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can be adopted than one which requires that this loss the law of the case: “(1) Abutters upon public streets should be fully repaired; that the injured party in cities are entitled to damages sustained by them by should be made whole by having restored to him, as reason of a diversiou of the street from the use for far as this may be done in money, what he has lost in which it was originally taken, and its appropriation to the depreciation of his property by reason of the new other and inconsistent uses; following Story v. Railburdens to which he has thus been subjected ?
road Co., 90 N. Y. 122. (2) An elevated steam railroad It seems clear to us that this rule of recovery was in the streets of a city, as usually constructed, is a perwithin the legislative intent when it was provided version of the use of the street from the purpose origthat “every company which lays a track upon any inally designed for it, and is a use wbich ueither the such street, alley, road, or ground shall be responsible city authorities nor the Legislature can legalize or for injuries done thereby to private or publio prop sanction without providing for compensation for the erty lying upon or near to such ground,” etc. This injury inflicted upon the property of abutting owners; view is supported by Railroad Co. v. Ball, 5 Ohio St. following same case. * * * (5) In an action by an 568; IIatch v. Railroad Co., 18 id. 92; Dodson v. Cine | abutter to recover for the injury to bis premises caused cinnati, 31 id. 276; Powers v. Railway Co., 33 id. 429; by an elevated railroad built in front of them, damRailroad Cro, v. Cobb, 35 id. 94; Railroad Co. v. Wil ages can be recovered on account of the gas, smoke, liams, id. 168 ; Railroad Co. v. Mowatt, id. 284; Rail steam, dust, cinders, ashes and other unwholesome way Co. v. Lawrence, 38 id. 41; Railway Co.v.Ilamble substances emitted from the locomotires.". ton, 40 id. 496; Cohen v. Cleveland, 43 id. 190; Grafton The exceptions to the instructions given to the jury v. Railway Co., 21 Fed. Rep. 309. The latter case is upon this subject were not well taken, aud the assiguimportant from the fact that it is reported by an emi ment of error thereon is disallowed. nout jurist, Mr. Justice Matthews, who was coustru 2. Did the trial court err in the admission of eviing the statute now before us. He says: “In au ac dence upon the subject of the damages sustained? The tion by the owners of such abutting lots against the following questions were permitted to be asked and railroad company for damages, they are entitled to re answered: “State your damage by reason of the railcover full compensation for the depreciation in value road being in Spruce street ?” “How much less per of their property caused thereby. * * * The stat. | year do you receive as rent for the store-room on ute must be taken to mean what it plainly says; and these premises, described in your petition, than before there being 110 sufficient reason to the contrary, must the railroad was built along Spruce street?” What be so construed that the railroad company, in the case difference is there in the value of this property with coatemplated, shall be held responsible for all injuries the track there and with it somewhere else?! of every description done by its work to the plain It is too well settled in this State to admit of controtiff." This construction of the statute also finds sup- versy that the rule of damages in such cases is the dirport in Adden v. Ruilroud, 53 N. H. 413, where it is ference in the value of the property affected before said: "Whatever tends directly and substantially to and the value after the location of the railroad, and diminish the value of the tract of land left to the that tbis is to be determined by the jury in the light on owner should be weighed and considered in determine the facts established by the evidence, and not upon ing his damages. That imminent and appreciable the mere opinions of wituesses, except so far as opindanger from fire does so diminish the value of his | ions may be received upou questions of value. Ruilproperty there can be no question. The location of road Co. v. Campbell, 4 Ohio St. 595, followed and apthe track, and all such matters as grow out of and are proved in Railroad Co. v. Ball, 5 id. 573. In each of caused by the looation, are proper matters for the jury those cases witnesses were allowed to testify to their to consider."
opinions concerning the amount of damage sustained, In Railroad Co. v. Combs, 10 Bush, 382; S. C., 19 and in each case this was held to be error, and the Am. Rep. 73, the court say: “If his houses are dam judgment reversed. The jury is entitled to be inaged by having soot, smoke or fire from passing en formed by witnesses concerning the value of the land gines thrown or blown into or against them, he is en: before, and the value of it after the location of the road. titled to recover for this also. The diminution of the | These are the primary facts which enable the jury to value of the adjacent property occasioned by these determine the extent of the injury. If it be concircumstances will be the measure of his right of re-tended that when a witness has stated what, in his covery."
