Hoyle v. Plattsburgh & M. Railroad Company

New York Court of Appeals · 1873 · Corporations

54 N.Y. 314 (1873)

Updated August 22, 2026

Corporationsrailroad rolling stockfixturespersonal propertyreal propertychattel mortgage filingafter-acquired propertyconstructive annexation

Facts

The case involved two mortgages covering a railroad company's property, including rolling stock specifically named in the instruments, while possession remained with the railroad company. The plaintiffs claimed rights under those mortgages without filing them as chattel mortgages under the 1833 statute. Vilas, a director of the railroad company during the relevant period, also held a judgment against the company and purchased corporate property sold on execution. The dispute turned on whether the rolling stock was part of the realty, whether filing was required, and whether the plaintiffs could attack Vilas's purchase.

Issue

Is railroad rolling stock to be treated as part of the realty or as personal property, and if it is personal property, must a mortgage on it be filed under the 1833 chattel mortgage statute when possession is not delivered? Also, can mortgagees invoke the corporation's right to disaffirm a director's purchase of corporate property sold on execution without first satisfying the executions?

Rule

Things originally personal remain personal unless the law recognizes annexation sufficient to make them part of the realty; even where actual annexation exists, the relevant considerations are actual annexation, applicability to the use of the realty, and an intention to make a permanent accession to the freehold. Railroad rolling stock lacks the controlling element of localization in use and therefore does not become part of the realty. Because rolling stock is personal property, a mortgage of it with no change of possession falls within the universal requirement of the 1833 chattel mortgage filing statute. A director's position is fiduciary throughout his directorship, and he may not purchase corporate property for his own benefit free from the corporation's right to disaffirm; however, a mortgagee can claim through that equitable right only after the executions are satisfied.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Granite Valley Rail Line, a fictional railroad company headquartered in Albany, grants First Harbor Lending a mortgage on its rail corridor, depots, and specifically listed locomotives and freight cars. The trains remain in the company's possession and operate daily between Albany and Syracuse.

In a later dispute with a judgment creditor, which characterization of the locomotives and freight cars is most consistent with the governing rule?

Explanation. Things originally personal remain personal unless the law recognizes annexation sufficient to make them part of the realty. The majority treated rolling stock as personal property because it lacks annexation and, most importantly, localization in use. Its usefulness to railroad operations is not enough by itself to convert it into realty. (Derived from Hoyle v. Plattsburgh & M. Railroad Company (1873).)