North Missouri Railroad Company v. Maguire

ERROR to the Supreme Court of Missouri, the case being thus:

The North Missouri Railroad Company was incorporated by act of the legislature of Missouri, March 3d, 1851. By an act of January 7th, 1853, its charter was thus amended:

'The capital stock, together with all machines, wagons, cars, engines, or carriages belonging to the company, together with all their works or other property, and all profits which shall arise from the same, shall be vested in the respective shareholders of the company forever, in proportion to their respective shares, and the same shall be deemed personal estate, and shall be exempt from any public charge or tax whatsoever for the period of five years from and after the passage of this act.'

Under the provisions of several acts of the State legislature between the date of its incorporation and the year 1857, the State issued its own bonds for the benefit of the road, reserving a mortgage on the road to secure their payment. As between the State and the company the latter was bound to pay the bonds and interest on them, and it was provided that, in case the company made default, the governor should foreclose the mortgage.

About the year 1860 the company did make default in the payment of the interest on the bonds, and had paid no part of either interest or the principal since. No sale, however, was made of the road, and on the 29th of March, 1863, the legislature passed an act forbidding the governor to make a sale until he should be required by it to do so.

By an act of February 16th, 1865, meant to provide for the completion of the road, the company was authorized to issue $6,000,000 of its mortgage bonds, which should have priority over the mortgage of this State; and this to the extent named, and no farther, was by the act made a second lien. The act provided for the appointment of a fund commissioner for the railroad company. It then proceeded:

'SECTION 5. And the said railroad company shall pay over to the said fund commissioner all the gross earnings and daily receipts of said corporation, which shall be kept in deposit in the bank, subject to the daily draft of said fund commissioner, as the same may be required by said corporation for actual disbursement in operating said railroad, and in carrying on the ordinary business of said corporation, and for the other purposes hereinafter provided; and upon the failure of said company to pay said money to said fund commissioner, as herein provided, the said company shall forfeit and pay to the State of Missouri, for each and every such neglect or refusal, the sum of $10,000.

'SECTION 6. The said commissioner shall pay over to the said corporation, from time to time, out of the funds coming into his hands as aforesaid, the amounts required for purposes of construction and equipment of said railroad, upon vouchers of the chief engineer, and upon the vouchers of the treasurer thereof, he shall pay the amounts required for operating said railroad and carrying on the ordinary business of said corporation; and he shall pay and disburse the funds in the following order of priority, to wit:

'First. To the said corporation the amounts required, from day to day, for the actual current expenditures in operating said railroad and carrying on the ordinary business of said corporation, including all sums that may be necessary for keeping said railroad in a good state of repair, and all sums that may be necessary, for time to time, for such additions to the rolling stock, buildings, and appurtenances of said road, as may be required to enable said corporation to accommodate and transact the business of their said railroad; and,'Second, the amount of his salary as fund commissioner, in monthly instalments; and,

'Third, the interest upon said mortgage bonds, as the same shall fall due; and,

'Fourth, the cost of construction and equipment of said railroad as aforesaid; and,

'Fifth, the accruing dividends on preferred stock, not exceeding six per cent. per annum thereon, in accordance with the provisions of this act in relation thereto; and,

'Sixth, the interest due on the outstanding bonds of the State of Missouri heretofore loaned to said corporation; and,

'Lastly, the surplus remaining shall be applied to the payment of the principal of said first mortgage bonds until the same shall be fully paid off, or, if more of said bonds shall have become due, then to the payment of the principal of the said bonds of the State of Missouri if any still outstanding; and the balance shall be paid to the North Missouri Railroad Company, and the said office of fund commissioner shall then cease and be vacated.