opinion, is the difference in the value of the land be. In Railway Co. v. Heisel, 38 Mich. 62, the court say fore and after the location of the road, or how much (Cooley, J.): “In such a case his injury is not con | less it is worth after than before, he has substantially fined to making use of the public easement, but he stated the substantive fact to be ascertained, the obmay recover for any injury the incumbrance vious answer is that he is, by this form of inquiry, left causes;” and continues: “He may recover for an- to estimate in his own miud the amount of damages noyances to business or to family occupation which sustained, and give this to the jury as the difference the operations of the railroad company may cause." l in value. There is no assurance that he will, in mak
In Han v. Railway, 61 Iowa, 716, it was held, aftering his estimate, take into account the actual value giving the rule to be the difference in value, that “in before and after the location of the road; indeed estimating such damages, the obstruction of the there is no assurance that he may have an intelligent owner's view, interfering with his privacy, and the opinion of the value of the land affected, either before noises of operating trains, were proper to be consid or after such location. ered."
In Powers v. Ruilway Co., 33 Ohio St. 437, it is said In Railway Co. v. Eddins, 60 Tex. 656, the court say: ' by Day, J., in speaking for the court: “On the trial “Injuries resulting from sparks of fire from engines, one of the land-owners was permitted to answer, smoke, cinders, unusual noises from bells and steam against the objection of the company, the following whistles, and other amoyances of like character, are question, viz.: 'How much less value will your land proper elements of damage."
be in consequence of this appropriation?' Afterward These cases are in line with the manifest tendency substantially the same question was asked of another of modern adjudications.
witness on the part of the company, to which the In Lahr v. Railway Co., 104 N. Y. 268, the Court of land-owners objected, and the court sustained the obAppeals of New York was recently called upon to jection, but in so doing, at the same time, ruled out consider some of the questions involved in the case the answer already given by the land-owner, to which at bar, and unanimously declare the following to be he excepted. The ultimate ruling of the court in regard to the propriety of the question as asked on both circumstance to be considered by the jury in detersides would seem to be sustained by the holding in mining whether the track was completed before the Railroad Co. v. Campbell, 4 Ohio St. 583, and Railroad change or not." Co. v. Ball, 5 id. 568."
Judgment reversed and cause remanded. Here is more than an intimation that these two forms of question--one relating to amount of damage, and the other to difference in value-are substantially | PARTNERSHIP - REAL ESTATE - CONVEY. equivalent. But the form of question we are cousid
ANCE BY SURVIVING PARTNER. ing related to the difference in the value of the property “with the track there and with it somewhere SUPREME COURT OF ALABAMA, JULY 19, 1887. else." What other location of the track with reference to the property, and how such different location
Davis v. SMITH. may have affected its value, was concealed in the mind of the witness, so that his answer may have been a
Where articles of partnership expressly declare that the real
estate purchased with partnership funds and held by mere opinion upon facts of which the jury was not permitted to have the benefit. It was permitting the
the firm "shall be considered as part of the joint-stock witness to usurp the province of the jurors, and settle
and funds of the firm, and as possessing all the incidents
and liabilities of partnership funds and personal property, for them the ultimate fact which they were called
and hereby fully impressed by the parties with such inciupon to determine.
dents and liabilities," and these articles are duly probated Concerniug the question which involved the rents
as part of the will of the deceased partner, the deed of received, it is not easy to see how the jury could be
the surviving partner, though not executed for the puraided in determining the value of this property by
pose of paying the debts of the partnership, conveys a being informed how much less per year the plaintiff
perfect legal title as against the heirs of the deceased. received as rent after the location than before. The actual value of the rent was not necessarily involved
STATUTORY real action in nature of ejectment. in this question. If this inquiry was permissible, it The opinion states the case. would place it in the power of the plaintiffs, by private
W. S. Cary, for appellants. compact with the lessees, to fix their own basis of damages. Special reasons may have existed for letting
Troy, Tompkins & Loudon, contra. the property at an extremely low rate of rent, and CLOPTON, J. The land sued for was formerly the other reasons may have induced an extremely high property of the firm of Lyman & Davis, purchased rate; and all this without necessary reference either with partnerabip funds, and used for partnership purto the actual value of the property or over the actual poses. The partnersbip having been dissolved by the rental value. The question did not call for an esti: death of Davis, Lyman, as surviving partner, sold and inate of the actual rental value of the property, but conveyed the land, in May, 1876, in part payment of a simply called for a disclosure of the terms of a par firm debt, to Malone & Foote, under and through ticular letting, whicb may and may not have been whom the defendants claim to hold. The appellants, made with reference to the fact which the jury was to who bring the action, claim title as the heirs of Davis, determine. But even if the inquiry had covered the land defendants