Hubinger v. Central Trust Co. of New York

• Decision Date: 01 May 1899
• Docket Number: 1,099.
• Citation: 94 F. 788
• Parties: HUBINGER v. CENTRAL TRUST CO. OF NEW YORK.
• Court: U.S. Court of Appeals — Eighth Circuit

94 F. 788

HUBINGER v. CENTRAL TRUST CO. OF NEW YORK.

No. 1,099.

United States Court of Appeals, Eighth Circuit.

May 1, 1899

This is a suit wherein the Central Trust Company of New York, the defendant in error, hereafter termed the 'Trust Company,' sued John C. Hubinger, the plaintiff in error in an action which is essentially an action at law to recover damages for the wrongful disposition and destruction of property which at one time constituted an electric street-railway plant in the city of Keokuk, Iowa, the same being the property of the Gate City Electric Street-Railway Company. A jury was waived, and the case was tried by consent before the court, which made a special finding of facts. From this finding we extract the following facts, in substance which are all that are deemed essential to a proper understanding of the case: The Central Trust Company, as trustee, filed a bill to foreclose a deed of trust which was executed by the Gate City Electric Street-Railway Company of the city of Keokuk, to secure an issue of bonds amounting to $85,000, which deed of trust covered all the property and franchises of said street-railway company. The suit was brought in the superior court of the city of Keokuk, Iowa and a decree of foreclosure was entered therein on March 21 1894. At a sale which was made under said decree by a master on April 28, 1894, the mortgaged property was purchased by John C. Hubinger for $10,000, which sum was not sufficient to pay certain preferential claims that had been allowed in the foreclosure proceedings, and left nothing to be applied on the mortgage indebtedness. The sale was approved by the superior court, notwithstanding objections made thereto by the Trust Company, and the property so sold was delivered to Hubinger on May 10, 1894. From the order approving the sale the Trust Company took an appeal to the supreme court of Iowa, on June 27, 1894, without giving bond. In the latter court the order of the superior court confirming the sale was reversed, on January 23, 1896, and thereafter, on June 9 1896, a writ of procedendo issued from said supreme court, directing further proceedings in the foreclosure case, not inconsistent with the opinion of the supreme court of the state. 96 Iowa, 646, 65 N.W. 982. Shortly after the property had been turned over to Hubinger, as heretofore stated, he surrendered the possession thereof to the J. C. Hubinger Company, a corporation then engaged in the operation of an electric light plant in said city of Keokuk, which was controlled by said J. C. Hubinger, and on April 10, 1896, after the supreme court of the state had reversed the order of the superior court confirming the sale, said Hubinger made the transfer effectual by conveying said property, with full covenants of warranty, to the J. C. Hubinger Company for a consideration therein expressed of $100,000. After Hubinger had acquired the property aforesaid at the sale aforesaid, he applied to the city of Keokuk for a franchise to operate an electric street railway on the streets of said city, and secured the passage of an ordinance known as 'Special Ordinance No. 73,' whereby there was granted to the said J. C. Hubinger Company, for a period of 25 years from said date, 'the exclusive right to lay down, construct, and operate a street railway on all the streets of the city of Keokuk, with single or double track, standard railway tracks, with electric or other practicable motor power, other than animal or steam. ' This ordinance was duly accepted by the J. C. Hubinger Company, and by its terms operated as a repeal of a previous ordinance, No. 60, granted to the Gate City Electric Street-Railway Company, under which ordinance it had previously operated its railway in the streets of the city of Keokuk. The deed of trust in favor of the Trust Company, to which reference has been made, covered the franchises granted by said ordinance No. 60. After procuring the passage of ordinance No. 73, and the repeal of ordinance No. 60, important changes were made by the defendant in the location of the tracks of the Gate City Electric Street-Railway Company, as they existed when the deed of trust was executed. These changes consisted in extending the tracks at certain places, and in taking up portions of the track on some of the streets, and laying the same on other streets, so as to conform to the requirements of the new ordinance No. 73. All of the machinery originally used to operate said railway, such as engines, dynamos, and generators, with the exception of two boilers, were also removed from the power house of the railway company to a power house which was owned and used by the J. C. Hubinger Company. Before the commencement of this suit, and after the reversal of the order approving the foreclosure sale, the Trust Company tendered to the defendant the sum of $10,000, which he had paid for the mortgaged property at the foreclosure sale, and demanded its return; but the defendant refused to restore it unless he was paid all further sums which he had expended in changing, altering, and repairing it, and sundry other sums which he had also expended. The trial court further found that by procuring the repeal of the old ordinance No. 60, and by the changes which the defendant had made in the mortgaged property while the same was in his possession, and by dismantling the old power house, the identity of the mortgaged property had been destroyed, so that it was no longer in existence in its entirety, and could not be restored to the Trust Company. It also found that the fair market value of said property, when the same was turned over to the defendant, was $33,600. In pursuance of these findings, the trial court rendered a judgment in favor of the Trust Company, the plaintiff below, for the sum of $25,271.18, which sum represents the market value of the mortgaged property as assessed by the court, less the price therefor at the foreclosure sale, interest having been computed on the balance at the rate of 6 per cent. per annum from and after June 10, 1896, until the rendition of the judgment. The...