The complaint herein was demurred to by the Sacramento and Plaeerville E. Co., on the grounds thus stated by the pleader:

The validity of the written security on which the action is brought, as well as of the bonds mentioned in the complaint, to secure which the security was executed, is by the demurrer attacked.

The security in question was executed in 1864 by the Placer-ville and S. V. E. Co., to secure the payment of certain bonds therein mentioned; and it is contended that it is invalid, because not authorized by the unanimous concurrence of the directors of the corporation above named.

To sustain this contention, we are referred to section 15 of *609 the act of 1861, concerning the incorporation of railroad companies (Stats. 1861, 607), as amended by section 1 of the act of May 14, 1862. (Stats. 1862, 547.) This section, as amended, is as follows:

Attention is also called to the following recitals in the instrument or security:

It is afterwards recited that the bonds were ordered to be issued in conformity with the premises, and for the sole purpose aforesaid—manifestly referring to the recitals above given. This security was made a part of the complaint.

The section (fifteen) relied on evidently confers by its first clause, ending with the words “ at a rate of interest not exceeding ten per cent, per annum,” a different and distinct power from the clause just succeeding.

The first clause confers the power “ to borrow, from time to time, on the credit of the corporation, and under such regulations and restrictions as the directors thereof, by unanimous concurrence, may impose, such sums of money as they may deem necessary, for constructing and completing their railroad, and to issue and dispose of bonds or promissory notes therefor,” etc. The second clause has its antecedent, the words, “ such company shall have power,” with which the first clause commences, and which is also its antecedent; and the words “ and also to issue bonds or promissory notes, of the denomination aforesaid, and at the rate of interest aforesaid, in payment of any debts or contracts for constructing and completing their road, with its equipments, and all else relative thereto,” are qualified by such initial words; so that this last clause is substantially, such company shall have the power also to issue bonds or promissory notes, etc. Here, it is plain to see, is a power given to issue bonds or promissory notes, under like pro *611 visions as to denomination and interest as in the first clause, “in payment of any debts or contracts for constructing and completing their road, with its equipments, and all else relative thereto ”—a power differing and distinct from the other, as will be evident on a careful reading. The power first given in the section is to borrow money for a purpose designated; the one secondly given is to make bonds or promissory notes, and issue them in payment of debts or contracts for constructing and completing the road. The power to mortgage the corporate property and franchise to secure the payment of such bonds or notes, given in the proviso following the second clause, applies alike to the notes and bonds referred to in the first clause, and is common to the bonds and notes issued under either power.

Powers are conferred by the ninth section of the act of 1861 (Stats. 1861, 611), and by this section as ^mended in 1863, (Stats. 1863, 610), on the directors, to manage the affairs of the company, make and execute contracts of whatsoever nature or kind, fully and completely to carry out the objects and purposes of the corporation, in such way and manner as they may think proper, and to exercise generally the corporate powers of such company. These powers are given to boards of directors, and are usually exercised by a quorum, which, unless changed by statute or by-law, is a majority of the board. The above powers could be exercised by a majority of a quorum under the ninth section, unless restrained as above pointed out.

In construing any words apparently restricting and limiting the powers thus conferred, which are broad enough to include the power to borrow money, the restricting and limiting words certainly ought not to be invested with a meaning beyond their import. The two clauses of the fifteenth section ought not to be held restrictive beyond their plain and obvious meaning, especially when we find such broad and ample powers conferred on the directors. We find no words in this or any other act restraining the board of directors from ordering, by a majority vote, the issuance of such bonds as are in controversy herein, which were issued to pay for the iron used in laying the track.

We perceive no violation of the statute in the board of directors, by a majority vote ordering the issuance of bonds to pay debts contracted, or contracts made for iron for constructing *612 and completing the road of the corporation. Indeed, at common law, a corporation has power to issue a bond or note to pay a debt. (Com. v. Smith, 10 Allen, 448 ; Commissioners of Craven v. Atlantic and N. C. R. Co., 77 N, C. 289; Miller v. N. 7. and Erie R. Co., 13 How. N. Y. 374 ; 8 Abb. Pr. 431 ; Dana v. Bank of U. S., 5 W. & S., 223.) We do not see why it has not just as much right to do so, under the general law of this state, as a natural person. Nothing more than this was done in the case before us.

