EASTERN TOWNSHIPS BANK II. ST. JOHNSBURY & L. C. R. CO.
thereof in case delivery of possession cannot be" had, at the of $4 per cord, amounting in the aggregate to the sum of $5,200, lawful money, and for costs, and it is 80 ordered.
EASTERN TOWNSHIPS BANK
& L. C. R.
D. Vermont. November '1, 1889.)
SJ.ME-GU..U tANTY TO PAY INTEREST-CONSTRUCTION.
SAME-NEGOTIABILITY 011' GUARANTY.
Although the bonds and coupons are negotiable, the guaranty is not, it being neither a bill nor a note, which. instruments aTe alone negotiable under R. 'L. Vt. 552002,2008, and the guarantor may make any defense to an action on his contract by the transferee of the bonds or coupons that he could have made if sued by the original payee in the bonds. . .
Dickerman Young and Albert P. Or088, for plaintift. Stephen O. ShurUeff and Rii;hard Olney, for defendant.
in taking a lease of the railroad of the Canada Junction Railroad Com,.
pany, not built, but agreed to be btiilt by Bradley Barlow, and in the execution of this guaranty upon 150 $1,000 negotiable bonds of that coliipany, which Barlow was to have in payment for building the road: value received in the use and operating of tbe Canada Junction Railroad under a lease thereof and assignments of said lease, the Montreal, Portland & Boston Railway Company, the Southeastern Railway Company of Canada, and the St. Johnsbury & Lake Champlain road Company of Vermont, do hereby jointly and severally guaranty the payment of the interest upon the within bond, as specified in the interest coupons thereto attached at the place and at the several dates therein specified," The rent was equal to the coupons, which were them.,. selves negotiable, in amount and times of payment. The bonds; with the guaranty upon them, and coupons attached, were deliverlld to Barlow, and by him pledged to the Vermont National Bank of St. Albans, and by that bank to the plaintiff, to secure !lrclvances of money. Barlow failed without accomplishing but a small part 01 the building of the ;road, andbis failure caus\il4 ,the enterprise of building the· road, ll.Jld the
The defendant joined with other railroad companies
Vermont National Bank, to fail. The road has never been built, and through the failure· and default of Barlow, the defenuant, with the other railroad companies, has been deprived of the use and operating of it for which the guaranty was made. This suit is brought by the plaintiff, as holder of the bonds and coupons for value, upon the guaranty, to recover the amount of the coupons clue, and has been heard by the court upon written waiver by the partiesof a by jury. rhe defendant contends that the guaranty was WIthout the scope of its corporate powers, and therefore void; and relies upon ThQmas v. Railr()ad C6., 101 U. Rail'Foad Co. v. RaiJ,. road Co., 118 U. S. 290, 630,6 Sup. Ct. Rep. and Navigatirm Co. v. Railway Co., 130 U. S. 1, 9 Sup. Ct. Rep. 409, in support of this position; and that, "if not, the consideration has so far failed, through the default of Barlow, to whom the bonds were first delivered, that it has ceased to be binding. In those cases no power had been conferred upon the corporations in question, by their charters or the laws under which they existed, to enter into the contracts held to be ultra vires and void. The laws of 'Vermont, under which the defendant has and exeroises its corporate powers, provide that "railroad companies in this state mny make contracts and arrangements with other, and with railroad. corporations incorporated under the laws of other of the United States, or under the authority of the government of Canada, for leasing and running the·roads of the respective corporations, or a part thereof, by either of their respective companies." R. L. Vt. § 3303. This statute conferred ample power upon the defendant corporation to take the lease, and to agreeto pay the rent as it should fall due, and doubtless to arrange for paying ,the rent, by paying coupons of the same amount or guarantying their payment.. Railroad Co. v. Railroad Co., 34 Vt. 1, 50 Vt. 500; Langdon v. Railroad Co., 54 Vt. 593; Hazard v. Railroad Co., 17 Fed. Rep. 753; To hold these arrangements to be within the corporate powers of the defendant appears to be in accordance with the principles of, and not contrary to, the decisions of the supreme court of the ·United States referred to. The laws of the state also provide that "a railroad corporation, if it so votes at a meeting of its stockholders called for that purpose, may issue its notes or bonds in sums not less than one hundred dollars to raise money or to extinguish any debt or liability of the corn pany ,. on time not to exceed thirty yelus, and at a rate of interest not to exceed seven per cent." R. L. Vt. § 3350. In a class of cases absolute guarantors of payment of promissory notes by indorsement upon the notes themselves have been holden as makers. Hough v. Gray, 19 Wend. 202; Miller v. Gaston, 2 Hill, 188; Edw. Bills, 220. These guaranties are not upon the coupons, strictly, but upon the bonds separate from the coupons. If, however, they should be considered as being upon the coupons, so that each coupon would be a note of which the defendant was maker(thestatute would not cover them, but might impliedly exclude them as notes of the defendant, because each one is less in amount than the statute allaws. To hold the defendant to be a guarantorof the 'interest on the bonds, instead ·of a maker of the coupon,
EASTERN TOWNSHIPS BANK V. ST. JOHNSBURY &: L. C. B. CO.
