Cox v. Cent. Vermont R. Co.
| Decision Date | 04 April 1905 |
| Citation | 73 N.E. 885,187 Mass. 596 |
| Parties | COX v. CENTRAL VERMONT R. CO. et al. AMBLER v. SAME. DENNIS v. SAME. BURDITT et al. v. SAME. PRENTISS v. SAME. WHITING v. SAME. EDGERLY v. SAME. CROSBY v. SAME. CHASE v. SAME. JOHNSON v. SAME. TRAIN v. SAME. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Report from Superior Court, Suffolk County; Wm. Schofield, Judge.
Actions by Cox, Ambler, Dennis, Burditt and others, Prentiss, Whiting, Edgerly, Crosby, Chase, Johnson, and Train against the Central Vermont Railroad Company; the Boston & Maine Railroad being summoned as trustee, judgment charging the trustee, and case reported for the Supreme Judicial Court. Affirmed.Robt. M. Morse and Wm. M. Richardson, for plaintiffs.
J. L. Thorndike and E. R. Thayer, for trustee.
The question in these cases is whether the Boston & Maine Railroad, summoned as trustee, shall be charged upon its answers. The cases have been pending many years, and different answers have been filed at different times, and various proceedings have been had to determine the liability of the trustee. On December 1, 1902, an answer was filed in addition to and in amendment of the former answers, which purports to give with much fullness the facts in regard to the various questions now before us. We are of opinion that the previous proceedings do not affect the right of the parties to rely upon this answer, in connection with the other answers, as stating facts upon which the cases should be decided.
Many of the statements are made upon information and belief. These statements, in the absence of anything in the record to control them, must be taken as true. Willard v. Sturtevant, 7 Pick. 194-197;Bostwick v. Bass, 99 Mass. 469; Clinton Bank v. Bright, 126 Mass. 535;Emery v. Bidwell, 140 Mass. 271-274, 3 N. E. 24;Seward v. Arms, 145 Mass. 195, 13 N. E. 487.
It appears that the trustee had in its possession $16,521.42 which was due to the defendant on account of business done by other railroad companies whose railroads formed, with the railroads of the defendant and the trustee, continuous lines, of which only the railroad of the defendant joined that of the trustee. The total charge for all this business was collected either at the place of starting or at the place of destination, and accounted for to the companies that were entitled to it. For the sake of convenience, it was a custom of each company having money to pay to the others to pay to the one whose railway adjoined its own not only the amount due that company, but also all sums belonging to the other companies beyond; and the company receiving the money retained what was due to it, and forwarded the residue. Accounts were kept by each only with the company owning the railways next adjoining its railway on each side of it, and the trustee kept an account only with the defendant, crediting to the defendant and paying it not only the sums due to it, but also the sums due on account of such business to the other companies; and no distinction was made in the accounts or items between money paid to the defendant as belonging to it, and money paid to it belonging to the said other companies. Under these facts, money credited to the defendant on account of the earnings of railroads beyond its lines it would take only as the agent and trustee of such railroads. This part of the case is covered by the decision in Chapin v. Connecticut River Railroad Company, 16 Gray, 69, which is shown by an examination of the papers on file to be identical with this case in its material facts. See, also, Seward v. Arms, 145 Mass. 195, 13 N. E. 487. For this money the trustee cannot be charged.
The answer shows that $2,154.18 was held by the trustee, which was due to the defendant on account of earnings from business done on the Ogdensburg & Lake Champlain Railroad. This road the defendant was operating under a lease, with many special covenants, given by that corporation to the Consolidated Railroad Company of Vermont, and assigned by a formal assignment and by another elaborate instrument of transfer to the defendant. Under the original lease all of the gross receipts from the business and traffic of the railroad and other property were to be received by the lessee, and were to be disposed of by it in the manner stated. The lessee then covenanted to keep and maintain the railroad and its equipments and all property pertaining to it in good order and condition, making renewals of cars and engines and other things needed; to pay all taxes and assessments upon the property, and to pay expenses of meetingsof directors and stockholders of the lessor; to assume and pay the expenses of pending litigation; to fulfill outstanding contracts and obligations of the lessor; to assume all obligations of the lessor that might afterward be incurred by statute or at common law as common carriers, warehousemen, or otherwise, and indemnify and save harmless the lessor from all costs, damages, or loss by reason of any failure to fulfill these obligations, and by reason of any claim that might arise from the maintenance and operation of the railroad and other property; to keep policies of insurance in force, for the benefit of the lessor, upon the buildings, bridges, and docks of the lessor, and other property then kept insured by it; and, in the discretion of the lessee, to keep in force such policies of insurance as it might deem advisable to protect it from loss by virtue of its liability as a common carrier. The lessee was also to keep accurate accounts of its earnings and income from the railroad and other property, and of its expenses and disbursements concerning the same, open to the inspection of the lessor, and was to furnish the directors of the lessor, whenever called upon, with accurate accounts and statements of the receipts and disbursements concerning the railroad and other property, to the end that the directors might, from time to time, determine the amount of net earnings applicable to the payment of interest on certain bonds outstanding against the lessor. The lessee then covenanted with the lessor that the gross earnings, income, and receipts from the business of the railroad and other property should be disposed of, first, for the payment of the obligations hereinbefore mentioned, and the other expenses of the maintenance, operation, use, development, and improvement of the railroad and other property, and the payment of certain floating indebtedness specified in a schedule; second, for the payment of interest on certain first mortgage bonds outstanding against the lessor, and afterwards to the payment of interest on certain other bonds of different classes, and then that the residue and remainder should be divided equally between the parties.
The contention of the trustee is that, all the gross earnings of this railroad which the defendant collected in its management of the property, it received and held as a trustee, and that the money in its hands was not subject to attachment for its debts or liabilities incurred in the business or otherwise. We are of opinion that this contention is not correct. The defendant was in the possession and control of the railroad. It was bound to the lessor by a variety of covenants which created a direct liability at law. It was its duty, as the lessee in possession of the railroad, to conduct the business, and, in so doing, to contract debts from day to day in the operation of the railroad, as if it were the owner. It was its duty to pay these debts, and the payments were to be deducted from the gross earnings, to determine the net earnings in which the lessor had an interest. Upon the theory of the trustee in this case, the defendant was acting as a trustee in the possession and operation of the railroad, and in the collection of every bill for the transportation of merchandise, and in incurring every debt that it contracted in the course of the business. Upon this theory, every one who had a valid claim, small or great, whether in contract or in tort, growing out of its possession and operation of the railroad, was a cestui que trust under the instrument, and could bring a suit in equity to have the trust enforced against the gross earnings for his benefit. We do not think that...
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