Brooklyn City Railroad v. Kings County Trust Co.

Headnote

Corporations — railroads — mortgage — provision in mortgage to secure bonds that real estate not necessary to railroad may be released from lien of mortgage provided other property equal in value has been acquired — railroad may require release upon showing land not necessary and that it had acquired additional personal property equal in value — not necessary to show acquisition of other real property.

Brooklyn City R. R. Co. v. Kings Co. Trust Co., 214 App. Div. 506 , affirmed.

Appeal from a judgment of the Appellate Division of the Supreme Court in the second judicial department, entered December 2, 1925, in favor of plaintiff upon the submission of a controversy on an agreed statement of facts pursuant to section 546 of the Civil Practice Act. Plaintiff, to secure its bonds, had executed to defendant a mortgage covering all. of its property which contained the following clause: “Article 4. The said trustee shall, upon the written request of the party of the first part, release from the lien of this mortgage to the party of the first part, or to the persons or corporations designated by it, any real estate and the buildings and improvements thereon, when the use of the real estate to be released shall not be necessary to the maintenance ■ or operation of said railroad or the exercise of said franchises, provided that property equal in value to that which said trustee shall be requested to release shall have been acquired by the party of the first part and made subject to this mortgage as herein provided.” Plaintiff desiring to sell a parcel of land covered by the mortgage has requested that defendant release said parcel from the hen, it being conceded that the premises in question are not necessary to the operation of the railroad or the exercise of its franchises, and that plaintiff has acquired since the execution of the mortgage other personal property appraised at many times the value of the land in question. Defendant contends that it is not empowered to release real property under the

provision quoted unless plaintiff has acquired other real property of equal value to that sought to be released.