Rea v. Pa. Canal Co.
| Court | United States State Supreme Court of Pennsylvania |
| Writing for the Court | POTTER, J. |
| Citation | 245 Pa. 589,91 A. 1053 |
| Parties | REA v. PENNSYLVANIA CANAL CO. et al. |
| Decision Date | 01 July 1914 |
245 Pa. 589
REA
v.
PENNSYLVANIA CANAL CO. et al.
Supreme Court of Pennsylvania.
July 1, 1914.
Mestrezat, J., dissenting.
Appeal from Court of Common Pleas, Philadelphia County.
Bill by Samuel Rea, trustee, against the Pennsylvania Canal Company and others, to foreclose a mortgage and fix the order of distribution of funds. From a decree making distribution, plaintiff and the defendant
Pennsylvania Railroad Company appeal. Reversed.
Argued before FELL, C. J., and BROWN, MESTREZAT, POTTER, ELKIN, and MOSCHZISKER, JJ.
John G. Johnson, of Philadelphia, for appellant. Rea. Francis I. Gowen, of Philadelphia, for appellant. Pennsylvania R. Co. Thos. Raeburn White, William F. Norris, Robert D. Jenks, John Cadwalader, Jr., and William A. Glasgow, Jr., all of Philadelphia, for appellees.
POTTER, J. This was a bill in equity, filed by Samuel Rea, trustee for bondholders, under a mortgage executed by the Pennsylvania Canal Company. The bill prayed for foreclosure, and for instructions as to the distribution of the proceeds of sales of the mortgaged premises. The defendant the Pennsylvania Canal Company in its answer admitted all the allegations of the plaintiff's bill, and submitted itself to the decree of the court. Mr. John Cadwalader and others intervened as defendants to protect themselves as the owners of certain bonds of the Pennsylvania Canal Company. Certain pertinent findings of fact by the court below, may be stated as follows:
The Pennsylvania Canal Company, being empowered to issue bonds under its charter to the amount of $5,000,000, duly issued bonds to the amount of $3,000,000. These bonds were indorsed, in pursuance of a resolution adopted by the board of directors of the Pennsylvania Railroad Company, which reads as follows (June 30, 1870):
"Resolved, that the Pennsylvania Railroad Company will agree to purchase the interest coupons of $3,000,000 of the general mortgage bonds of the Pennsylvania Canal Company—said bonds being intended to retire the $2,367,000 existing debt of the Canal Company; to pay $103,000 for the Hazard Coal Property, as contracted to be paid by the Canal Company; to pay $200,000 for the contemplated enlargement of the canal this year; and the balance of said $3,000,000 to be used for future enlargement: Provided, the Pennsylvania Canal Company transfer to the Pennsylvania Railroad Company, as collateral security, all their rights and interest, directly or indirectly, in their coal properties, and all stock of coal companies owned by them, all of which shall be held as indemnity against loss under the guarantee above provided for. This being done, then the following indorsement to be placed on the said $3,000,000 of bonds: 'For a valuable consideration the Pennsylvania Railroad Company by resolution of the board of directors thereof dated the 30th day of June, A. D. 1870, has agreed with the respective holders of the issue of bonds of the Pennsylvania Canal Company, dated July 1, 1870—of which bonds the within is one, there being two thousand nine hundred and ninety-nine (2,999) others, differently numbered, but of like date, tenor, and amount—that in case the said Pennsylvania Canal Company, their successors and assigns, shall fail to pay the interest coupons thereto attached when and as the same may mature, or within 30 days afterwards, respectively, that then the said Pennsylvania Railroad Company will purchase the said coupons at their par value from their respective holders on presentation thereof.'"
