CENTRAL TRUST CO. OF NEW YORK fl. MARIETTA & N. G. RY. 00.
865
ment of the purchase price should be fully made, and that the North Georgia Improvement Company has not paid the entire purchase price, some $5,500 of the original $22,500 being still due and unpaid; and the appellee, Groome, shows a written contract for the resale of the property to him by the North Georgia Improvement Company, made since his first intervention claiming the rolling stock in controversy was filed. The case is, however, to be distinguished from the Hiawassee Case in this: that Groome was not charged with any notice of the equities existing in favor of bondholders as, against Eag,er ,or the North Georgia Improvement Company, and he made a conditional sale of his property, ,t4e title thereto to the North Georgia Improvement Company, who transferred it, without paying the full price, to the Marietta & North GeorgiltRailway Company. We think it is clear that the appellee, Groome, has never forfeited his rights under his original contract, and that he is now entitled to a return of the property, or to the payment of the balance of the price still due. We do not think that Groome took anything by the contract with the North Georgia Improvement Company' for the resale of the property, as that company (as we have seen in, the Hww(UJ8ee G'aBe) was estopped from setting up title against the bondhold': ers. ' As the master reported that the use of the rolling stock in question was neCElssary to the operation of the railway in possession of the receiver, the receiver should pay the balance of the purchase price still On the other points involved, due to appellee, or give up we will hold as in the Hiawa&ee case. It is therefore ordered and adjudged that the decision appealed from be reversed, with costs, and that' with instructions to enter an this cause be remanded to the order receiver to pay, within 15 days from date thereof, the balance due to intervener, Samuel W. Groome, on his' contract for the sale to the North Georgia Improvement Company ofihe rolling stock described in, his· intervention; and, in case of inability to pay as directe,d, ,the receiver shall, deliver the property.
TRUST
.Co. OF NEW YORK 1.1. MARIETTA & N. G. Ry. Co., (JACKSON & WOODIN MANUF'G Co., Intervener.)
(C1Ircuit Court of Appea'lB,Fijth Circuit. December 7, 1891.)
1.
ll'ORBOL08UREOJ! RAILROAD }{ORTGAGB-CONDITIOIUL
A railroad company issued eqUipment bonds, and executed a mortgage to secure the same" covering" all after-acquired" pr0.\lerty of the compauy. Afterwards an improvement company, interested in tbe railway company, purcbased certain rolling stock from a company, whicb, by the contract of sale, l'etained title to the rolling stock untiltbe purchase price thereof should be fUlly paid. The rolling stock was then fumished by the improvement company to the railroad company, under an agreement· by which the improvement company undertook to eqUip the railroad company. HeUl, in a suit to foreclose the mortgage,that the ear-building company, having no notice of any equities in favor of the holders "f the railroad company's bonds against the imprpvement company, arising out of the eontract of the improvement company to eqUip railroad ill order to enable Uta
OJ! VENDOR.
v.48F.no.11-56
866
r:::DERAL REP,oRXER,
vol. 48.
issue such bonds, was.l)ot estopped to intervene and assert its title to the rolllng stock in question, and was entitled to the possession of so fuuoh thereof as it had furnished to the railroad company. . 9. o
o'
to be made to the owner or operator ofa railway withinthe.state of Georgia, with ,l'l'8ervation of title, and such to be within six months , after execution, has no application to suoh'acontract, made before the passage of lIuch act, by two foreigil oorporations, outside of the state, for the sale of rolling stock to be used within the state, neither corporation being the owner or operator railway in
SAME-RECORDING CONTJ\ACT Oil' SALE Rl!lSERVING TITLX-QPljlBATION Oil' STATUTE. Laws Ga. 1889, p. 188, validating contracts for the sale rolling stock made 01'
at
from the Circuit Court of. the United states for the Northern of Georgia. ., .. . . Bill ineguity by the Central Trq.st.Co1Dpany ofNew York against the Marietta.&I: North Georgia Railway Company to foreclose a mortgage railway company. The' Jackson & Woodin Manufacturing, Cm:ppll-ny intervened, claiming title to certain rolling stock in the ,of the receiver appointed in the auit. Decree for intervener.' Affirmed.. LaWl:l,G/l.. 1889,p. 188, vahdatesaales of rolling stock made or to be railroad ¢ompanyor perSon owninp; or operating a railTmid in this ,state," with of title., and providesthat such contracts In!!-d6.pi-ior to the of the act shall be recorded in the county of the state of Georgia in which is situ'ated the principal office of the com': pany within six months after the pasilage of act, and that such made after the passage 'act shall be so' recorded within six months after their execution. ' 0 ' . , '
BY PARDEE, J.
