Supreme Court,

NEW YORK COUNTY.

THE PEOPLE OF THE STATE OF NEW YORK,

Plaintiff,

against

THE ERIE RAILWAY COMPANY and others,

Defendants.

Opinion of JAMES C. SPENCER, Referee, upon the material facts stated in his Report in the above entitled action, bearing date October 31st, 1879.

By the order of reference under which I have acted, I was required to "take testimony for the purpose of ascertaining what property or assets, "if any, the said Hugh J. Jewett, as Receiver in this action, held, acquired " or disposed of, not covered by or subject to the lien of the mortgage of "the Erie Railway Company to the Farmers' Loan and Trust Company, "which has been foreclosed, and if any such property has been disposed "of by said Receiver, what disposition has been made thereof, and also "what rights and equities, if any, the said Farmers' Loan and Trust Com"pany, the purchasers at the foreclosure sale of the mortgaged premises, "or their assigns, had or have in or to such property or assets, or any part "or portion thereof, and that the said Referee report to this Court the

"testimony so taken by him, and the material facts which he shall deem "established by such testimony, with his opinion thereon, for the further "action of this Court."

The inquiry thus imposed upon me has brought in question a great amount and variety of property, and has led to the taking of very voluminous testimony.

The analyzing and digesting of so much matter has been a difficult and laborious task, covering a long period of time, and requiring careful examination and conscientious thought. And when once analyzed and digested the labor was not done: difficult and important questions of law then arose, which had to be passed upon in order to arrive at the conclusions called for by the order of reference. Having found the material facts which I deem established by the evidence, it now remains for me, in closing my labors, to submit my opinion upon those facts.

First in order, for my consideration, comes the direction of the Court that I "shall take testimony for the purpose of ascertaining what property "or assets, if any, the said Hugh J. Jewett, as Receiver in this action, ac"quired, held, or disposed of, not covered by or subject to the lien of the

mortgage of the Erie Railway Company to the Farmers' Loan and Trust "Company." This renders it necessary to ascertain what property was "covered by or subject to the lien of the mortgage" in question. This being ascertained, if there was other property, that property, of course, was "not covered by or subject to the lien of the said mortgage,” and that is the property sought to be ascertained by the reference.

The determination of this question depends upon the language of the description in the mortgage, and what intent is to be deduced from it. I will take up the description separately with reference to each class of property which is brought in question.

And, first, touching the leased roads. The description begins by naming the original main line of railway from Piermont on the Hudson to Lake Erie. At two or three points this line, for short distances, runs a little

over the border into Pennsylvania. But it is all described by itself as an entirety, and is no more referred to. Then certain branches in the State of New York which had been originally constructed by the Erie Railway Company, and were held as absolutely as the main line, are described. After this follows the clause, "and also all other railways belonging to "the party of the first part in the States of New York, Pennsylvania, and "New Jersey, or any of them." Then, after describing, in general and comprehensive terms, in the language usually employed to embrace railway properties, real and personal, it concludes as follows: "Also all the

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estate, right, title, and interest, terms and remainder of terms, franchises, privileges, and rights of action, of whatsoever nature, in law or in equity, "conveyed or assigned unto the New York and Erie Railroad Company, or unto the Erie Railway Company, by the Union Railroad Company, or by the Buffalo, New York and Erie Railroad Company, by the Buffalo, "Bradford and Pittsburgh Railroad Company, by the Rochester and Gen"esee Valley Railroad Company, and by the Long Dock Company," one of which railroads was in New Jersey, one in Pennsylvania, and two were in New York. In this connection it should be stated, as a material fact in giving interpretation to the above portions of the description, that every piece of railroad which the Erie Railway Company had in its possession, aud under its control, in New Jersey and Pennsylvania—and it had four in the former State and three in the latter-it held under lease, and every piece of railroad which it bad in the State of New York, other than leased roads, had been previously described in the clause immediately following the description of the main line, but no leased road was specifically named till the insertion of that clause lastly above cited.

What then is the effect of the clause, "and also all other railways be"longing to the party of the first part in the States of New York, Penn"sylvania, and New Jersey, or any of them"? It must have a meaning. The rule of construction is, to give effect to every part of a deed when this is possible, and every word must be made to operate in some shape or

other (Broom's Leg. Max., 6th Am. Ed., 400). The Erie Railway Company had not, at the time, a solitary piece of railroad in either of the three States named, not previously expressly described, which was not leased road. Then this is a declaration in the instrument itself, that the Erie Railway Company regarded all the leased roads as "belonging" to it, and intended to embrace them in the mortgage. To hold otherwise would render the clause wholly nugatory, and this would be contrary to the settled canons of construction. The construction must be such as will preserve rather than destroy, (Broom's Leg. Max., as above). Why insert that clause if not intended to operate? It must have had a purpose and a meaning. An instrument of such importance, affecting such vast interests, must have been drawn with care and deliberation, and “futile dal"liance" in the use of language cannot be presumed. This language gives the estimate and understanding of the mortgagor itself, of its relation to the railways in its possession, and in the character thus fixed, it mortgages all the leased roads.

And the leased roads did belong to the Erie Railway Company. Most, if not all, the leases were for the whole duration of the charters of the companies granting the leases, and in addition, in nearly every instance, the Erie Railway Company held the whole, or nearly that, of the capital stock of such companies; so it not only owned the companies, but was entitled to the possession and use of the roads for as long a time as they could last and be operated as railroads under the charters authorizing their construction. To every practical intent and purpose, therefore, they belonged to the Erie Railway Company.

In popular understanding, and by reasonable intendment, it is not necessary for a party to have the fee of lands to entitle him to say that they belong to him. If he have only a freehold interest, less than a fee, or a lease for years, the lands belong to him during the life or lives upon which the duration of the freehold depends or the time for which they are leased. And this language would be fully warranted, without qualifica