Union Trust Co. of Indianapolis v. Curtis

Decision Date13 July 1917
Docket NumberNo. 22426.,22426.
PartiesUNION TRUST CO. OF INDIANAPOLIS v. CURTIS et al.
CourtIndiana Supreme Court

OPINION TEXT STARTS HERE

Petition by the Union Trust Company of Indianapolis, trustee, made to the Supreme Court in the action by such company against John C. Curtis, receiver, and others for mandate to Samuel E. Cook, Judge, to comply with mandate in said cause. Matter continued.

Charles N. Thompson and Addison C. Harris, both of Indianapolis, Frank B. Jaqua, of Portland, and Henley & Joseph, of Indianapolis, for appellant. Watkins & Butler, Bowers & Feightner, and Lesh & Lesh, all of Huntington, for appellees.

HARVEY, J.

The above action was decided by this court in 1914; the opinion appears in Union Trust Co. v. Curtis, 182 Ind. page 61, 105 N. E. 562, L. R. A. 1915A, 699. By that appeal was presented the action of the circuit court of Huntington county in reference to granting the prayer of the Union Trust Company that certain restrictions be removed from the original decree of sale entered in said cause, and that the property in the receiver's possession be sold, the receivership wound up, and that the trust be closed. To use the language of said opinion:

“In short, the action was to set aside and remove the obstructions preventing a sale of the property, and to enforce the decree of sale, and to wind up the receivership, which was being carried on at a great loss, and close the trust with due speed.”

Between the date of the decree of foreclosure in 1910 and the date of the filing of said action to so free the decree and require a sale of the property, a period of two years, the indebtedness resulting from the operation of the road by the receiver had been increased by, approximately, $100,000. The ruling of the circuit court was reversed, and direction entered that:

“The trial court free its decree of sale of the conditions herein determined to be the obstructive of the execution of it, and to proceed to carry it into effect.”

Complying with said mandate, the circuit court struck from its decree the requirement that the property should not be sold for less than an upset price of $800,000, and the requirement that the purchaser should maintain shops at Huntington, and maintain and operate the road from Portland to Huntington as a steam road. The Union Trust Company, appellant in said cause, filed in June of this year in this court, in said cause, a petition, wherein it alleged, in substance, that though several attempts have been made to sell the property, nothing of any benefit to creditors has been accomplished.

The petition further alleges that, notwithstanding said mandate, the judge of said circuit court has continuously entertained, and does now entertain, the opinion that said railroad should be extended and should be operated by the receiver, and under the supervision of this court; and in accord with said opinion, at the September term, 1916, of said court, said judge caused to be entered an order, in effect, that whereas large sums had been paid by townships in Huntington, Jay, and Wells counties in aid of the construction of said road, and large sums had been invested in mills, factories, and elevators along the line of said road, a discontinuance of the operation of said road would result in great inconvenience to said public and said business enterprises dependent upon the said road; and said road should be operated and continued, either as a “steam, electrical, or other motive power railroad,” and that:

“Therefore the order of sale heretofore made herein is amended so as to require the purchaser, or purchasers, of said railroad to give sufficient assurance and a sufficient bond, in such a sum as may hereafter be determined, conditioned that such purchaser, or purchasers, will operate and continue to operate said road as a common carrier, either as a steam, electrical, or other motive power railroad, and that the purchaser, or purchasers, thereof, shall agree that said bond shall inure to the benefit of said Huntington township, and other townships, and that said townships shall have the right to sue on said bond and enforce the conditions thereof in the event of a breach of said conditions.”

That on the day following the entry of said order, which order was made in anticipation of such sale, bids were received, one of $80,000, subject to the terms above last mentioned, one of $81,000, and another of $81,500, neither of the latter being as expressly stated therein, subject to the obligation to operate said road.

The petition further states that because of the opinion of said court, so recited in the record, that if said sale is continued the property can be sold to some party for a better price, and who will agree to operate it as a railroad and a common carrier, the sale herein was continued until January 8, 1917; and the receiver was ordered, to “readvertise said property for sale *** on the terms and conditions of the orders herein.” That on January 8, 1917, one bid was received of $126,100, accompanied by a certified check for $20,000, payable to the receiver, which bid offered to pay the balance in cash upon delivery of title, provided said money was applied to the payment of delinquent taxes, and said bid expressly stated that the bidder did not agree to operate said road, nor give bond so to do.

A second bid was at said time received of $125,000, of which $5,000 was proposed to be paid in cash, and the remainder in one year, title to be clear of taxes, liens, and other claims; said bid further proposed to deposit $475,000 of the common stock of a new company to be distributed among the creditors of the old company, the bidder agreeing said road should be extended and operated, and the receiver to retain possession until final payment. (It is not alleged or shown that any creditor had agreed to accept any part of the proposed common stock on account of its claim.)

The latter bid was accepted by the receiver and approved by the court, though no guaranty of any kind accompanied the same, nor has any been given, as required by said last-quoted order. The petition shows that said advance payment of $5,000 was not made, but in April, 1917, the court approved a contract between the receiver and the bidder by which the operation and control of the road was turned over to said bidder until the further order of the court, without any security for performance and the purchaser agreed to use the surplus earnings and his own funds to place the equipment in condition for operation, and to discharge all operating expenses. That in lieu of said cash payment of $5,000, the purchaser would advance such sums as in his judgment were necessary to rehabilitate the track, rolling stock, and other property, the purchaser to be subject to the order of and removal by the court when, by said court, it might be deemed expedient, the title to remain in the receiver until the full purchase price was paid.

The petition alleges that the purchaser is now in possession of said property; that the indebtedness chargeable against said property has increased during the nine years since the receiver was appointed approximately $267,815, and that over $170,000 of said increase has accrued since the Union Trust Company sued to remove the obstructions from the decree of sale; that no taxes have been paid since the receiver was appointed, and the tax liens now aggregate over $80,000; that during said time all of the property of the road has greatly depreciated in value; that the Public Service Commission has condemned the passenger cars of said road; and that three cars using gasoline as a motive power have been purchased, which cars, papers filed herein show, have not been paid for and are subject to lien.

A writ of mandate is prayed, compelling Samuel E. Cook, judge of said circuit court during all of said time, to comply with the mandate of this court in said cause.

In answer to an order to show cause, said Samuel E. Cook, respondent, alleges: That the only issue before the court on the appeal, herein described, was whether the circuit court erred in refusing: (1) To remove from its decree of sale the upset price of $800,000; and (2) to remove the requirement that said road be operated by steam power; and (3) in deferring the marshaling of priorities among claimants, and that “this disposed of all the issues before the court, and none other was or could be decided.” The answer alleges that the court did comply with said mandate in every detail, and spread of record an order to that effect, and ordered that a deposit of $15,000 be required of all bidders. That thereafter the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT