Hart v. Barney & Smith Mfg. Co.

• Decision Date: 01 May 1881
• Citation: 7 F. 543
• Parties: HART, Receiver, v. THE BARNEY & SMITH MANUF'G CO. [1]
• Court: United States Circuit Court, District of Kentucky

7 F. 543

HART, Receiver, v. THE BARNEY & SMITH MANUF'G CO. ^[1]

United States Circuit Court, D. Kentucky.

May, 1881

Wm Hendricks, for plaintiff.

Lincoln Stevens & Slattery and Stevenson & O'Hara, for defendant.

BARR D. J.

In this case, by agreement of parties, a jury was waived; and the court gave judgment for the plaintiff. The defendant has moved the court for a new trial, and the respective counsel have argued the matter with much ability and earnestness. The amount involved is not large, but the questions are important, and it is due to the case, as well as the counsel that I should state the reasons for the conclusions which are decisive of the case. These conclusions, as heretofore filed are substantially-- (1) That the plaintiff, who is the receiver of the Fleming circuit court, has all the rights, in this contest, to the property in controversy, which all or any of the parties to the consolidation suits in which he was appointed have; (2) that the rights of the Barney & Smith Manufacturing Company have not been changed as against plaintiff and those he represents by the suit and judgment in this court, in 1879, and hence defendant must rely in this action alone upon its contract with Berthourd, dated March 13, 1877; (3) that the rights of the parties in this contention are construed and governed by the law of Kentucky, and not by that of Ohio; (4) that the right of the attaching creditors of Quintard, and that of the Covington, Flemingsburg & Pound Gap Railroad Company, as purchaser, is superior to that of defendant under its contract of March 13, 1877.

The first and second propositions are not seriously controverted by counsel, but the others are controverted most earnestly by defendant's counsel. The facts which are proven, or fairly inferable from the testimony, are these: One E. N. Quintard, who was a non-resident of the state of Kentucky, had, in 1877, a contract with the Covington, Flemingsburg & Pound Gap Railroad Company, in which he agreed to construct and equip, ready for running, parts of the road. The terms of the contract are not clearly shown, and ther is some doubt as to whether the rolling-stock, when placed upon the road, was to be Quintard's or the railroad company's. One A. P. Berthourd held Quintard's power of attorney, and seems to have been the sole manager and controller of his interests. There was constructed in March, 1877, a few miles of this road ready for the rolling-stock. One engine and tender were obtained by Quintard. Berthourd contracted in his own name for the cars in controversy. This contract is in these words, viz.:

'This agreement between Barney & Smith Manufacturing Company, of Dayton, Ohio, of the first part, and A. P. Berthourd, of the second part, witnesseth: The said party of the first part has agreed and does hereby agree (on terms and conditions hereinafter contained) to construct for and deliver to the party of the second part, at Dayton, Ohio, on board cars, on or before March 15, 1877, the following cars, to-wit: One combined passenger and baggage car, one coal car, as agreed; said cars to be of the best material and workmanship, and to be built according to the specifications furnished by the party of the first part, and received into the qualified possession of the said party of the second part, upon the following terms and conditions:

'First. Upon the construction of said cars, ready for delivery into the possession of the said party of the second part, said second party is, for each and every car, to pay to the party of the first part the sum of twenty-nine hundred and thirty dollars ($2,930) for the lot, (two cars,) as follows: $1,450.32 in cash, and note at 60 days from this date for $1,479.68, indorsed by E. S. Throop, and payable at Second National Bank of Cincinnati, Ohio, without interest. And for the deferred payments, to execute and deliver to said party of the first part the negotiable promissory notes of said party of the second part, payable at Second National Bank of Cincinnati, Ohio, and to include in each note interest at the rate of no per cent. per annum on the amount of the deferred payment for which such note is given.

'Second. No right, title, or interest in said cars, or any of them, (except the qualified possession, use, and control thereof as hereinafter provided) is to pass from said party of the first part or vest in said party of the second part until all of said notes, and any notes given in renewal of any of them, shall have been fully paid.

