Page:Federal Reporter, 1st Series, Volume 7.djvu/396

 884 tbdebal bbpobteb. �by the corporation and its offlcers of the possession and control of all of its franchises, the exercise of which would not conflict with the receivers in the performance of their duties. The order clearly recognizes that the corporation still continues to exist, and the permission ■which it granta to the offlcers of the corporation ia applicable only when action is requested by the receivers. It refers to a class of acts which would, or — as is quite sufflcient for the present purpose — which might afEect the admin- istration by the receivers of the property in their hands. It was, we be- lieve, intended merely to facilitate their management and use of that property, and we think it would require a very strained construction of this or of any similar order of the court to enable us to hold that they eitherafflrmed that the court had previously assumed the control of all the corporate franchises, or that it intended to do so in mailing such orders. �" It was further argued, however, that, apart from the language of the decree of May 24, 1880, and of the subsequent orders, the eJQEect of such a decree as was made ia, upon any interpretation of it, to put the court iu control of all the franchises of the corporation, and therefore to draw to itaelf a directory jurisdiction with respect to every subsequent corporate act. These proceedings have been instituted upon the mortgage dated Deoember 1, 1876, known as the income mortgage, and upon the mort- gage dated July 1, 1874, known as the general mortgage. Each of these mortgages includes franchises of the company, by a clause substantially the aame, being the franchises ' connected with or relating to the afore- said railroads, other premises, or any of them ;' that is to say, connected with or relating to the property mortgaged. The statute of Pennaylva- nia of April 8, 1861, (Purdon's Digest, 290, pi. 49,) and ita supplements, were referred to, as showing that, upon a sale under these mortgages, the franchises would pass, and it was thence argued that receivers ap- pointed under the same mortgages, pending proceedings for forecloaure, must hold the same franchises which, upon sale, would vest in the pur- chaser. The law authorized the mortgage of franchises, but to make the pledge of them subtantially available to the pledgee it was necessary that the law should do something more ; that it should provide some means by which, upon the pledge being enforced by aale, a corporation composed of the purchasera might be called into being for the enjoyment of those franchises. Ko provision whatever has been made for divest- ing the corporation mortgagor of its franchises and vesting them in the mortgagee, or in any other person or persons, except by, and not until after, a sale under the mortgage. Until that time, at least, the orig- inal corporation continues to exiat, and to be in possession of ita franchise to be a corporation, and it cannot be dissolved or extinguished except by legislative action, constitutionally taken, or by the judgment or decree of a court of competent jurisdiction, entered in pursuance of proceedings duly instituted to that end. Moreover, an examination of the Pennsyl- vania statutes, before referred to, shows that the corporation, for the existence and organization of which they provide, is to be a ne/uo corpora- tion ; Us franchise to exist is, therefore, derived from those statutes, and not from the charter of the original company, although from the lattei ��� �