Guaranty Trust Co. v. Metropolitan St. Ry. Co.
| Decision Date | 18 March 1909 |
| Citation | 168 F. 937 |
| Parties | GUARANTY TRUST CO. v. METROPOLITAN ST. RY. CO. |
| Court | U.S. District Court — Southern District of New York |
Davies Stone & Auerbach, for Guaranty Trust Co.
Brownson Winthrop, for Morton Trust Co.
J Parker Kirlin, for Metropolitan St. Ry. Co.
Masten & Nichols, for receivers of Metropolitan St. Ry. Co.
The elaborate provisions proposed as to inventory of the personal property are rejected, not because of the great labor involved in complying with them, but because they seem impracticable and unnecessary. In the operation of a large and complicated system like this, the items of personal property required for operation, repair, and construction are constantly fluctuating. At whatever time an inventory might be made, it would be found a few weeks later to inaccurately represent then existing conditions. Such an inventory is not necessary. The cars will be listed, described, and identified by numbers, and so will the larger units of machinery. The annual inventory and the books of the receivers will be open to bidders, who will also be given access to all power houses, shops, cars, and storage barns. Certainly no one will bid for this railroad property without the advice of skilled and experienced engineers, whose inspection of the property and what may be found on it, coupled with the list of cars etc., provided for in the decree, will give all the information needed for the exercise of an intelligent judgment.
The suggestion that the bidder should have some security against receivers disposing of material and supplies intermediate sale and delivery is not persuasive. The only disposition they can properly make of them is to put them into the road or its operation. If, for example, the supply of coal runs down during the period and is not replenished, the purchaser will not get as much coal as he saw when he made the survey but, per contra, there will not be an unpaid coal bill to that extent for him to assume the obligation of paying. If 500 tons of rails are taken from supplies and laid on the yokes, he will get them just the same as if they remained in storage.
As to the reservation of right to impose lien for unadjusted claims, etc. (see article 7 et al.): This method is adopted mainly in order to enable bondholders to make use of their bonds in bidding. It seems curious that they should be practically the sole objectors to these clauses, which do not undertake to settle priorities now, in advance of the testimony, but merely reserve those questions to be settled hereafter, while a fund to provide for payment is thus secured. There is nothing in these clauses to terrify a prospective bidder on any theory of uncertain future...
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Pennsylvania Steel Co. v. New York City Ry. Co.
...accounting from the income or the corpus. This court secured such repayment by directing a sale subject to lien therefor. 166 F. 569, and 168 F. 937. The Court of Appeals this decree by providing that the purchaser on foreclosure should pay $10,000,000 of his bid in cash. See 177 F. 925. If......
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Pennsylvania Steel Co. v. New York City R. Co.
...system and its prospective future as they appeared at that time, over two years ago, should be borne in mind. Reference to 166 F. 569, and 168 F. 937, show the various problems with which the Circuit Court struggled and the way in which it undertook to secure payment of all sorts of obligat......
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Morton Trust Co. v. Metropolitan St. Ry. Co.
...a clause in the decree of foreclosure and sale, such as will be found in the decree of March 18, 1909, in the Guaranty Trust Company suit. 168 F. 937. the terms of such a clause, a lien for the deficit would be imposed upon the whole property, and in the redemption of that property from suc......