Cutting v. Tavares, O. & A.R. Co.

• Decision Date: 17 April 1894
• Docket Number: 212.
• Citation: 61 F. 150
• Parties: CUTTING v. TAVARES, O. & A.R. CO. (FLORIDA CENT. & P.R. CO. et al., Interveners).
• Court: U.S. Court of Appeals — Fifth Circuit

61 F. 150

CUTTING v. TAVARES, O. & A.R. CO. (FLORIDA CENT. & P.R. CO. et al., Interveners).

No. 212.

United States Court of Appeals, Fifth Circuit.

April 17, 1894

William Bayard Cutting, as trustee, brought suit in the circuit court against the Tavares, Orlando & Atlantic Railroad Company to foreclose a mortgage on thirty-two miles of road in Orange county, state of Florida. The mortgage was given to secure the payment of two hindered and fifty-six (256) bonds of one thousand dollars each, with interest at eight per centum per annum. Such proceedings were had in said suit that on the 24th of December, 1890, a decree of foreclosure and sale was rendered. The decree provided, among other things, as follows: 'At the conclusion of the sale, all deposits shall be returned except the deposit of the bidder to whom the property shall be struck off, and he shall have credit for the amount thereof, as a payment in cash on account of the purchase price. In addition to the said deposit of ten thousand dollars, so much of the purchase money as shall be necessary to pay off all obligations, if any there be incurred by the receiver under the orders of this court which shall then have come due and payable, shall be paid in cash, and the receiver is hereby ordered to furnish to the master, at least five days before the sale, a sworn statement of all such obligations, and of all other outstanding contracts made and obligations incurred by the receiver under the orders of this court, and not then paid off or discharged subject, however, to revision by the court, at the suggestion of complainant, and the purchaser shall take the property, subject only to the performance of the contracts and the payment of the obligations so stated; and the amount of the purchase price to be paid in cash shall be fixed by the master, and shall be announced by him at the time of the sale, and the cash payment, including the said ten thousand dollars, shall be deposited by the master in the National Bank of Jacksonville, to the credit of this cause, subject to be drawn out by the master on his check; and out of the funds so deposited the master shall pay the costs, fees, allowances, and compensation herein provided for, or which may hereafter be allowed by the court, and the said obligations of the receiver which shall have become due and payable; and, upon the confirmation by the court of such sale, the residue of the purchase price shall be paid to the master within thirty days thereafter, at a place to be appointed by him at the time of the sale, either in cash, or, at the option of the purchaser, in bonds of the defendant above described, and in interest coupons belonging to said bonds, such bonds and coupons, if such sale be for less than the amount due thereon, to be taken as equivalent to so much of the said purchase money as would be distributable and payable thereon. All bonds and coupons so received by the master in lieu of cash, unless thereby paid in full, shall be stamped with a statement of the amount of the purchase price thereby paid, which amount shall be deemed and held to be a payment on account of the amount due such bonds and coupons; and the said bonds and coupons, after being so stamped, shall be returned by the master to the parties presenting the same. All bonds and coupons paid in full shall be stamped accordingly or otherwise canceled by the master, and delivered by him to the defendant. * * * It is further ordered, adjudged, and decreed that the master pay out of the proceeds of such sale the amounts which shall hereafter be fixed and allowed by the courts for his fees and expenses of sale, the costs of this suit, the expenses and compensation of the receiver, the compensation of the complainant, W. Bayard Cutting, for his services as trustee, the allowances to counsel and solicitors; and out of the surplus, if any, the master shall pay all obligations incurred by the receiver under the orders of this court, which shall have become due and payable, and shall have been announced by the master at the time of the sale as aforesaid; and shall apply the residue of this surplus, if any, first to the payment in full, if such residue be sufficient, or, if not, to the payment, pro rata, of all the defaulted coupons belonging to the said bonds, and the interest thereon hereinbefore adjudged to be due and payable, together with interest on the amount thereof from the date of this decree to the time of payment by the master, at the rate of 8% per annum, and the interest hereinbefore adjudged on the principal of the said bonds and accrued since June 4, 1888, and interest thereon from the date of this decree, to the time of payment by the master, at the rate of 8% per annum; and, secondly, to the payment in full, if