seems to be most consistent; for the parties are to be presumed to have intended that this contract should be p;ood rather than void; The undertaking of the defendant as it stands on each bond is to he construed in view of the circumstances apparent to all· under which it was entered into. The road was to be built before the use and operating could be had. The value received in the use and 0perating- acknowledged was to be received afterwards, before the respective installments would fall due. The meaninp; of the contract seems to have been forthe use and operating of the road the defendant and the other com. panies would see the interest paid. They assumed that the road should eam enough to pay the inter.est as it should fall due, and that the eamr ings should be applied to the payment of it, if not paid othe.rwise. The consideration was future, and if it failed the agreement would fail for want of any. The guaranty named no par-ticular person as guarantee, but was open to whoever should aC'luire the bonds first. Watson v. McLaren, 19 Wend. 557. Barlow was the first to acquire these bonds as holder. Had he kept them he could not have enforced them, as to either principal or interest, against the maker; for they were made and delivered to him forbullding the road, and when he failed to do that the consiqeration failed. Relief of the maker would relieve the guarantor. This consideration as to the maker rests upon the supposition that the instruments,although under seal of the corporation, and i.n form and name bonds, are simpIe eontracts, whose consideration may be inquired into. If, however, tbeseals conclusively import consideration for the bonds, as such, in respect to the maker, the guaranty is not under seal, and is unquestionably a mere simple contract. The consideration of that whi(\h was expressed to be the use and operating the road, and different from that of the bonds, has failed also through the default of Barlow. He could not deprive the defendant of the consideration of this contract and at the same time enforce it. The plaintiff is not entitled to recover upon this guaranty unless it has some right superior to Barlow's. The only source for s\lch right is the supposition that the guaranty had the qualities of negotiable paper, and was current for,what it appeared to be to those taking it, without notice of infirmity, for value. The bonds and coupons are expressly negotiable. The guaranty is not by its own terms made to be so. .The negotiability of the instr.uments with which it is connected does not appear to be sufficient to make it so. The statute declaring negotiability of bills and notes, taken from that of 3 & 4 Anne, c. 9, qoes not extend to any other instrument. R. L. Vt. §§ 2002,2003; Edw. Bills, :219. These contracts, made by those not parties to the notes, are not generally understood to partake of the negotiability of the instruments on which they may be placed. Taylor v. Binney, 7 Mass. 479; True v. Fuller, 21 Pick.140j Wat$on v. McLaren, 19 Wend. 557; Millerv.qaston, 2 Hill, 188; Story, Prom. Notes,§484; Sandfordv.Norton, 14 Vt,228j Syrve8tcr v. Dmoncr, 20 Vt. 3.55. Especially must this be true where, as here, the of the instrument upon which the guaranty is placed is not included in the gU\lranty, and the guaranty expressly rests upon
separate consideration. This guaranty appears from all these considerations to have haena mere simple contract with Barlow collateral to the bonds; whose character was apparent'upon its face, and whi ch could not be enlarged or made more indefensible in the hands of subsequent holders, with or without further and whether for value or otherwise. 7TustCo. v.Bank; 101 U. 68.; ,The Vermont National Bank acquired all the rights that Barlow had to the bonds and coupons, with the guarantyon the bonds, including the right to enforce the guaranty in his name so far, a:nd 'sO far only, he could enforoe it for any purpose. The plaintiff took ihe same rights,anu' does not now appear to have in any manner acquired any greater. No vip-wof these instruments is presented, or presents itself, upon which the plaintifl'appears to be entitled to recover in this case. The judgment here must therefore be for the defendant.
OENTRALTRusT,' . 'oFN:il:w! r . eo. ,'
YORK: fl. " :', '
LOUIS, A. &; " ,'.,'
T.Ry. · .. '
RBCJlrVuBlI...:AOTIoXB AGAINST':"'SE'BVnlJlOP 1'J:r,OOESS.
AotCong. MatQh 8; 1887, M:2,8, SI;. 554,) provide that receivers in pO&session of property shall it accOrding to the laws of the statewherEllt is situated, and maybe sued'wlthouUeave of the 'court by whom they were appointed. 'J,u Arkansas l!8fv1ce of prOMIJ8 o,n;the or stationageut of a raUroQll company is good ,serviqe on the company. that, wbere' receivers of a railroad running through ArkaIisas, who welle appointed in tbat stllot(l, bad removed Into another to be in the state courts of Arkansas by sernce .on tJ;leir station agents or clerke therem. , ' '.'., .,,'
Equity. Application to establish validity of service in suits against ), , ; ,receiV'el's.' ,'Thedefendant company owij.and operated a railroad, beginning in .Missouri, and running across. the of Arkail'sas into Texas. On a 'bill for foreclosure,filedby theitrusteesof the mortgage bondholders in Jthe 'eastern district or'Missouri, Il. receiver was appointed, and upon a 'llke bill filed in this district the same person was appointed receiver in 'this.district, 'lilid afterwards a secohd receiver was appointed 'to act jointly with the' first:. 'The repeivers their office in St. Upuis, Mo· . to !h,e Arkansas'that 'persons having claims receivers which they refused to allow were prevented from es:t;ablishing justice of their claims by suit in. the ,s'tate courts', because 'personal service of the stubmons cbuld notbeb'ad ori the receivers, and the validity()f' on tlieihtatlon agents was disputed." '"
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, as abcve.) Airecerit con' ".. ..,. .' . gt'essconfuipll WeseprOvistonll:' ' . , any .cause iq' ahy court of the United 'States,there tie a'receiver or manager in possession of' any property, 'such recelver'Of"tilal1aget'&hilll mBnageand propertyaceording