It, is: insisted that the relation of the complainant and defendant bank was that- of principal and agent; that the complainant bank, by its instructionsto'collect and remit, never by any implication, to st8.n.d on any other than a strictly fiduciary relation; and that such relation is a different one, and one of higher trust, so to speak, than the relation of a depositor or other debtor of the bank. We have seen that the authorities do not sustain this distinction as a ground for a preferepce in the distribution of the general assets of a broken bank; and, upon prin-ciple, can such a preference be:mliihtained? It is'common, business for banks to employ eac'n other as collection agericies; and they perform this duty in no exceptio'h8.J. way, but itithe same manner in which they do the general busineesof the bank. A bill is collected by 8 bank, and the proceeds mingled with the general assets, so as to be entirely undistinguishable, and with no ear-marks Or means by which it can be identified or traced into any new investment. The bank breaks. Now, on what prinoiple does hestand on other, or higher ground than he who l with faith in the solvenoy of the bank,deposits his money and loses it? The contention here is not supported either by sound reason or authority. Another question is made and in the.case. It is that section 0236 of the Revised Statutes of the United States, in chapter ,4, in reference to the dissolution and receivership of national banks, stands in the way,of complainant's contention here. If, however, the views e:J!:pressed are correct, they are decisive of the cnse, and this question need not be The bill is dismissed, with costs.
NEW YORK t1. MARmTTA.& N. G. Ry. Co·· (IIu.WASSA
Court,· N. D., GeO'l'flfa. July 6, 1891.)
BBOlCIVll:R OJ' ,RAILROAD COliPANT-P.t1BO',IIA8.
o:r ROLLING STOOL Where the property of a railroad company is placed in the hands of a receiver, and rolling lltock is found on ,the raUroll.d, plll.ced there1>;V another corporation, the : principal'stockholders in which are also controlling- stockholders in the railroad company, and the rolling stock is olaimed by the corporation placing the lame on the road, and no contract of sale is shown, held, that the receiver should be authorized to purchase the same and pay the value of the rolling stook when the property went into the receiver's hands.
Bu&r, Still/rnan Hubbard and .H. B. TompkinB, for complainants. Burton Smitll., for intervener.
NEWMAN.' 'J. When the Marietta. & North Georgia Railway was placed in the hands ofa receiv'erbyorder of this court there w8S'ontbe
Bill to foreclose a railroad mortgage.
l.Reversed in oirouit court of appeala, 48 Fed. .Rep.
CENTRAL TRUST CO. OF NEW, YORK tI. MARIElTTA &: N. G. RY. CO.
road a considerable amount of tolling stock, and as to certain engines and cars the Hiawassll. Company, by intervention, brought a claim of ownership. The evidence shows that the manufacturers of the engines and cars sold the same to the Northeastern· Improvement Company. The contract between the manufacturers and the Northeastern Improvement Company was a conditional sale, the manufacturers reserving title. There was some question as to execution of papers and record, but that is immaterial here. There appears to be a balance of purchase money on two engines due the makers of the same, which will be controlled and protected in the decree. The rolling stock in question was jound, as stated, on the Marietta & North Georgia Railway when the receiver of the court went into possession of thesama. It waS placed on the road by the Northeastern Improvement Company. No contract of purchase by the railway company was eVer made. It was simply placed on the road by the improvement company, without contract whatever with reference thereto. George R. Eager was the contractor to build the Mariettll.&North Georgia Railway. He was the president and interested in·the Northeastern Improvement Company. While not himself an officer of the railway company, he and his frien:ds, he states,controlled a majority of its stock. Jt.appears further that the E:iawassa Company was in some wayan offshoot of the Northeastern Improvement Com pany. When the special master, in a former report made to the court, reported in favor ofthe Hiawassa Company as to its ownership of this property, and recommended, as the property was indispensable to the operation of the·road,the purchase of the same by the receiver, the court, of the above-stated facts as to Eager's relationship to the corporation in interest, and his further relation to the matter as contractor to build the road, referred the question backto the special master for a thorough investigation and report as to the relation of these corporations to each other, and Eager to them all. The second report madeby·tbe special master, now under oonsideration, finds nothing in the alluded to and the relations of the parties to affect the honesty and fairness of the transaction. He finds them to be distinct persons in law, and the evidence taken by him sustains this view, and shows that, while Eager occnpied the relation stated to all the corporations, careful accounts w61'ekept between them as to all their dealings; and,. so far as can be ascertain:ed, shows that the legal principles·applicable to different individuals under the same circumstances should be applied to parties in interest here. The question is, when rolling stock is placed upon a railroad without any contract whatever in reference .thereto, and the railroad allowed to use the same in its ordinary operations, is it a sale? If, from the facts stated, the delivery of this property amounted to a sale, it is conceded that the act of the legislature of Georgia of 1889, in reference to conditional sales of property to railroads, and record of the contract within six months in order to make it a valid contract as to third parties, has not been complied with, and the intervener here would have no other rights than that of a general creditor for the value of the property. v.48F.no.1-3