such residue be sufficient, or, if not, to the payment pro rate, of the principal of the said bonds; and, if afterwards any surplus remain, the master shall pay the same into court, subject to the further order of the court. ' Sale was made under the said decree on the 2d day of March, 1891, and the properties were purchased by the Florida Central & Peninsular Railroad Company for the sum of $176,000, it was further recited: 'And it further appearing that the bid so made was preceded by a deposit of ten thousand dollars by the said Florida Central and Peninsular Railroad Company as security that the said bid would be made good, and that it was the highest and best bid therefor, and that the said purchaser has made a further payment to the said master as follows: In cash, the sum of ten thousand one hundred and sixty-eight 86/100 dollars; the receipt of Florida Central & Peninsular Railroad Company, as successors to the right of the receiver of the Florida Railway & Navigation Company, on traffic balance, the sum of ten thousand three hundred and seventy-one [61 F. 152] and 46/100 dollars $10,371.46); the receipt of the Rogers Locomotive & Machine Works for engines, &c., twelve thousand seven hundred and ninety-five 61/100 dollars ($12,795.61); the receipt of the Pullman Palace Car Company for equipment, fourteen thousand two hundred and five 23/100 dollars ($14,205.23); notes of the receiver, principal and interest, amounting to the sum of thirty-eight thousand nine hundred and twenty-three and 22/100 dollars ($38,923.22); and, for the assurance of the payment of a part of the balance of said purchase money, has filed with Philip Walter, master, the evidence that said purchaser, the Florida Central and Peninsular Railroad Company, is the owner of and is possessed of two hundred and twenty-two (222) of the two hundred and fifty-six (256) one thousand dollars ($1,000) bonds, with attached coupons of the said defendant company, which it is ready to file with the master in the further proceedings to be had under this decree; and that, as to the rest and residue of said purchase money, the same shall be paid as is hereinafter provided. ' And it was ordered and adjudged as follows: 'And it is further ordered, adjudged, and decreed that it be referred to Philip Walter, Esq., as master of this court, to call in, upon giving thirty days' notice by publication in the Tribune, published in Jacksonville, Florida, weekly, for four (4) weeks, all of the outstanding bonds and coupons of the said defendant company, and that said master do make and report the application of the proceeds of the sale of said railroad property of the defendant company, other than as herein allowed, as aforesaid, to the said purchaser on the receipts as filed as follows: First. The costs of this proceeding, including an allowance to the master for his proceedings under said decree, the amount to be settled on coming in of his final report; and the compensation to the complainant, as trustee, one thousand dollars (1,000.00); to Burrill, Zabriskie & Burrill, complainants' solicitors, two thousand dollars (2,000.00); to T. L. Clark, complainants' solicitor, twelve hundred and fifty dollars (1,250.00); to Joseph H. Durkee, receiver, as per agreement, twenty-seven hundred and fifty dollars (2,750.00). Second. And to the intervening petitioners reported by the receiver in his report of January 29th, 1891, amounting to eight thousand nine hundred and twenty-seven and 63/100 ($8,927.63), or to such of them as upon investigation before said master shall be ascertained to come within the provisions of the terms of the amended decree herein filed, with privilege to the purchaser to contest before the master and before this court on the report of the master any and all of such claims. And it is further ordered and decreed that the said master ascertain and report the amount payable on each coupon and bond so filed with him, and that upon so ascertaining the amount to be due hereunder to each party filing either bonds or coupons of said defendant company with the master in the limit of time as aforesaid, the said purchaser shall forthwith pay to said master the balance due on said purchase, after making allowance for the payments as already made, and after allowing to him the proportionate value of such bonds and coupons as shall be so filed by the said purchaser.'

On the 23d of May, at the same term of the court in which the foregoing decrees were rendered, W. C. Lewis, alleging himself to be the owner of twenty (20) of the bonds under the issues secured by the mortgage, by intervening petition attacked the ownership of nineteen (19) of the two hundred and twenty-two (222) bonds tendered by the purchaser towards payment of the part of the balance of his purchase money, alleging that said bonds belonged to the defendant railroad company, never having been issued in such a way that the railroad company parted with its ownership. The Florida Central & Peninsular Railroad Company appeared and...