The power to make a mortgage, to secure the payment of such bonds as was done herein, is too clear to admit of dispute.

Some question is made as to the nature of the instrument sued on. We think it a mortgage, executed and issued in the usual mode and form of railroad mortgages. (See Jones on E. E. Mortgages, § 68, and citations; 2 Jones on Mortgages, §§ 1764-1771; Opinion of Hives, J., in Taylor v. Stearns, 18 Gratt., 244 -278.) But it is immaterial, in our judgment, what the security is called. Though executed to trustees, and in form a conveyance in trust, it is to all intents a mortgage— in essence a mortgage, taking the form usual with such securities executed by railroad corporations. From an apparent necessity, and for the convenience of those interested, the security takes the form of a trust deed, and thus becomes a contract between the corporation and the persons who may become holders of the bonds secured by it, who are entitled to the same benefit they would have if actually made parties to the instrument.

The same questions and some others are substantially raised by the demurrer of the defendant, the Placerville and Sacramento Valley H. E. Co. We have examined these questions, and find none of them tenable.

In our judgment, the bonds and mortgage are valid securities, and the demurrers were properly overruled.

The mortgage security herein was executed to Danforth N. Barney, of New York, and the plaintiff, Louis McLane, as trustees for those who might become the holders of the bonds mentioned in it, among which are those set forth in the complaint. The rights and property transferred by this security were conveyed to the aforenamed as trustees, and the survivor of them. These trustees, or the survivor of them, were empow *613 ■ered after default was made in the payment of the principal of the bonds, or any part thereof, or when default should be made for a whole year in the payment of interest on any of such bonds, peaceably and quietly to have, hold, occupy, possess and enjoy all and singular the rights, privileges, franchise, property and other premises granted, described in the mortgage, without let, suit or hindrance, molestation or eviction of the mortgagors, their successors, or of any persons claiming or to claim by, from, or under them; and may by themselves, their officers or agents, take, receive and collect the income and profits of the railroad of the company mortgagor, first applying the same to the payment and discharge of all current expenses of such railroad, and the needful repairs thereon, and next to the payment of all taxes, and then to the payment of the interest and principal of such bonds, in such manner as they may deem proper. After this follows, in the mortgage, a covenant on the part of the mortgagor, and its successors, and all and every person claiming by, from, or under them the premises, or any part or parcel thereof, after such default to the amount aforesaid,” to “ make, do and execute all and every such further and other lawful and reasonable act and acts, thing and things, assurance and assurances, device or devices, in the law whatsoever, for the further and better granting and assuring all and singular the said premises, with the appurtenances, above bargained and sold, mentioned, or intended to be, unto the said parties of the second part, and the survivor of them, and the heirs of such survivor, or their assigns, by their or his counsel, learned in the law, shall be reasonably devised, advised, or required,” with a further covenant that the premises conveyed are free and clear of all former grants, trusts, judgments, uses, taxes, etc., and also a covenant by the same party, warranting the title of the rights and premises conveyed, against all persons claiming under the mortgagor.

The default of the company mortgagor for one year in the payment of interest on the bonds in controversy having occurred, the action was brought by the plaintiff, as surviving trustee (Barney, the co-trustee, having died), to enforce inter alia the stipulations of the trust mortgage as to taking possession, and to authorize him, as such trustee, to take actual possession of *614 the road and other property mortgaged, and for the appointment of a receiver to take such possession, if the court should be of opinion that such officer should be appointed, instead of allowing the plaintiff to have possession. On motion made after hearing, an order was made, authorizing the plaintiff, who was appointed receiver, to take possession as prayed for.

It was recited in the order of appointment, that it appears to the court that the plaintiff is entitled to the possession of the property mortgaged, under the terms and conditions of such trust mortgage, or deed, and that to enable him more effectually to carry out and complete the trust delegated to him by said, mortgage, he should be appointed receiver of the said property, with full power to take and retain possession of the same.

