21 How., 138, 125.

Mr. Dobbin for the appellee:

3. The property levied upon is not properly the subject of a levy and sale under a fieri facias.

The levy was made on the locks of the canal, its toll-house or collector's office, and the land surrounding the outlet locks, all admitted to be essential for the uses and working of the canal. The agreement which states these facts is ambiguous in admitting the construction that the property levied on comprises the entire property of the Tide Water Canal Company, and that a sale of that by the sheriff would transfer to the purchaser a complete thing, which would enable him to discharge the duty to the public of maintaining it as a highway. This construction, it is obvious from the context, is not the true one. In the paragraph preceding, it is said that the company 'owns the line canal and its appurtenances, which extends from Havre de Grace, in Maryland, to the Pennsylvania line,' which is of course inconsistent with the construction that the locks and toll-house, &c., which do not comprise the thousandth part of the line, constitute the whole property. Besides, the property levied upon is stated to be necessary to the uses and working of the canal; it must therefore be something other than the canal itself, and is obviously intended to apply to that part of the thing levied upon which is not visibly a part of the canal, that is, land which the marshal, in his levy, calls wharf property and building lots, &c., all of which are admitted to be necessary for the uses and working of the Tide Water canal.

The appellee contends that it possesses only an easement, acquired for the purposes of its incorporation, connected with the franchise of taking toll from the public for the use of that easement, and that the said easement and franchise are not subject to levy and sale under a fieri facias.

Ammant v. New Alexandria and Pittsburg Turnpike Road Co., 13 Serg. and Rawle, 210.

Leedon v. Plymouth R. R. Co., 5 Watts and Serg., 265.

Susquehanna Canal Co. v. Bonham, 9 Watts and Serg., 27.

Seymour v. Milford and Chilicothe R. R. Co., 10 Ohio, 476.

Winchester and Lexington Turn. Co. v. Vimont, 5 B. Monroe, 1.

Coe v. Hart, 6 Am. Law Reg., 41-2.

Ludlow v. Heard, Ib., 502.

Tippetts v. Martin, 4 Mass., 596.

Macon R. R. Co. v. Parker, 9 Geo., 377.

That even if a portion of the property levied upon is liable to sale, the levy having blended it with that which is not liable, is void for the whole.

Ammant v. New Alexandria and Pittsburg Turnpike Road Co., 13 Serg. and Rawle, 210.

Mr. Chief Justice TANEY delivered the opinion of the court.