The facts, of the Case, and the exceptions relied\lpon by the appellant, are sufficiently stated in the master's as ," the Jackson &; Woodin Company sold the North Georgia Improvement Company and t"venty 8-wheel boxcars, for which it received thirty-four notes, dated August 1, 1890, and due 8S follows: One note payable Dooember 1.1890, and monthly thereafter, until September 1, 1893. The aggregate amount,of thirty-four notes is twenty thousand five hundred and eighty-nine dollars and four cents, ($20,589.04. ) 'fhere was also another note given by said North Georgia Improveon accollnt.ofs8i<l pur9hase, due August 26, 1890. for five, thousand eig!.t hundred and dollars sixty'':two cents, making a total of $26,418.66. I have added to'thiS aggregate amo(lnt six per cent. interest on notes, and deduct,ed frolll the llggregate amount six per cent. interest from those not drie. and I find the principal and interest due on said notes, ApriJ 7, 1891,)s .18. I fiudfrom the proof that the North Georgia Company. beingl1nable to pay any of said notes, relinquished all chtiui', upon said property to the intervenel',tlte said Jackson &; Woodin Manufaoturing Company. I further find that the said No.rthGe. . Jmprovem.' ent.Companydelivered said.l1fty .cars to the. ari. etta & North Georgia CompllPy"and that said. afty cars are no\y in the posspsBion oLJ. B·. Glover, receiver of. the Marietta & North Geoi-gia Railway.Company, and.8re.. ln daily use in the operation of said 1'0ad.'1also l;illd that tl),e title to the said fifty cars is still in the intervener, the said Jackwon &I Woodin Manufacturing Company, and they areelltitled to possession 0. OM.
"I' ·
CENTRAL TRUST CO. OF NEW YORK V. MARIETTA & N. G. RY.
co.
867
of same. * * It the Central Company of New Yor.\{ that the intervj:lnerll whatevel' upon the'eqliipment set forth in their petition anc,l.iniflrvention 8,uperior to now being foreclosed in this court, because said equipment was sold and deli vered in the year 1889 under a verbal contract made for said equipment With the interveners by George R. Eager, as president of the N:orth Georgia Improvement Company, and that said Gel?rge R. then caused said equipment to be delivered to the said Marietta & N:orth Georgia Rail way Company, which lastnamed railway company, in the year 1889, took possession of said railway eqUipment, without an understanding, either verbal or written, that any title or l'ight or claim was reserved in said equipment by said interveners. The: Central 'trust Companyturther contend.that at the time smdequipment W8$, deliver.edto said rllilwaythesaid George R. Eager was under contract to and equip said line of rail way, and that he delivered Said equipment to,said rail way, as he was in duty bound to do, under his said contri,Lct. The evWence shows that sai(l NUipment was sold to tIle North Georgia Impi'ove!'nent Company some time in the spring of the year 1889; that the ne;. gotiations for the sale of said eqllipmentwere had between said interveners and George R.Eager; president of the N:orth Georgia Improvement Company; that it was distinctly understood at:lhe time that the title to said equipment was tor,emain in the interveners until it was fully paid for; and that as an evidence of this fact each was marked on a plate with the followin!{ in· scription: ·M. &; N. G. Hy., Jackson & Woodin Mfg. Company, Berwick, Pa., Was paid on said equipment at the time of the purchase. and nothing has been paid on it since. Afterwards. to-wit, on the 1st day of August, 1890, a written contract of lease was made between interveners and N:orth Georgia Improvement Company, by which said contracttbe interv;pners we.re clearly recognized: and admitted to be the owners of said equipment, and were to continue as such owners until said equipment Was fully paid for. Upon said contract of lease is an agreement with Marietta & Georgia Railway Company to act as bailee for the Jackson &; Woodin Mfg. Company of said cars, and to do all in its power to carry out the contract made between Jackson & Woodin Manufacturing Company and the N:orth Georgia Improvement Company. This contract. with the above-stated agreement indorsed on it, was duly recorded October 29, 1890, in the clerk's office ofthe sllperior court of Cobb county. The mHster is of the opinion that the verbal contract made between the N:orth Georgia Improvement Company and the Jackson & Woodin Mannfactnring Company was good as between the parties to it, and it does not appear