Under the mortgage there was reserved to the Canal Company the right to sell any part of the mortgaged premises, at any time, free from the lien of the mortgage, provided it used the proceeds for the benefit of the bondholders, or in the purchase of some of the bonds secured by the mortgage. Under this power the Canal Company sold from time to time portions of its property to the Pennsylvania Railroad Company. The proceeds of these sales were used by the Canal Company in the purchase and cancellation of bonds of the Canal Company, which bonds were at the time the property of the Pennsylvania Railroad Company. The Canal Company paid the interest coupons until July 1, 1888. After that date the holders of coupons, or their representatives who came to collect the coupons, were told to take them to the Pennsylvania Railroad Company, which would purchase them. Upon presentation at the offices of the Pennsylvania Railroad Company, an agreement was presented to and signed by the persons offering the coupons, setting forth that the coupons were being sold to the Railroad Company, and agreeing that the coupons so sold should continue in full force and validity as against the Canal Company.
The plaintiff, as trustee, has a fund of $433,014.74 in his hands, for distribution, and has also the property of the Canal Company, which...
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Pennsylvania Canal Co. v. Brown, 2114
...of payment and not of purchase. This finding was reversed by the Supreme Court of Pennsylvania, Rea, Trustee, v. Pennsylvania Canal Co., 245 Pa. 589, 91 A. 1053, which held that the contract was one of purchase and not of payment, that having purchased the coupons, the Railroad Company held......
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Chicago Title & Trust Co. v. Hoffberg, Gen. No. 39766.
...position, saying that they were acquired by purchase and were on a parity with other bonds. In Rea, Trustee, v. Pennsylvania Canal Co., 245 Pa. 589, 597, 91 A. 1053, there was an agreement indorsed on each of the bonds that the Pennsylvania Railroad Company, which controlled the Canal Compa......
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In re Escheat of Moneys in Custody of United States Treasury
...077, Alice Francis Brown v. Pennsylvania Canal Company and others, 229 F. 444. See, also, Rea v. Pennsylvania Canal Company, 245 Pa. 581), 91 A. 1053. 2 In accordance with the Act of May 29, 1920, c. 214, § 1, 41 Stat. 654, 28 U.S.C.A. § 3 Act of March 3, 1911, c. 224, 36 Stat. 1083, 28 U.S......
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Lenox C. Co. v. Duncan-Spangler C. Co.
...Bubb v. Parker & Edwards Oil Co., 252 Pa. 26; Tustin v. Phila. & R. C. & I. Co., 250 Pa. 425; Rea, Trustee, v. Penna. Canal Co., 245 Pa. 589; Sternbergh v. Brock, 225 Pa. 279; The Pennsylvania Co. v. The Erie & Pittsburgh R. R. Co., 108 Pa. 621; Alexander's App., 7 Sadler 552; Patterson Wat......
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Pennsylvania Canal Co. v. Brown, 2114
...of payment and not of purchase. This finding was reversed by the Supreme Court of Pennsylvania, Rea, Trustee, v. Pennsylvania Canal Co., 245 Pa. 589, 91 A. 1053, which held that the contract was one of purchase and not of payment, that having purchased the coupons, the Railroad Company held......
-
Chicago Title & Trust Co. v. Hoffberg, Gen. No. 39766.
...position, saying that they were acquired by purchase and were on a parity with other bonds. In Rea, Trustee, v. Pennsylvania Canal Co., 245 Pa. 589, 597, 91 A. 1053, there was an agreement indorsed on each of the bonds that the Pennsylvania Railroad Company, which controlled the Canal Compa......
-
In re Escheat of Moneys in Custody of United States Treasury
...077, Alice Francis Brown v. Pennsylvania Canal Company and others, 229 F. 444. See, also, Rea v. Pennsylvania Canal Company, 245 Pa. 581), 91 A. 1053. 2 In accordance with the Act of May 29, 1920, c. 214, § 1, 41 Stat. 654, 28 U.S.C.A. § 3 Act of March 3, 1911, c. 224, 36 Stat. 1083, 28 U.S......
-
Lenox C. Co. v. Duncan-Spangler C. Co.
...Bubb v. Parker & Edwards Oil Co., 252 Pa. 26; Tustin v. Phila. & R. C. & I. Co., 250 Pa. 425; Rea, Trustee, v. Penna. Canal Co., 245 Pa. 589; Sternbergh v. Brock, 225 Pa. 279; The Pennsylvania Co. v. The Erie & Pittsburgh R. R. Co., 108 Pa. 621; Alexander's App., 7 Sadler 552; Patterson Wat......