/" .. :
for the Central ·';frust Company, which' opposes the :oftbe intervenlilr, is that wherf! .rolling stock is placed on a rail. tpe railroad. proceeds toPse.:the same as its own in its daily business,.sel).Qing it from one railrtll!o!:Uo another, it implies necessarily an intent t9: sell; that,' the st<ilck becoming a parto! the railroad ellsential tl),if,IJ\operation, no of bail. ment wHl\>e implied, but acpntraQtQf sale. The superintendent of the tbe rolling stock in question was placed on the same, who is n()w;1"eceiver of the court,. testified before the special master that none of this property to the railroa\i, and Eager testified that it belonged to the, NorthMstern Improyewent Compll,ny until it was sold by it to CP11tlpany.To. hold that this property is the prop· erty of the railway company/iUs necessary to .do it upon the presump· tion arising<fr:omdelivery and pl)ssession, as stated above. No price ",as ever :tlle ,railway company and any one else as. the. seHera . Noagreernent was ever made On the part of any buy the, ll&Ql;e. .The tl'aQsaction lacks those essential. eleof its as there is to throw light on the sub. menta of IIBll.le; lUld the:i!3ea of any intent to sell or to purchase. The jeot I thi,nk Central Trull!t ,Cllmpany,the :trustee fot' the bondholders under the mort. that its mortgaf1;e,. which embraces nob only, in, existence at the time, but after. acquired as wellj,bas attaGhe.dto the rollings:tock in.question, and. by its.cpunllel the foregoing objElctiQns were presented.. The lien of the; GQll1donlyattaQh ,to property :by. the railroad, . 'and some title must yoest iQ. tbe l'l1ilway(lompanyof course, in order that the mortgage cover it;· I unable to find any such title vested in the railroad, under the facts, and presumptions that arise. from factst,a!:! .would .meto hold that any tiV1e Aa.s been acquired by the railrolld company to this property. The spep'ialmas.terhasl' in :.his secQnd report, found the value of the. property at the .time the railway went into the .hands ora receiver, and reportB thatas a propel' amollnt tQ be paid by the receiver for the same. the views of the court ,as to the time, This repol'tiflin and manner of tindingtb;e amount to be paid for this property by the receiver on the purchase:ofthe same,. which it is conceded is! necessary in order toQarrY on the operations of the railroad. All the.exceptions must be overruled, .and the repol,'t confirmed·.
. , ·I '
(0#c1iU Oourt,N.D. Georgia. Jilly 6,1891.)
A bill to to reconvey to plaintift land which formerly longed to him is not demurraDle for want of equity from the mere fact that it ,shows that plainUff<conve}'ed the ll\Ud to C;. wllo ,then conveyed to defend. ants, where pll\intifY 8116ks rehef on the ground tbat defend,ants seoretly employed and paid C. to purchase the land, knowing at the time tha't' he wall plaintiff's agent to sell, and that pll\inti1!, relied on him for informal;ioliand advice as to the vwue of the land. , 'l'he billwleged thattbe land was of great value for the phosphate therein; tbali defendants stated to C. tll,at they did not want to buy the land for phosphate purposes, Which statement C. repEjil;ted to plaintiff; and that defendants knew this, statement was not true, but theIr object in making it was to deceive plaintiff as to the ,true value of the land." He/il, that these allegations are sufticienl;, as against 1\ demurrer, to show that defendl\Uts knew of C.'s atatements to plaintift, and caus8cHhem: to be made. ' " ,
REPRESEN'TATION8. ' '
.· There is no lack .show:n on plainti1r's part when the bill 811eges that those transactions did· not come to his knowledge until October, and the suit is , brought in November. , , Faiiure to allege tender of the purcha!le moneybeloresuit is noUatal to such bill. where it dlleswlege thaI; tender was not made becausspla1nUff believed iii would be uns:vaillng, and that he is. readytq'Tepay the money w:il;h lnl;eresl; upon I;he exe-; cul;ion of a deed to him bY defendants. The bill is nol; demurrablE! for non-joinder of tbe agent, C" who is a resident of a differenl; ,disl;rict from' defendants. Rev. St.. § 787, provides that non-joinder of parties who are nol; inhabitanl;s of nor found within the district shall not constil;utemal;ter of abatement, though the judgment rendered shl\ll not conclude them, and Equity' Rule 47 authorizes the court to proceed without parties, otherwise necessary, who cannot bejoilled becau8e I;hey are out of the jurisdiction of the court..
011 ANOTHER DISTRICT.
BRIJ1GING SQlT. ,
4. SAME-',['BNi>E_ExouslNG FAILURB.
InEquity. On demurrer. Bill by Charles' H. Gross against the George W. Scott Manufacturing Company and the De So1o Phosphate Mining Company to compel a reconveyance of land. Bisby & Rinehart, for complainant. Candler, 'flwm8on k Candler, for respondents.
NEWMAN, J. 'The case made by the bill is substantially as follows: Charles H. Gross, complainant, is a citizen of the state oCPennsylvania. The George W. Scott Manufacturing Company and the De Soto Phosphate Mining Company, defendants, are corporations organized and eX.. istingunder the laws of the state of-Georgia, and citizens of that state. That complainant was in October, 1889, the owner of certain lands on Peace river, in the state of Florida. That one John Cross, a resident of the state of Florida, had been continuously for several years prior thereto, and was' at that time, complainant's agent to protect and make sales of said lands ; under a general contrllct, he received 10 per cent. of the proceeds of the sales, when other terms were not specia.llyagteed upon ;8.nd thatcomplainaht relied: upon said Cross in these respects. That about the 7th day of October. 1889, CrOS!'