concede their right to recover, unless past and prospective rental value of the property, we the conveyance of the surviving partner passed the are met by the declaration of this court in Railway v. | legal title to the grantees. The solution of the ques. Railway, 30 Ohio St. 624, that “it is the difference in tion depends on the construction of a clause contained the value of the land, and not the diminished annual in supplementary articles of copartnership entered rental, that is to determine the damage," citing Am8- | into November 28, 1867, which is as follows: "That den v. Railway Co., 28 Iowa, 542. This case is cited all the real estate whatever, belonging to the said firm and approved in Pouers v. Railway, 33 Ohio St. 435, of Lyman & Davis (the same having been purchased where it is said: “The difference in the value of the solely with partnership funds), shall be, and is hereby owner's property with the appropriation and that considered as part of the joint-stock and funds of said without it is the rule of compensation. This differ firm of Lyman & Davis, and as possessing all the incience must be ascertained with reference to the value dents and liabilities of partnership funds and personal of the property in view of its present character, situa property, and is hereby by the partier fully impressed tion and surroundings. It cannot be enhanced by with such incidents and liabilities." proving facts of a contingent and prospective charac. To a better and clearer understanding of the purport ter, such as the probable rents that may be derived and intention of this clause, it should be siated that from the property,'' etc.
the partnership was originally formed in 1865, to carry In permitting the foregoing questions to be asked on a mercantile business in Selma. The declared purand answered, there was error, which calls upon us to poses of the supplementary articles are to provide for reverse the judgments below.
circumstances which had arisen and were not provided 3. The error assigned for the following charge of the for by the previous agreement; for the extension of court is not well taken: “And I say to you that the their joint business to manufacturing in Montevallo; track was completed whenever the defendant, or its 1 and in the event of the death of one of the partners, predecessors, put it in condition fit for permanent use for continuing the business for a limited period, and in running trains of railroad cars over it, and with a the final settlement of the affairs of the firm. By an view to permanently using and occupying the track instrument in writing, made by Davis, December 18, for that purpose in connection with the main line; | 1867, which he designates a codicil, it is declared that and the two years within which the action must be specified parts of the supplementary articles, being commenced, begins to run from that time." “ If after the provisions relating to the continuance and settlethe defendant, or its predecessors, had put the track ment of the partnership business after the death of in condition for permanent use, it deemed it neces. one of the partners, including the clause above quoted, sary or convenient to change, and did change the "shall be taken and considered as my last will and track, by moving and placing it on a part of the street testament, as to all matters and things therein conless injurious to the plaintiffs' property, the jury tained;” and both instruments were duly probated as would not be justified in saying, from the fact of the his will, which is conclusive as to their testamentary change alone, that it was not completed until after oharacter. Mattheirs v. McDade, 72 Ala. 377. the change was made; but the fact of the change is a By the settled doctrive in this State, the real estate of a partnership is in equity considered as personal, and it is now the settled rule in England, that when so far as may be necessary for the payment of the real property is purchased with partnership funds for debts, or for an adjustment and equal settlement be partnership purposes, the transaction, by force of the tween the partners. Upon the dissolution of the part contract, in the absence of a special stipulation, nership by the death of a member, the survivor is makes it personalty, effecting a conversion out and charged with the duty of paying the debts. To enable out. Darby v. Darby, 3 Drew. 495. The doctrine is him to discharge this duty, he has the right to dispose rested on the ground that by the contract of partnerof the real estate for this purpose. While his deed | ship all the firm property, real and personal, is to be will not pass the legal title, it will convey an equity, sold on a dissolution. This goes further than the through which the purchaser may compel the heir-at American rule, by which the real estate, not wanted law of the deceased partner to perfect the purchase for partnership purposes, to pay the debts, or to by a conveyance of the legal title which he holds in equalize the benefits and burdens between the parttrust to pay the debts. Andreus y. Brown, 21 Ala. ners, remains reaity, subject to all incidente, as such, 437; Espy v. Comer, 76 Ala. 501. In the case last cited in the hands of those holding the legal title. Neverit is said : “But this is purely an equitable doctrine, theless the parties may, by express agreement, stamp and the legal title, with all the characteristics of it with the character and qualities of personal proprealty, attaches to it, until it is so applied to partner erty. The supplementary articles, by the express and ship wants.” In the absence of an express provision special stipulations of the deceased partner under in the contract of partnership, the real estate “only which he became joint owner, impress the real estate becomes personalty pro tanto." The intent of the un with “ all the incidents and liabilities of partnership derstanding and direction, that