The order proceeds as follows: “Therefore, it is ordered jjtat-'the said plaintiff, as surviving trustee (and as receiver, to which position he is hereby appointed for that purpose), take possession of all said property, and keep the same, and exercise the powers over said property conferred by said trust mortgage, or deed, until the further order of the court, unless the defendant, within fifty days after the service on its respective agents or attorneys of a copy of this order, pay to the said plaintiffs the amount due on the unpaid bonds and coupons issued and secured by said trust mortgage or deed; and it is further ordered that the said Louis McLane, plaintiff, execute in this court a bond, with two sufficient sureties, in the sum of $10,000, conditioned for the faithful performance of his duties as such receiver.”

if It appears further that the receiver subsequently filed a bond I as directed, and took possession of the road and property mort- ! gaged.

i This order is attacked as erroneous and unauthorized, by the appellant’s counsel, and various questions in regard to it are-discussed in his brief.

i It is urged that the question is not before us. But having | examined the question, we are clear in the opinion that the jj court committed no error in making this oreler. In deciding-¡.this question, we are not to be considered as holding that it is ? regularly before us. Entertaining some doubt whether it can jj be reviewed in this case on an appeal, still, from the nature of *615 the judgment entered herein, we think it best to examine the matter as we have, since we entertain no doubt, as above stated, on the points discussed in regard to it.

It is contended on behalf of the appellants, that the court erred in appointing the trustee receiver, and in putting him as such trustee and receiver in the possession of the property— first, because a plaintiff in a foreclosure suit is not entitled to a receiver, unless it appears that the mortgaged property is in danger of being lost, removed, or materially injured, or is insufficient to discharge the mortgage debt. Second, because the property, as it appears from the face of the complaint, was insufficient to discharge the mortgage debt. Third, because, in no event, was the plaintiff entitled to be put in possession of the mortgaged property pendente lite; and to sustain this last ground, section 744 C. C. P. is cited.

In reply, we have to say that this action is not one to fore-r close a^mortgage. It is a suit brought to enforce the specific execution of the terms and stipulations of a mortgaged by which,! on the happening of a specific event, the trustees or the surviv- or of them are entitled to take possession of the property mortgaged, hold it, receive and collect the income and profits arising from it, and apply such income and profits as are stated above. The casus foederis, upon which the surviving trustee was to take possession, having occurred, on his application the court made the order. This is so clearly within the province of a court of equity, that we can see no reason to doubt its power, or the regularity of the proceeding. It comes within the provisions of section 564, subdivision 6, of the Code of Civil Procedure, authorizing such appointments, where receivers have heretofore been appointed by the usages of courts of equity. There are several cases where such a proceeding has been had, which have been sanctioned and approved by courts of the most undoubted learning and ability. (See Shepley v. The Atlantic & St. Lawrence and G. T. R. Co., 55 Me. 395 ; Shaw v. Norfolk County R. Co., 5 Gray, 162; American Bridge Company v. Heidelbach, 94 U. S. 798 ; Gilman v. Ill. Tel. Co., 2 Bland, 665 .)

We quote here, as showing the ground on which such proceeding rests, the observations of the court, per Walton, J., in the case above cited from 55 Maine :

The questions under consideration were substantially decided by this court adversely to the contention of appellant’s counsel, in S. & P. R. Co. v. Superior Court of S. F., 55 Cal. 453 , which decision we approve as correct.

The subsequent orders made in the cause in relation to the trustee and receiver are, in our judgment, within the power of the court below, and without error. No facts appear in the cause in any way which show error. They are stringent, and in their very essence must be so. The appointment of a receiver is an equitable remedy, and has been said to be in effect an equitable execution. (Jeremy’s Eq. Jur. 249.) The remedy is a provisional one, and bears a similar relation to courts of equity that proceedings in attachment bear to courts of law. (See Cincinnati S. & C. R. Co. v. Sloan, 31 Ohio St. 1 .) The taking possession of the property of another is a seemingly h.arsh proceeding, but justified by the circumstances which demand its adoption, either arising from contract or the general rules of law. But the court which adopts this procedure is and should be careful to protect the interests of all concerned, and indemnity for all damage which the adverse party suffers is usually provided against by a bond with ample and sufficient sureties.

