Sec. 16-216. Issuance of bonds. Each railroad company may borrow money and
give its bonds therefor, signed by its president and countersigned by its treasurer, and
may dispose thereof as authorized by its stockholders. Any bonds issued by virtue of
the general authority conferred by this section shall, before being issued, be registered
in the office of the Comptroller, and a certificate of such registration shall appear on
each bond so issued. The Comptroller shall cancel any bonds so registered which are
brought to him for cancellation and enter a memorandum of such cancellation in his
register. No such company, by virtue of the general authority conferred by this section,
shall issue any bonds of a lesser denomination than one hundred dollars or have bonds,
issued under such authority and without other authority from the General Assembly,
outstanding at any one time to a greater amount than one-half the sum which its president,
treasurer and an engineer approved by the Department of Public Utility Control certify
under oath has been actually expended upon its railroad, and any false swearing in the
matter shall be deemed false statement under section 53a-157b. The Comptroller shall
not permit the bonds of any railroad company, issued under authority of this section,
registered in his office and uncancelled, to exceed the amount limited in this section. Sec. 16-217. Securing of bonds by mortgage. Any railroad company may secure
its lawfully issued bonds by a mortgage of its property, or any part thereof, by deed
executed by its president, under the corporate seal, to the Treasurer of the state and his
successors in office, or other trustee, in trust for the holders of such bonds. Such mortgage
shall be recorded in the office of the Secretary of the State and need not be recorded in
the records of towns within which the property so mortgaged is situated. Sec. 16-218. Property subsequently acquired covered by mortgage; foreclosure. When any railroad company has mortgaged, or mortgages, its railroad, pursuant
to law, to secure its bonds, and has included or includes in such mortgage all or any part
of its rolling stock, locomotives, cars and other personal property, and of its property,
whether real or personal, thereafter to be acquired by it for use upon such railroad, such
mortgage shall be deemed valid and effectual as respects all the property therein included
as aforesaid and may be foreclosed in the same manner as ordinary mortgages of real
estate; and the record thereof in the office of the Secretary of the State shall be sufficient
record and notice to protect the title under the mortgage, although such company remains
in possession of the mortgaged property. Sec. 16-219. Surrender of road to mortgage trustee. When any such company
has mortgaged its property or any part thereof to any person, in trust, for the security
of its creditors, or any class of them, and has made default in the payment of principal
or interest due such creditors, any such creditor may bring his complaint to the superior
court, for any judicial district in which such railroad or any part thereof is located, setting
forth such fact and claiming that such trustee may be placed in possession of such
property, for the benefit of such creditors. Such complaint shall be heard and determined
at the first session of the court to which it is returnable, unless continued for reasonable
cause; and, if the allegations therein are found true, such court shall decree that such
company and its president and directors, under a suitable penalty, shall surrender such
mortgaged property to the trustee, for the benefit of such creditors. Sec. 16-220. Liability of trustee limited. When any such trustee has taken possession of any property pursuant to the provisions of section 16-219, or pursuant to any
authority contained in the mortgage or deed of trust, he shall take charge of and operate
such railroad or railroad property for the benefit of the creditors for whom such trust
was created, and shall not be personally liable for any injury arising from the operation
of such road, unless resulting from his wilful mismanagement, or for any contracts made
by him as such trustee; but all such property shall be liable for the acts and proceedings
of such trustee, in the execution of his trust, to the extent of the interest of the creditors
for whose benefit he acts, and any proceeding for the purpose of making such property
liable shall be brought against such trustee, describing him as such. Sec. 16-221. Inventory. The trustee, upon taking possession of such property, shall
make, under oath, an inventory of all property which comes into his possession and
lodge it for record in the office of the Secretary of the State; and, if any other property
afterward is discovered by him, he shall make and lodge a like inventory. Sec. 16-222. Accounts. Trustee may complete foreclosure. The trustee, while
operating such road, shall file quarterly, in the office of the Secretary of the State, an
account of all moneys received or disbursed by him in the course of his agency; and
may proceed at his discretion, in the superior court for any judicial district in which
such railroad or any part thereof is located, to foreclose against such company and all
subsequent encumbrancers, for the benefit of the bondholders or other creditors for
whom he acts; and such court may limit the time for the redemption of the mortgaged
property, as in ordinary foreclosure proceedings. Sec. 16-223. Court may remove trustee and appoint successor. If such trustee
neglects or unnecessarily delays to perform his duties, any creditor represented by such
trustee may apply to the superior court for any judicial district in which such railroad
or any part thereof is located, for such trustee's removal. Such application shall be
privileged in the order of its trial, and, if the allegations therein set forth are found true,
such court may remove such trustee from his office and appoint another in his stead. Sec. 16-224. Prior encumbrancers not affected. Nothing in sections 16-219 to
16-223, inclusive, shall affect any mortgage, trust or lien upon the property foreclosed,
which was created prior to the mortgage, trust or lien, under which such trustee may
act; but the trustees for all such prior encumbrancers may proceed, by foreclosure or
otherwise, notwithstanding any act or proceedings by subsequent encumbrancers or
their trustees. Sec. 16-225. Trustee to have same powers as company. When any such railroad
is in the possession of a trustee, he shall have the same rights, powers and privileges as
are conferred upon railroad companies; and all expenses and damages incurred in good
faith by such trustee in possession, to improve the lines of the railroad so in his charge,
shall be reimbursed to him from the earnings of such railroad while he has the possession
thereof. Sec. 16-226. Administration expenses. The expenses of operating such railroad
or other property, including repairs and all other reasonable expenses of the trustee, and
any damages incurred for any injury sustained during the time of his execution of such
trust, and all claims secured by any prior mortgages or encumbrances which have become payable before or during said time, and also a reasonable compensation to be
allowed to the trustee by the Superior Court, shall be deducted from the earnings of the
road, before any part of such earnings is paid to the creditors. Sec. 16-227. Purchasers under foreclosure may reorganize corporation. Certificate. Whenever the property and franchises of any railroad company have been sold
pursuant to a judgment or decree of a court of competent jurisdiction, in a suit for the
enforcement of foreclosure of a mortgage on such railroad, the purchaser or purchasers
at such sale, or his or their grantees and their associates and successors, if they desire
to continue the operation of such railroad, shall, upon filing in the office of the Secretary
of the State the certificate herein provided for, be a corporation by the name designated
in such certificate, with power to hold, use, maintain and operate such railroad, with all
the powers enjoyed by railroad companies under the laws of this state. Such certificate
shall be signed, sealed and acknowledged by the persons who have acquired such property and franchises, or a majority of them, and shall set forth: (1) The name of the
corporation; (2) the names of such persons, not less than twenty-five in number, as have
associated themselves together for the organization of such corporation, and the names
of the persons who compose the first board of directors; (3) the amount of capital stock
and the number of shares into which the same is divided; (4) the owners of such shares
at the date of filing such certificate. The amount of such capital stock shall not exceed the
total value of the railroad together with its franchises, which value shall be determined by
the Department of Public Utility Control. The first board of directors shall adopt bylaws
relating to the management of the affairs of the corporation, which bylaws may be
amended by the stockholders.
(1949 Rev., S. 5627; 1971, P.A. 871, S. 91; P.A. 75-486, S. 1, 69; P.A. 77-614, S. 162, 610; P.A. 80-482, S. 98, 348;
P.A. 85-246, S. 13.)
History: 1971 act made false swearing a violation of provisions re false statement rather than perjury; P.A. 75-486
replaced public utilities commission with public utilities control authority; P.A. 77-614 replaced authority with division
of public utility control within the department of business regulation, effective January 1, 1979; P.A. 80-482 made division
of public utility control an independent department and deleted reference to abolished department of business regulation;
P.A. 85-246 deleted references to street railway companies.
Action does not lie on interest warrant annexed to bond, but not containing promise. 26 C. 120. Measure of damages
for nonpayment of principal of bonds held to be interest at rate fixed by contract. 29 C. 268.
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(1949 Rev., S. 5628; P.A. 85-246, S. 14.)
History: P.A. 85-246 deleted reference to street railway companies.
Mortgage of franchise sustained. 23 C. 435. General railroad mortgage held to cover office furniture; 46 C. 129; to
cover property acquired after date of mortgage; 46 C. 156; not to cover lands outside of layout, subsequently acquired and
not needed by company; but to cover lands purchased with company's funds, though title was in names of officers. 50 C.
150. Priorities as between supply and other unsecured creditors and mortgage bond holders. 76 C. 17; 101 C. 13; 108 C.
217. Effect of failure to record. 89 C. 59. Rights of bondholder after foreclosure and under reorganization agreement. 90
C. 34.
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(1949 Rev., S. 5629; P.A. 85-246, S. 15.)
History: P.A. 85-246 deleted references to street railway companies.
Held that railroad mortgage could only be foreclosed by state treasurer. 50 C. 159.
Cited. 28 CS 459.
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(1949 Rev., S. 5630; P.A. 78-280, S. 2, 127.)
History: P.A. 78-280 replaced "county" with "judicial district".
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(1949 Rev., S. 5631.)
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(1949 Rev., S. 5632.)
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(1949 Rev., S. 5633; P.A. 78-280, S. 2, 127.)
History: P.A. 78-280 replaced "county" with "judicial district".
Trustee represents all bondholders, and they need not be given personal notice of judicial proceedings. 53 C. 349.
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(1949 Rev., S. 5634; P.A. 78-280, S. 2, 127.)
History: P.A. 78-280 replaced "county" with "judicial district".
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(1949 Rev., S. 5635.)
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(1949 Rev., S. 5636.)
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(1949 Rev., S. 5637.)
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(1949 Rev., S. 5638; P.A. 75-486, S. 1, 69; P.A. 77-614, S. 162, 610; P.A. 80-482, S. 99, 348.)
History: P.A. 75-486 replaced public utilities commission with public utilities control authority; P.A. 77-614 replaced
public utilities control authority with division of public utility control within the department of business regulation, effective
January 1, 1979; P.A. 80-482 made division an independent department and deleted reference to abolished department of
business regulation.
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