the real estate shall funds and personal property," thereby placing it on be considered as possessing all the characteristics and the same legal footing and in the same legal position liabilities of personal property, and impressing it with as the personalty. The specific performance of the such incidents and liabilities, is declared by the intro stipulations of the contract, in respect to the settleductory phrase immediately preceding, “for the pur ment of the business and the disposition of the firm pose of facilitating and simplifying the settlement property after the death of one of the partners, would and winding up the said firm." The manifest design itself convert the real estate into personal assets. is to impress the real estate with the incidents of per- Wilcox y. Wilcox, 13 Allen, 352. sonal property, both at law and in equity, as between Such being its effect and operation, what are the rights the parties to convert it into personalty; not an equit and powers of the surviving partner, under such conable conversion pro tanto, but a conversion in toto, for tract of copartnership? In determining these, we are the purpose of closing and settling the partnership not left to imply them from the supplementary artiaffairs; and to confer rights and powers on the sur
cles alone, for in connection therewith, the codicil viving partner which are not incident to the relation, may be properly considered. The testator prefaces mor implied in the mere contract of partnership,
the dispositions of his individual property, as made The parts of supplementary articles, having refer by the codicil, with the declaration that by the supence to the contingency of the death of one of the plementary articles he “did provide, give, and grant partners, make special provisions for the management
all necessary arrangements, directions and powers for and settlement of the business in Selma, and author. the conduct and management, control and winding ize the surviving partner to sell the real lestate situ up and settlement” of all the firm matters. The ated in that place, at such time and on such terms as partners exhibit entire confidence in the business he may consider best for the interest of all concerned,
capacity and integrity of each other; and the prerequiring the personal representative of the deceased
dominant purpose is to facilitate and simplify the setpartner to join in any deed necessary to convey a per
tlement of the partnership affairs by the survivor, on fect title both at law and in equity. If he did not
whom the right and duty are devolved by both the deem it advisable to sell the real estate in Selma, when
will and the law. To consummate this controlling he closed the mercantile business, he was authorized object, the parties agreed to impress the real estate to lease it; but in no event should a sale be postponed with all the incidents and liabilities of partnership beyond five years from the death of the deceased personal property, and directed that it should be conpartner. The surviving partner is authorized to take sidered a part of the joint stock and funds, and 28 the entire interest in certain designated lots in Mon
possessing all such incidents and liabilities. Tbe tevallo at a fixed price, and the personal representa
question arises, what are the incidents and liabilities tive of the deceased partner is required to make a which attach to the personalty, and not to the realty, conveyance if he elected to take, but no provision is belonging to a partnership? They may be regarded made for selling to others. The firm owning other as legal in their nature and character, as distinguished real estate, which includes the land sued for, after from merely equitable. On dissolution by the death making the foregoing specific provisions, which for of a member, the survivor has the right and power to some reasons were deemed specially material, the sell and pass the legal title to the personal property, partners incorporated the general clause above quo though there may be no firm debts, and a sale is ueces. ted, relating to all the real estate. What is the legal sary only for the settlement of the partnership, and effect of such stipulation in a contract of copartner the distribution of the assets; but he has a right to ship? Though at first there was opposition in Eng sell the real estate only when required for the payland to recognizing realty as a part of partnership ment of debts, or for an adjustment and equalization stock, in Thornton v. Dixon, 3 Brown Ch. 199, Lord of the partuership accounts, and then can convey Thurlow said, that if the agreement had been that the only an equitable title. Both kinds of property are lands should be valued and sold, it would have con subject to the debts, but the primary liability rests on verted it into personalty; but that the agreement in the personal assets, on the insufficiency of which dethe case before him was not sufficient to vary the pends the right of the survivor to dispose of the real nature of the property. Here is a distinct recogni property, and without the exhaustion of which a court tion of the authority of the partners to effect a con of equity will not charge the realty in favor of a credversion by agreement. The courts being forced, by | itor. the necessities of trade, to hold that realty may be-1 The parties evidently contemplated and designed come a part of the partnership stock, by a series of that in winding up and settling the firm matters, subsequent decisions, the doctrine was established; all the property, both real and personal, should