Under these orders the plaintiff trustee, as receiver, took possession of the road.

*617 On the 14th of April, 1881, the court made the following order :

We are of opinion that the court had power to authorize the trustee and receiver to make provision for operating the road, so as to secure an income and profits. The powers conferred on the trustees by the mortgage authorized them, on the default in the payment of interest mentioned above, to take possession of the road and operate it, using the income and profits therefrom to make the payments above mentioned. This much is conceded by the counsel for appellant in his brief. It appears that the mortgagor company had no rolling stock or other equipments, and that the trustee and receiver under the foregoing order of the court did purchase some rolling stock and machinery for the use of the road, for which he expended money in the discharge of his trust, and incurred some indebtedness. The facts are set forth as follows in the findings :

The court also found other facts as follows :

The conclusions of law reached by the court were as follows :

A decree was made in accordance with the foregoing decision. The following is the decree:

It is objected that the expenditures of the trustee and receiver mentioned in the findings and decree, are not a lien upon the roád and property conveyed. If the expenses were reasonably incurred in the discharge of the trust, we see no reason why they should not be a lien. Trustees are entitled to a lien on the corpus of the trust property, for all such disbursements. The law on this subject is so clearly laid down in Renssalaer & Saratoga R. Co. v. Miller, 47 Vt. 152 , that we insert here what is said in that case on the point:

That the receiver should have been allowed reasonable fees for counsel employed by him to aid him in the proper discharge of his j trust, wehave no doubt. (Cowdrey v. Galveston, H. & H. R. Co. , 93 U. S. 352 ; S. C., 9 Am. Rail. Rep. 861.) That he should! be allowed costs of litigation, is equally clear. (Jones on E. E.,/ § 1547, and cases cited.) Expenses in taking care of, pro-} tecting, and repairing the property in the receiver’s charge,} should also be allowed. This is so well established by decided cases, that we consider it only necessary to cite some of themj (Meyer v. Johnston, 53 Ala. 237 -346 ; Hoover v. Montclair & *624 Greenwood Lake Ry. Co., 9 N. J. Eg. 4; Kennedy v. St. Paul & Pac. R. Co., 2 Dill. 448 ; Stanton v. Ala. & Chat. R. Co., 2 Woods, 506 ; Vermont & Can. R. Co. v. Vermont Cent. R. Co., 14 Am. Rail. Rep. 497, 546,532.) Money expended in rolling stock and machinery has in some cases been allowed. (Stanton v. Ala. & Ch. R. Co., 2 Woods, supra ; Meyers v. Johnston, supra.) The circumstances under which this allowance was made do not appear in the findings. Nor do the circumstances under which many- of those allowances were made appear. We must therefore presume that they are properly allowed. Error must appear; it cannot be presumed or conjectured. On the contrary, every intendment is in favor of the regularity and correctness of the ruling of the court below, it having jurisdiction of the subject-matter and parties. This court must start out in investigating error alleged, with the above intendment as a postulate, and the record must by its contents displace such intendment.

These facts do appear in. the bill of exceptions. It was admitted :

It thus appears that the mortgagor company never had any rolling stock. The road laid with the iron purchased with the bonds of the mortgagor, some of which are involved in this action, was operated at the time this action was commenced by the defendant, Sacramento and Placerville Company. The rolling stock used was owned by this corporation. This corporation and the other corporations above mentioned, and the individuals Stanford, Hopkins, and Huntington claiming under it, were all purchasers of the road of the mortgagor, with full *627 notice of the mortgage securing the bonds owned and held by Kittle. . The mortgagor defendant having no rolling stock, and, as is apparent, the defendant Sacramento and Placerville Eailroad Company having withdrawn its rolling stock from the road, the receiver and trustee could not operate the line without making some arrangements by which rolling stock could be procured. Nothing appearing to the contrary, we must presume that every effort had been made by the receiver to procure such stock before the purchase was made, and this purchase, when it was made, was authorized by the court below. The receiver being authorized by the stipulations of the mortgage to take possession and operate the road, he certainly was entitled to use all necessary and proper means to enable him to do so. And we cannot, under these circumstances, conclude that the court below went astray, in allowing the purchase of rolling stock. On this point, what was said by the Supreme Court of Alabama, in Meyer v. Johnston, 53 Ala. 348 , per Manning, J., is to the point:

In Stanton v. Ala. & Chatt. R. Co., 2 Woods, 586 , in which a bill having been filed for the foreclosure and sale under a mortgage of the road and other property of the defendant railroad company, the court appointed receivers to take possession and control of the mortgaged property. Before the suit was begun, trains had been running on the road from one terminus to another ; but a portion of the road had been built in a hasty and temporary manner, and needed to be completed in a substantial and permanent way, in order to insure the safety of trains. The court made an order authorizing the receiver “ to put said railroad and the other property in repair, and to complete any uncompleted portions thereof; to procure rolling stock, machinery and other necessary things for operating the same, and to operate the same to the best advantage,” and save and preserve the same for the benefit of the first mortgage bondholders and others having liens thereon. By the same order, the receivers were empowered to borrow or advance moneys, not exceeding $1,200,000, which were to be a first lien upon the mortgaged property prior to all others, and to be paid before the first mortgage bonds. They were also authorized to issue certificates for the money so raised for the purposes above mentioned, payable within a certain time, with interest payable semi-annually at a rate not exceeding 8 per cent, per annum. Other provisions were made as to the sale or disposition of the certificates, and directions were given as to their being countersigned by a majority of the trustees of the first mortgage bondholders. Under this order the receiver went into possession of *629 the road, managed it, and issued and disposed of nearly all the certificates authorized by the foregoing order.

In Kennedy v. St. Paul & Pac. R. Co., 2 Dill. 448 , where it was necessary to complete a road by a certain date, to secure a land grant which was a material part of the security to the bondholders, Dillon, Judge, authorized a receiver to borrow money and complete the road within the time limited. In this case, authority was given to the receiver to borrow not less than five millions of dollars. See also Jerome v. McCarter, 94 U. S. 734 , where substantially the same thing was done to complete a canal, to secure a land grant.

We think the court did not err in the part of its decree above referred to. And as those expenses were incurred by the trustee and receiver under the direction of the court, in order to render the security effective under the mortgage to the bondholders, from whom no objection comes, we discover no error in the decree giving a lien for those costs and expenses prior to the lien of the bondholders.

The question as to the authority of the court to order a sale of the mortgaged property is also discussed, and it is contended that such portion of the decree is manifestly erroneous. The objection in this case does not come from the mortgagor defendant, but from one holding by purchase under a decree of foreclosure and sale of the property mortgaged, by a security subsequent and subordinate to the trust mortgage under which plaintiff has proceeded. The defendant mortgagor does not appeal, or object to the decree in any way.

It is said that the action is not brought for a sale of the mortgaged premises—that the mortgage does not provide for a sale on default in paying the interest for one year (the default on which this proceeding was instituted), and that the principal of the bonds has not as yet become due.

As to the first objection, the prayer of the complaint is broad enough to authorize a sale, if one should be necessary; and further, if in the progress of the action events should occur which would authorize the court to order a sale, such order could be made on the application of any party whose interest calls for such action on the part of the court.

What is said of the terms of the mortgage is correct. Do *630 sale is authorized on the default for interest, and the bonds have not yet matured. Still, is there not a necessity for a sale ? The mortgagor is insolvent, the other defendant purchaser of the road will do nothing to discharge the interest, and it appears if the road is operated at all by the trustee, it must be run at a loss. The trustee has no funds to repair the road with, and the road, if unused, must and will decay. The operation of the road must be at a loss. Nothing will be realized to pay the interest as jt matures,or the bonds when their principal falls due, as the security is becoming less every day. It would seem from this that the only resort to secure anything for the bondholders is by a sale. The trustee having taken possession, is authorized to retain it until the interest and principal have been paid. ( Wood v. Goodwin, 49 Me. 260 .) Under these circumstances, we think an urgent necessity has arisen for a sale ; such a necessity as will authorize a court of equity to order it. This was done in Ford v. Grane, 1 Hopkins’ Chan. 120. This was a suit to adjust the rights of parties to a steamboat, and for an account. A person was appointed receiver of all moneys due or to become due from the earnings of the boat; and under the direction of the receiver, the boat had been navigated for two years; a petition was thereupon presented to the court on behalf of the complainants, stating that the receiver’s accounts had been settled by a master; that the boat was found to be in arrears to the receiver, and that she could not, under existing circumstances, be so employed as to be more profitable for the future than she had been for the past years ; that large disbursements would be necessary to fit her out for another season; and praying that the boat might, be sold. The application was argued by counsel for the parties, and the court made the order directing the sale. The report of the case states as follows:

So, in case of an elegit extended by a creditor on a moiety of the lands of the judgment debtor at law, the creditor must wait until he can be paid the amount of his judgment out of the rents and profits of the moiety extended. Where, however, the payment of the judgment cannot be attained at all by a mere application of the rents and profits fas where the interest on the judgment exceeds the annual rents and profits), or where the payment of the judgment cannot be had out of such rents and profits within a reasonable time, courts of equity will accelerate the payment by decreeing a sale of the moiety of the lands, “ for,” as is said by Judge Story (see 2 Story’s Eq. Jur., § 1216 a), “ it would be a gross injustice to the judgment creditor to compel him to wait for satisfaction of his debt out of the assets of his debtor for an unreasonable length of time, when he had a clear lien on the property for the full amount.” (See Staleman v. Ashdown, Ambler, 13; S. C., 2 Atk. 477, 608; Burton v. Smith, 13 Pet. 464 ; O’ Gorman v. Comyn, 2 Sch. & Left. 137, 150; Tennent’s Heirs v. Patton, 6 Leigh, 196 .) “ For the same reason,” says the same author just quoted, “ courts of equity will accelerate payment by directing a sale, where the real estate bound by the judgment is a mere dry reversion; for in such a case there must, or at least there may, unavoidably be a long delay before the party can be paid out of the rents and profits.” (2 Story’s Eq. Jur., § 1216 a, and cases cited.)

We think the principle on which the cases above referred to are decided applies to the case before us, and that the court was authorized by the surrounding circumstances in ordering the sale. The parties with liens here should not be compelled to wait while the property, entirely unproductive, is going to destruction. It is for the interest of both parties that there should be a sale, and the matter determined. The fact that the defendant, who was operating the road, is able to continue to do so if allowed, *632 is of no weight on this point, when it is considered that it stands apart, and refuses to do anything to relieve the property bound by the lien and mortgage, of all the terms and conditions of which it had full knowledge when it became the purchaser. This conduct on the part of the defendant lends greater force to the circumstances authorizing and demanding a sale.

We wish to add here: The point is made by the appellant’s counsel that John Gr. Kittle, the holder of the bonds in controversy, is not a bona fide holder thereof, because he took them after they were due. The counsel is mistaken in this assumption. The bonds are not due until 1894. They so appear on their face, and by the recitals of the mortgage. It is found by the court and admitted by the defendants (as stated in the bill of exceptions), that Kittle was a purchaser of these bonds in good faith and for their market value, but after some of the coupons on each of the bonds were past due and unpaid. He was then a bona fide holder.

Further, as far as concerns the only appellant, the Sacramento and Placerville R. Co., Kittle having purchased these bonds, which are valid, secured by a valid mortgage, we cannot see that the appellant can avail itself of such defense. However Kittle derived his title, it is good against the defendant.

We find no error in the record, and the judgment is affirmed.

McKinstry, J., Sharpstein, J., Morrison,C. J.,and Myrick, J., concurred.

Rehearing denied.