Corcoran v. Chesapeake and Ohio Canal Company

• Decision Date: 01 October 1876
• Parties: CORCORAN v. CHESAPEAKE AND OHIO CANAL COMPANY
• Court: U.S. Supreme Court

94 U.S. 741

24 L.Ed. 190

CORCORAN v. CHESAPEAKE AND OHIO CANAL COMPANY.

October Term, 1876

APPEAL from the Supreme Court of the District of Columbia.

The case is stated in the opinion of the court.

Mr. J. D. McPherson, Mr. Conway Robinson, and Mr. Joseph Bryan, for the appellant.

Mr. John P. Poe and Mr. Bernard Carter, for the appellee.

MR. JUSTICE MILLER delivered the opinion of the court.

The Chesapeake and Ohio Canal Company, from the date of its organization in 1824-25, issued several series of bonds, secured by as many mortgages on its property. The largest of these mortgages was the earliest, and was given to the State of Maryland for several millions of dollars; another was made to the State of Virginia; both of which States contributed largely, by the use of their credit, to the construction of this important work. In the last stages of the struggle to extend the canal to Cumberland, where it reached the coal-beds, which alone have made it of any value, the company issued another series of bonds to the amount of $1,700,000, for the payment of which it pledged, by way of mortgage, the revenues and tolls of the canal, after deducting the necessary costs of running the canal and its repairs, and perhaps some other defined outlays.

In this mortgage, Corcoran, the complainant and appellant in the present suit, was one of several trustees for the benefit of the bondholders. He also became, and according to the statements of the present bill is now, a larger holder of these bonds, or of the coupons for interest on them.

The purpose of this bill, which was filed by him on behalf of himself and all others in like condition as holders of this class of bonds, is to enforce the payment of the coupons of interest due and unpaid for many years past.

The defendants to the bill are the Chesapeake and Ohio Canal Company, the State of Maryland, and the remaining trustees of the mortgage bonds on which the suit is founded. They have all answered, except the State of Maryland.

The answer of the trustees is unimportant. The canal company admit the indebtedness and the failure to pay, but deny that, under the reservations of the mortgage of the tolls and revenues in plaintiff's mortgage, there is now or has been in their hands any part of the said revenues which they could lawfully appropriate to the payment of said coupons, except so far as they have already done so. After several amendments of the pleadings and stipulations as to facts, the issue was finally narrowed to two questions; namely, the jurisdiction of the Supreme Court of the District, and the right of the holders of the interest coupons to exact out of the net revenues of the company payment of interest on those coupons from the respective dates when they fell due.

The first of these questions is raised by the proposition of the defendants, the canal company, that the State of Maryland is a necessary party to this suit; and, as she has not voluntarily appeared, and cannot be made amenable to any process to compel an appearance, the bill must be dismissed on that ground.

In the view which this court takes of the other question, and as the court has jurisdiction as to the canal company, it is unnecessary to consider or decide this one.

In reference to the question of interest upon the interest coupons, the canal company, in its answer to complainant's bill alleges that, in a suit brought by the State of Virginia in the Circuit Court of Baltimore City, to which suit the present complainant and his co-trustees, the State of Maryland, the canal company and others, representing all the various classes of bondhl ders, were parties, 'the issue raised in this case, that the coupons upon said preferred bonds are entitled to bear interest from their maturity, which is to be allowed payment out of the revenues of this respondent in preference to the claims of the State of Maryland, was distinctly presented, was argued, amongst others, by the solicitors of complainant in this case, and was decided by the court in opposition to the claims of said complainant as then asserted and as reiterated in the bill in this case.' The record of that suit, including the opinion of the Court of Appeals and the brief of the counsel of the present appellant, are made exhibits.

The bill of the State of Virginia distinctly claims interest upon the coupons which she held, standing in the same relation as those of the appellant here. The right to that interest as a preference to the...