be sold by the survivor, without reference to the | national bauk, aud who had substantial control and necessity of its use to pay debts, or to adjust the management, bought fifty shares of defendant's outaccounts. The general conception is the conversion stauding stock, to pay for which he indorsed a note, of the real into personal property, both possessing the signed by M., the cashier, placed it in the bank as dissame incidents and liabilities, so that the real and per- counted paper, and drew the money thereon). He sonal assets shall constitute a joint-stock, which or afterward bought 148 shares, and to pay for them any part whereof the survivor had the right to dispose obtained from defendant an ordinary call-loan. Ou of in his discretion, and as he deemed most advisable subsequently selling a portion of the stock, L. applied for the interests of all parties, to remove impediments the price to pay the note aud reduced the call-loan. to speedy and advantageous sales, and to relieve the He did not assume to act for defendant in buying the survivor of the difficulties and embarrassments which stock, and it was transferred to him individually, and might prolong a full and complete settlement. Un was in his name on the books. L. had no actnal less the alause under consideration makes the realty authority to buy the stock for defendant; bu: the evichargeable with the debts equally with the personalty,
dence tended to show that the purpose of the purchase whether at law or equity, unless it gives the survivor
was to get the stock into the hands of persons who the power to sell the real estate the same as the per
would be useful to defendant. Rev. Stat. U. S., $ 5201, sonal property, it is without meaning, and has no field prohibits a national bank from purchasing or holding of operation. No precise form of words is necessary the shares of its stock, unless necessary to prevent a to create a power; it will be implied when the inten- loss of a bona fide debt. In an action for fraud in a tion is manifest to enable an execution of the trusts subsequent sale of such stock by L., held, that defenddevolved. As the intent is apparent, that all the ant could not be charged as owner of the stock. (2) property of the partnership, real and personal, shall In an action against a national bauk, to recover for the be sold for the purpose of settling its affairs, and that fraud of its president in a sale of defendant's stock, a division of the residue should be made by the sur
on the question whether the president represented vivor between the parties entitled, the power to sell defendant to be the owner of the stock, plaintiff testinecessarily follows. Winston v. Jones, 6 Ala. 550. fied that in the conversation resulting in the sale, the
This conclusion is strongthened when the codicil president stated that “we can sell you some of our and the suppleme:itary contract are considered to
stock" at 160, and that that was the price that the gether in respect to the appointment of executors.
bank took itin at.'' Plaintiff did not inquire as to the By the contract it is stipulated that the surviving
ownership. The president testified, that while he partner shall be nominated co-executor with any other
might have stated that “we have some stock," his person appointed by any codicil or will thereafter
best recollection was that he did not say “the bank made. In pursuance thereof, the testator, by the
took it in.” The presideut was the owner of the stock, oodicil, nominated John T. Davis, his son, and the and though he was shown to be guilty of unlawfully surviving partner executors, “with full and plenary | taking the funds of the bank, and to have committed powers to sell and convey real estate, and to do all acts a fraud on plaintiff, no motive appeared for his reneedful to carry out the true intent and meaning of presenting defendant to be the owner. Held, that the this codicil, and the last will and testament to which evidence sustained a finding of the trial court negativ. it is added as aforesaid.” When it is observed that ing the representations. Oct. 4, 1887. Prosser v. First the power to settle the partnersbip is a personal trust Nat. Bank of Buffalo. Opinion by Earl, J. vested in the surviving partner; that the personal RECEIVER --- ISSUE OF CERTIFICATES FOR LABOR – represeutative, other than the survivor, is required
POSTPONEMENT OF MORTGAGE LIEN -- EXPENSES OF only to unite in and make conveyance in specified in
RECEIVERSHIP – REORGANIZATION. - (1) The Rockstances; and that full and plenary powers are con
away Beach Improvement Corporation executed a ferred eo nomine to sell and convey real estate, and to
mortgage to a trustee to secure an issue of bonds, and
in subsequent proceedings to which neither the bond. meaning of the supplementary articles-the intention holders uor trustee were parties, an order was made of the testator cannot be misunderstood nor mistaken.
without notice to them, authorizing the receiver of It is apparent that in respect to the sale of the firm prop
the corporation, appointed in those proceedings, to erty the power was not intended to be a joint power,
borrow money to pay employees of the corporation, from the fact that the son was a minor, and auother
and issue certificates therefor, the lien of which upon person is appointed to act as executor until he at
the corporate property should be prior to that of the tained his majority, upon whom no special power is
mortgage. No emergency requiring the use of extraconferred, and who is exempt from responsibility ex
ordinary means for preserving the property was shown, cept for assets actually received by him. His active
but a referee in other and subsequent proceedings duties relate to the individual estate of the testator; found that at the time of the order the workmen were and there is no provision for coutinuing the partner riotous, and that much of the corporate property ship business, except at the discretion of the survivor, would probably have been destroyed or seriously inwhose principal and constant aim shall be as speedy
jured but for the loans upon the certificates. Held, settlement as may be consistent with the interests of
that neither the facts shown on the application for the all parties.
