81 F. 425 (W.D.Va. 1896), M.A. Furbush & Son Mach. Co. v. Liberty Woolen Mills

Citation:81 F. 425
Party Name:M. A. FURBUSH & SON MACH. CO. et al. v. LIBERTY WOOLEN MILLS et al.
Case Date:August 27, 1896
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
FREE EXCERPT

Page 425

81 F. 425 (W.D.Va. 1896)

M. A. FURBUSH & SON MACH. CO. et al.

v.

LIBERTY WOOLEN MILLS et al.

United States Circuit Court, W.D. Virginia.

August 27, 1896

S. V. Southall, for complainants.

M. P. Burks, for defendants.

PAUL, District Judge.

The Liberty Woolen Mills, a company incorporated under the laws of the state of Virginia, and a citizen of the state of Virginia, and having its principal office at Bedford City (formerly Liberty), within the Western district of Virginia, purchased of M. A. Furbush & Son, citizens of Philadelphia, in the state of Pennsylvania, certain machinery, fixtures, and supplies, for which the said company was indebted to said M. A. Furbush & Son in the sum of $14,813.77, as of the-- day of June, 1884. To secure the payment of this debt, the company executed a deed of trust on all the said machinery, fixtures, and supplies which it had purchased of M. A. Furbush & Son in which deed it was provided that the title to the said machinery, etc., should remain in said M. A. Furbush & Son until all the purchase price thereof, interest, and insurance premiums had

Page 426

been fully paid. Appended to the deed is a list of the machinery, etc., referred to. This deed of trust was duly recorded in accordance with the registry laws of Virginia, and bears date the 25th day of June, 1884. On the 1st day of June, 1885, the company executed coupon bonds to the amount of $10,000; and to secure the payment of the same, and of the coupons thereto attached, executed a mortgage on all its property, including its real estate situate in the town of Liberty (now Bedford City), the same being a lot of land containing 123 acres, together with the mill building, engine house, and all other improvements thereon, and machinery, tools, implements, furniture, and fixtures therein situated, acquired and to be acquired; also all personal property of said company of every kind and description, particularly all material for the product of said mills, whether raw wool or wool in the course of being manufactured, and all manufactured goods now in stock or hereafter produced. S. Griffin and M. P. Burks were made trustees in this deed, and the same was duly recorded, in accordance with the registry laws of Virginia, on June 11, 1885. Of the $10,000 of coupon bonds so executed and secured, $4,400 were issued to and taken by, and are now held by, the First National Bank of Bedford City, and the residue, to wit, $5,600 were hypothecated by the company with the People's National Bank of Lynchburg, to secure a loan. On April 4, 1889, the debt of the company to M. A. Furbush & Son had been reduced to $11,059.52, of which $9,878.99 was principal. On April 11, 1889, the stockholders of the company sold all the property, real and personal (the finished goods and office furniture excepted), to W. H. McGhee, T. D. Berry, S. M. Bolling, S. Griffin, and J. L. Campbell, for the sum of $17,000; these purchasers buying with notice of the debt, amounting to $11,059.52, due to M. A. Furbush & Son, and the lien on the machinery, etc., for its security, and of the $10,000 coupon bond mortgage on the entire property of the company; but it was agreed that, 'of course, the purchasers have the privilege of using the purchase money, as far as it will go, in settling said mortgages. ' On the next day, to wit, on April 12, 1889, after the said purchase, an agreement was entered into between the said five purchasers and M. A. Furbush & Son, by which it was agreed that the $5,600 of the company's coupon bonds which had been hypothecated with the People's National Bank of Lynchburg, and which were then in the possession of the said bank as collateral for a loan of $--, should be redeemed by the said five purchasers and turned over to M. A. Furbush & Son, and that M. A. Furbush & Son should receive said bonds, and credit the amount of the same, as of the day acquired, as a cash payment upon the debt due them. This was done as agreed, and the debt due M. A. Furbush & Son was thereby diminished by the amount of the said coupon bonds, leaving the amount of said debt, secured as aforesaid, $5,459.52. It was further agreed that the said five purchasers aforesaid should execute their four bonds payable to the company, for an amount equal to the residue of said debt due M. A. Furbush & Son, said bonds to be each in an equal amount, and payable, with interest, in four annual installments, and that said four bonds should be assigned by the company to M. A. Furbush & Son as collateral and additional security for the balance of their said debt left due after crediting

Page 427

the said $5,600 of the company's coupon bonds as a cash payment upon said debt. This was not done, however, but in lieu of it the said five purchasers, in an addendum to said agreement, guarantied to M. A. Furbush & Son the payment (as installed) of the said balance of the debt due them by the company. On...

To continue reading

FREE SIGN UP