UNITED STATES TRUST CO.
NEW YORK, W. S.
making barb wire; it may be that a little more perlileverance on the part of defendants would have developed for them an enterprise most profitable to all parties. But from their stand-point, and at that time, it must be affirmed that they acted prudently and in a business way. They were business men, not machinists or inventors. They invested their money on the faith of what he could do with his machine. They waited 13 months, and over, and he was still unable works. True, he continued his assurances of coming to do success, but "hope deferred maketh the heart sick." To have continued the experiment longer would have demonstrated that they were men who lived by faith and not by works. In one month and ten days their time for retreat would be gone. Thereafter they would have to divide their money with him, while he would only share with them this as yet unsuccessful machine. Prudence commanded what they did. Hence the complainant has failed to make out his case, and his bill must be dismissed at his costs. It seems that 65 shares of stock weI'e in fact and as an accommodation issued to complainant. Hence defendants' cross-bill must be sustained, the stock ordered canceled and surrendered on delivery of machine, and complainant barred of all interest in other property of the company. As to the $2,000 advanced to complainant, I think, under· the contract, it belongs to him, and no accounting or recovery is ordered as to that.
UNITED STATES TRUST Co. OF N. Y. v. NEW YORK, W. S. & B. Ry. Co.
n. New Jersey.
July 22, 1885.)
RAILROADS-REVENUES-PAYlIIENT OF CLAIMS.
Claims for equipment and supplies furnished on running account and under continuous contract, held payable out of net income; following Burnham v. Bowen, 111 U. S. 776; S. C. 4 Sup. Ct. Rep. 675.
On Petition of the Pintsch Lighting Company. A suit to forec lose a mortgage on the West Shore Railroad was brought in the New York supreme court. Receivers of the railroad were appointed in New York. At the same time a bill was filed in the United States circuit court in New Jersey to foreclose the same mortgage, and the same persons were appointed receivers of the railroad in New Jersey. The greater part of the line of the railroad was in New York, and its princjpal office was there. On June 30,1885, a petition was filed in New Jersey by the Pintsch Lighting Company alleging that on March 27, 1883, they entered into a contract with the railroad COIQ.pany to erect gas-works on the terminal property, with connections and apparatus in the stations and ferry-houses, and also to equip and furnish certain baggage and passenger cars with and gas
lighting apparatus according to the Pintsch method. The petition then continues as follows: That they were engaged in erecting said gas-works from July, 1883, to February, 1884, and during that time, and afterwards down to the month of June, 1884, a few days before the appointment of the receivers in this cause, they were engaged in furnishing necessary equipment and supplies for the stations, ferries, and cars of said company. That they have filed a mechanic's lien, and have brought a suit thereon by leave of this court, for the sum agreed upon for the erection of the gas-works, and they have received payment from the company for certain items, and have received certificates from the receivers for the supplies furnished after the first day of March, 1884, but there remain four items of their account, not included in the mechanic's lien, which have not been paid. These are as follows: 1883. Nov. 7. Payment to Moore & Carr on Syracuse Gas-works ·8 261 37 13200 " 21. Discount 50 per cent. recredited .. 21. Equipping eight baggage cars '. 1,254 00 .. 30. Equipping eight baggage cars 1,254 00 $2,901 37 For which amount the said company gave your petitioners their notes dated May 9,1884: · $1,20000 One due June, 1884, for 1,200 00 One due June 16, 1884, for And one due June 23, 1884, for 501 37 Making in all $2.901 37 -That at the time these notes were given a general settlement of the unsecured claims of your petitioner was made by said company, and they paid all that was then due, partly in cash and partly in notes, without reference to the priority of the items in the account, paying in cash some of the later items and some of those accruing since the first day of March, 1884, and paying other recent items in notes which matured before the receivers were appointe1 and were paid, but giving these notes for those earlier items, and these did not fall due until after the appointment of the receivers, and were not paid. And your petitioners show and insist that these claims are for furnishing necessary equipment and supplies to the said railroad, which were essential to pntting it in good running order, and these items formed a part of a continuous course of dealings which was carried on down to the time of the appointment of the receivers, and that by reason of settlement on May 9th, and the payment of the claims in notes without regard to priority, these claims should be regarded as a new debt arising out of said notes, and are entitled to be paid among the recent debts of the railroad incurred for its equipment and preservation for the benefit of the mortgagees at whose suit the receivers were appointed. The petition prayed that the receivers might be directed to pay the claim in money or certificates. J. B. Vredenburgh appeared for the receivers, and opposed the pe· tition, but admitted the allegations of fact. A. Q. Kea8bey, for petitioners. NIXON, J. The facts set forth on the petition, and which are not controverted by the receivers, would seem to bring the application
KING 'IJ. OHIO &: M. R. 00.
within the principles that justify an allowance laid down by the supreme court in Burnham v. Bowen, 111 U. S. 776, S. C. 4 Sup. Ct. Rep. 675, and entitle the petitioners to an order upon the receivers to pay the claims out of the income of the road. If the road should have no income, after the payment ot the running expenses, as I understand the fact to be, it may be doubtful whether an order should be entered to pay from the corpus of the property. But I express no opinion upon this last point, but respectfully refer it to the New York court, where the receivers were first appointed, and to which all such applications should be made. The relations of this court to the main controversy I regard as of rather an ancillary character. An order will be signed directing the receivers to pay the claim out of . the income, but not out of the corpus except upon the order of the supreme court of New York by which the principal receivership was created.
and others v.
& M. R. Co. and others.
(Oircuit Court, D. Indiana. November 10, 1885.)
NEGLIGENCE-INJURY TO VESSEL PASSING THROUGH DRAW-PROXIMATE CAUS:&'
Former opinion, 24 Fed. Rep. 335, adhered to on rehearing.
Motion for Rehearing. Ferd Winter, for petitioner. Harrison, Miller &; Elam, for receivers. WOODS, J. For statement of case see original opinion, 24 Fed. Rep. 335. The motion for rehearing is predicated mainly on the proposition that the failure to open the draw of the bridge was not the proximate cause of the injury. It is insisted that that cause was the breaking of the boat's chain. That this was the direct and immediate cause there can be no doubt, and unless that breaking was attributable, proximately, to the negligence or fault of the respondent the motion ought to be granted. It was held on the former hearing that the managers of the boat were not bound to anticipate the breaking of the chain, and it i9 now insisted that the keeper of the bridge likewisEf had a right to suppose that the boat's machinery was in good condition, and sufficient to carry the boat safely to the Illinois shore. This argument tends to deny the negligence, rather than to show that it was not the proximate cause of the injury. It seems to me, however, to be fallacious in assuming that the conduct of the bridge-keeper and that of the managers of the boat must be viewed from the same stand-point, and that each was in this respect entitled to act on the same presumptions. It will not do to say that the latter had a right, either purposely or negligently, to keep ,the draw closed, on the supposition that the boat