§386. Foreclosure of mortgages; powers and rights of purchasers

Whenever any railroad company, incorporated under the laws of this state or any other state, mortgages its franchise, roadbed, superstructure, and other property, and the mortgage is foreclosed in a court of this state or in a federal court, the purchaser at the foreclosure sale has the same right to operate the railroads as the mortgagee company. The purchaser also has the same rights, franchises, privileges, and immunities pertaining to the property or franchises as the mortgagee company had by virtue of its articles of incorporation or any law of this state.

However, the purchaser shall not have such rights to operate nor any of the rights, franchises, privileges, and immunities pertaining to the property or franchises, unless the purchaser agrees to take and hold such property and franchises subject to the payment of all subsisting liabilities and claims for labor, supplies, and materials furnished in the construction, maintenance, and repair of the railroad and appurtenances covered by the mortgage, if such claims and liabilities accrued within two years prior to the beginning of the receivership resulting in the sale of the property and franchises, or within two years prior to the sale, if the property and franchises are not sold under receivership proceedings. But, if suit is pending on these claims and liabilities when the receiver was appointed or the sale made, the claims and liabilities upon which suits were pending are protected as though accruing within two years.

Such agreement by the purchaser shall be evidenced by an instrument in writing, signed and acknowledged by the purchaser and associates, if any, and the company organized by them, and filed in the office of the Secretary of State.