Rogers, Brown & Co. v. Tindel Morris Co.
| Decision Date | 28 March 1921 |
| Docket Number | 2093. |
| Citation | 271 F. 475 |
| Parties | ROGERS BROWN & CO. v. TINDEL MORRIS CO. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
J. B Colahan, 3d, of Philadelphia, Pa., for receivers.
M. B Saul, of Philadelphia, Pa., for respondent.
The question involved in this motion is best presented by a contrast of the forecasted result of its allowance or denial. The pregnant facts are that the Fidelity Trust Company holds the defendant's note for $90,000, with the pledge of its mortgage bonds for $110,000 as collateral. If the collateral had not been sold, and the defendant were making payment, the utmost the creditor could lawfully demand or possibly receive would be $90,000. As, however, the court has taken upon itself the duty of making payment (assuming a sufficiency of assets), the asserted possible result of a sale of the collateral is that the $90,000 creditor may receive $310,000. Add the circumstance that the creditor holds other bonds of the same issue, and the possible demand is further expanded.
How can this financial miracle be wrought? The result is, of course, dependent upon the sum for which the collateral and the mortgaged premises sell. If they sell for only a nominal sum, the result stated is asserted to be possible; if they sell at what is called par, there could be no such result. The court controls the sale of the mortgaged premises. The question is: Should it not exercise like control over the sale of the bonds? If the bonds were not the bonds of the defendant, but of a third party, it is admitted that the courts cannot, or at least should not, interfere. Why make a difference? The result is the same in kind, although (so far as affects the debtor) differing in degree, as in the latter case the limit of what might be received is $200,000, instead of $310,000. This difference in the figures is due to the circumstance that in the one case the chose in action sold is one against a third party; in the other, it is a chose in action against defendant. Does this make a difference in the legal rights of the creditor? The principle is that, having been given the right to sell, he should be permitted to exercise it. This is accorded him in other cases; why not also, where a chose in action against the debtor is pledged?
The answer to the question involved in this motion is thus seen to be dependent upon the answer to the other question of whether a debtor may pledge one promise to pay as collateral for another, thereby putting it within the asserted possible power of the creditor to double the indebtedness. In its concrete form, applied to the facts of this case, the question is: May a debtor pledge his own mortgage bond as collateral...
To continue reading
Request your trial
-
St. Louis Union Trust Company v. Universal Glass Company
... ... 339; Tennant v ... Insurance Co., 133 Mo.App. 345; Morris & Whitehead ... v. East Side Ry. Co., 104 F. 409 (Ore.); Miss ... Distilling ... Co., 57 Pa. S.Ct. 183; Rogers, Brown & Co. v. Tindel ... Morris Co., 271 F. 475 (Pa.); In re ... ...
-
Gilbert v. Fosston Mfg. Co.
...the kind referred to in Peacock v. Phillips, and that is enough. That case follows the rule of the federal courts. Rogers Brown & Co. v. Tindel Morris Co. (D. C.) 271 F. 475; Turner v. Metropolitan Trust Co. (C. C. A.) 207 F. 495; Mississippi Valley Trust Co. v. Railway Steel S. Co. (C. C. ......
-
Gilbert v. Fosston Manufacturing Company
... ... That case follows the rule of the ... federal courts. Rogers Brown & Co. v. Tindel Morris Co ... (D.C.) 271 F. 475; Turner v ... ...
-
In re Franks
...his allegations of fact in his instant statement of claim. As to effect given MacIntyre v. Kavanaugh, supra, see Rogers Brown & Co. v. Tindel Morris Co. (D. C.) 271 F. 475; In the Matter of John Brier, Bankrupt (D. C.) 3 F.(2d) 709, 5 A. B. R. (N. S.) The temporary restraining order issued ......