that anyeqnities have arisen as to third parties. The master is also of theopinion that the Mariptta & North Georgia Company had possession of tbis rolling stock llnder.the written contract of bailment, as above statt-d, and that, even before said written cO!lthict of bailment was made, said railway company held said stock as bailee, and that, therefore, the general mortgage given to secure the payment olthe bonds'did not attach to saidrolling stock. The masttlr, thprefore, finds and. reports that the interveners, Jackson &; Woodin Manufacturing Company, haVe a valid claim to said rolling stock, and are entitled to its possession. The North Georgia Improvement Company, subsequent to the lilinll of this intervention, executed to the Jackson&; Woodin Manufacturing Company a relinquishment to all of this rolling stock; but. as the evidence shows the .Jackson & Woodin Manufacturing Company have never been paid anything on said rolling stock, the master thinks their claim is valid without relinquishment. As to the contention of the Central 'Trust Company that George R. Eager was uuder contract to equip said railway with rolling stock, master rppeats his opinion in theinterventioll of the Hiawassee Company, that the evidence does not sustain this position. But, even if it wel'e true
*
868
FEDERAL REPORTER, vol. 48.
that said Eager was to equip said railway, it could not affect the right of the intElrveners to recover their property; as nothing has ever been paid, and as it was' placed on the railway with the distinct· understanding that it was to rexhain the p;operty of the interveners until fully paid for. It
H. B. Tompkins, for appellant. HokeSmith, for appellee. Before PARDEE, Circuit Judge, and LOCKE and
BRUCE,
District Judges.
PAR,DEE, J. We donotthink it or analyze all the evidence, nor to pass upon all the excep,tions and assignments of error with which the record teems, .because it is clear that appellee never parted with the title and oWilership of the property sued for; that it hadt;lo notice, and is charged with none, oithe equities claimed to exist as between Eager, contractor, and the bondholders of the Marietta & North; Georgia Railway Company, in regard to rolling stock furnished said railway company as a preliminary to the issuance of bonds; that the contract or conditional sale between appellee and theN-orth Georgia Improvement Company was made outside of the slate of Georgia between two foreign 'corporations, and is not affected by the Georgia law of 1889 relied upon by appellant, Qowever the Same irtay be construed, particularly as the contract was made months before said law was passed, and neither .one of the parties thereto was the owner or tbe operator of a railway in the state of Georgia, and that the appellee is entitJed to the reof its property or to payment for the Same. We are satisfied there is',#o the decreel'endel'ed in tbe 'court below prejudicial to the appellant! and it is theteforeaffirmed, with c,osts. .. . I
CENtrRALTRUST Co. OF
NEW YORK v; MARIETTA &N. G. Ry. Uo., (GRooME, Intervener.) F(fth
December'l',1891,.}
Oll' RAILR()AJ.)· DITIONll.dSALE-RIGHTS 011' VENDOR,
ok AFTER-AOQl11RlIb'
Eiring,"all after-acquired" as well as property of the railroad compan,Y. which, was duly rec9rded. 'l'hereafterthe rl/.ilroad company purchased certam 'cars car-builder, under an agreement by which the car-builder retained title cars until they should be fully paid .for, which agl'eement was in writing, bllt:Was never recorded. :In a suit by the trust company tl) .foreclose its mortgaga the ,car-builder intervened,claiming the cars under his reservation of title. . trust company was not a third party, within the meaning of Code Ga. In955a, (Laws 1881, p. 143;) providing that, in order to retain title to personal property sold and delivered, as against third parties, "title must be reserved in 'writing, and the paperquly execllted and recllrded as a mortgag"" on personalty, " and tb.at the trust com",any could derive no advantage from the car-builder's failureto record'his reservation'oftitle, as the act was intended onry for the benefit of .subsequent purchasers arid crEiditors of the vendee. ,
.!\. railroad company issued 'bonds secured bya mortgage to a trust company cov-
9.
SAME-CciNSTR110TION OF STATUTE.
Nor, in such case, were oft.he. car-Puilder affected,.as againBt.the trust ,company, by 1889,p.lil!l. vfUidating conditional sales of rOllin,g's:to,ck to
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