Cochran v. Pittsburg, S. & N.R. Co.

• Decision Date: 06 February 1907
• Citation: 150 F. 682
• Parties: COCHRAN v. PITTSBURG, S. & N.R. CO. et al.
• Court: U.S. District Court — Western District of New York

150 F. 682

COCHRAN v. PITTSBURG, S. & N.R. CO. et al.

United States Circuit Court, W.D. New York.

February 6, 1907

Bushnell & Metcalf, for complainant.

Joline Larkin & Rathbone and Kenefick, Cooke & Mitchell (Daniel J Kenefick and Arthur H. Van Brunt, of counsel), for defendants.

HAZEL District Judge.

The defendants have interposed demurrers herein on the grounds that the court is without jurisdiction, the bill failing to show a controversy between citizens of different states at the time of the commencement of the action; that the Colonial Trust Company, the original trustee, or its successor, the Hamilton Trust Company, have not been requested to institute a foreclosure of the mortgage herein sought to be foreclosed as provided therein; and generally, that the bill lacks equity and is multifarious.

The mortgage inter alia provides that bondholders shall not have the right to foreclose the mortgage for default of any of its conditions unless a majority in amount of the holders of bonds outstanding have requested in writing of the trustee that a foreclosure be brought in the name of the trustee and security for costs and liabilities be offered; such notification and indemnification in terms being made a condition precedent to foreclosure. The demurrants contend that the bill does not disclose a proper request to bring this action. Authorities abound that a provision contained in a mortgage such as is mentioned in the bill is purely contractual and ordinarily must be strictly complied with before a bondholder feeling himself aggrieved can enforce his remedy. See Chicago, D. & V. Railroad Co. v Fosdick, 106 U.S. 47, 1 Sup.Ct. 10, 27 L.Ed. 47; Seibert v. Minneapolis & St. L. Railroad Co., 52 Minn. 158, 53 N.W. 1134, 20 L.R.A. 535, Am.St.Rep. 530; Shaw v. Little Rock, etc., Railroad Co., 100 U.S 612, 25 L.Ed. 757; Canada Southern Railroad Co. v. Gebhard, 109 U.S. 534, 3 Sup.Ct. 363, 27 L.Ed. 1020. That the orator was unable to give the necessary notice of a majority in amount of bondholders or of one-quarter of the outstanding bonds to the trustee is clearly perceivable on inspection of the bill. The complainant's right to maintain this action, however, is based upon the declared hostility of the trust company to the rights of the complainant; and therefore it is insisted that this action does not fall within the ordinary rule requiring such notice. The bill alleges that the designation by the Pittsburg, Shawmut & Northern Railroad Company without notice to the complainant of the Hamilton Trust Company to succeed the Colonial Trust Company was collusive and in violation of the terms of the mortgage, but, assuming such...