'Third. The said party of the second part is to have possession and use of said cars so long as the said notes given as above provided, or their renewals, are promptly paid at maturity, as they severally become due, and they are to keep all the said cars in good order and repair; and if any one or more should be injured or destroyed, either on said road of said party, or any other party, or any other road, to repair or replace forthwith every car injured or destroyed. But if said party of the said second part shall fail to pay any of said notes, or any renewal thereof, as it becomes due, or within 30 days thereafter, or shall cause or suffer any of said cars to be taken out of their said possession by legal process or otherwise, then the said party of the first part may, without demand and without legal process, resume the possession of all such cars, wherever found, as they may deem necessary, and transport the same to their places of business at Dayton, Ohio, or any other place, at the expense of the party of the second part, and may thereafter sell the same at public or private sale after 10 days' written notice to said party, and apply the proceeds on the unpaid notes, whether due or not; the said party of the second part still remaining liable for any balance of such notes thereby unpaid. And it is further provided, said cars being of narrow gauge, and therefore inconvenient for transportation, that, upon any default in payment as aforesaid, the said second party, on demand of said first party, shall place all of said cars upon such convenient side tracks of its road as said first party may select, and hold the same without use or charge, subject to sale, etc., as aforesaid, by said second party.

'Fourth. In case the party of the first part shall fail to deliver all or any part of the cars on the aforesaid contract within the time named therein, by reason of delay of delivery of materials purchased from other parties for said cars, or from fire in their shops, strike of their men, or from any other casualty beyond their control, the party of the first part shall not be held liable for damages by reason of said delay to the party of the second part: provided, they use all due diligence to complete said contract within the earliest practicable time thereafter.

'Fifth. On full payment of said notes, and of the renewals thereof, but not before, the title to said cars, and the absolute property and possession thereof, shall pass to and vest in said party of the second part, or whomsoever they may designate.

Executed in duplicate this thirteenth day of March, 1877.

'Attest: B. & S.,

'F. E. SMITH, Asst. Sec'y. By E. P. BARNEY, Supt.

'E. S. THROOP.

The contract was executed in Ohio, and the cars delivered to Berthourd on board of cars at Dayton, Ohio. Defendant's agents, who made this contract, knew at the time that these cars were to be taken to Kentucky and run upon the Covington, Flemingsburg & Pound Gap Railroad. They were immediately taken to Kentucky and placed upon the Covington, Flemingsburg & Pound Gap Railroad, lettered so as to indicate they belonged to that road. The combined passenger and baggage car was marked on each side, near the top outside, and on the inside of each, with the letters 'Covington, Flemingsburg & Pound Ga.' The flat car was marked 'Covington, Flemingsburg & Pound Gap, No. 1.' David Wilson & Co. sued out an attachment from the Fleming circuit court against Quintard, making the railroad company a defendant and claiming a lien on its property. This was on the twenty-eighth of March, 1877, and on the same day the attachment was levied upon these cars, then upon the road of the Covington, Flemingsburg & Pound Gap Railroad Company. Subsequently, other creditors of Quintard sued out attachments, and had them levied upon the same cars and other rolling-stock on the road. These parties also claim a line on the railroad's property for their debts.

The Fleming circuit court, on the fourteenth of April, 1877 appointed William F. Fant receiver, and ordered him to take possession of the 'railway rolling-stock, and all of its property. ' This he did by making an agreement with Berthourd, dated May 12, 1877. In this agreement Berthourd recognized the order of the court, and its receivers' right to the possession of the road and its rolling-stock, and agreed with him to run the road upon certain terms therein mentioned. The agreement, however, recited that it was made under protest, and without intending to prejudice Berthourd's rights, or the rights of others, in their claims to the locomotives, cars, or road. Subsequently, the various suits, all of a like character, were, by order of the Fleming circuit court, consolidated. The road was run under the agreement of May, 1877, until February, 1879, when Mr. Fant resigned, and plaintiff, Hart, was appointed in his stead. This was on the ninth of February, 1879, and on the fifteenth of February, 1879, Hart made another agreement with Berthourd, in which he recognized Hart as receiver, being in the possession of the road, and agreed to run it until March 1, 1879, at 12 M., and then to deliver to the receiver the rolling-stock, and all of the property on the track of said road and belonging to it. ...