order, nor the facts found by the referee, authorized We hold that by the clause impressing the real es- the postponement of the mortgage lien. No doubt a tate with all the incidents and liabilities of partner
serious emergency existed, growing out of the disconship personal property, in connection with the other tent and riotous disposition of the workmen. But the provisions of the will, considered as an entirety, the State primarily assumes the duty of the preservation game power is conferred on the surviving partner to of public order, and the repression and punishment of sell the real which he bas by law to sell the personal crime. It enacts laws, constitutes courts and comproperty, and that his conveyance as such conveys the missions officers to this eud. It especially makes prolegal title, unless when otherwise specially provided. vision intended to prevent riots, and it seeks to inAffirmed.
sure prompt action on the part of local officers and
communities by imposing upon the latter pecuniary NEW YORK COURT OF APPEALS ABSTRACT. responsibility for injuries to property caused by
riotous assemblages. In this case no attempt, so far BANKS — FRAUD IN SALE OF BANK STOCK – OWNER as appears, was made by the receiver or by the comSHIP.- (1) L., who was president of the defendant pany to secure the intervention of the public authoris ties to suppress the apprehended disturbance, or to the power of the court, in dealing with property in arrest those who threatened to burn the property of the hands of receivers, to the practical subversion or the company. It clearly ought uot to have been as- | destruction of vested interests, as would be the case sumed that the ordinary agencies of the law were in in this instance if the order of August 17, should be adequate to the situation, or that the law, operating sustained. It is best for all that the integrity of conthrough its regularly appointed channels, was impotent tracts should be strictly guarded and maintained, and to control the situation. It would be difficult to do that a rigid, rather than a liberal construction of the fine, by a rule applicable in every case, what are ex power of the court to subject property in the hands of penses of preservation which may be incurred by a re receivers to charges, to the prejudice of creditors. ceiver by authority of the court. It was said by James, should be adopted. (2) A corporation to secure an L. J., in In re Iron-Works Co., 3 Ch. Div. 427, that issue of bonds, executed a mortgage to a trustee, who "the only costs for the preservation of the property was one of its directors and stockholders. A receiver would be such things as the repairing of the property, of the corporation, appointed in subsequent proceed. paying rates and taxes which would be necessary to ings to which neither the trustee nor bondholders prevent any forfeiture, or putting a person in to take were parties, without notice to them, was authorized care of the property." Wherever the true limit is, we by an order of the court to borrow money, and issue think it does not include the expenditure authorized certificates therefor, the lien of which should have by the order of August 17, and that such an expendi priority over that of the mortgage, and after the issue ture is and ought to be excluded from the definition. of such certificates, the order was approved by the There must be something approaching a demonstrable trustee, in common with others, acting in the capacity necessity to justify such an infringement of the rights of a director and stockholder. Held, that neither such of the mortgagees as was attempted in this case. We action of the trustee, nor his inaction estopped the have not lost sight of the recent very important cases bondholders, from obtaining a review of the order. decided in the Supreme Court of the United States (3) In a controversy between boudholders and holders involving the question of the power which may be of receiver's certificates of a corporation as to the vested by the court in receivers of insolvent railroad disposition of the surplus moneys arising from the corporations, and the right of the court to provide for sale of the corporate property under a prior mortgage, the payment of certain debts, contracted before or expenses incurred in a scheme for the reorganization after the appointment of a receiver, out of the income, of the corporation, for which it is claimed a large and if that is inadequate, out of the corpus of the portion of the bonds and other securities were pledged, property. These cases and decisions are the outcome may be adjudged, and any lien therefor enforced. of the growth of railroad enterprises and business | Oct. 4, 1887. Raht v. Attrill. Opinion by Andrews, J. within a comparatively recent period. It has been held that under special circumstances the court may direct the payment of ante-receivership debts for labor or supplies contracted within a limited period
ABSTRACTS OF VARIOUS RECENT before the insolvency, the adjustment and payment of
DECISIONS. traffic balances in favor of connecting roads, and may direct the receiver to operate the road pending the ASSIGNMENT FOR BENEFIT OF CREDITORS — GIVING foreclosure, and to that end purchase necessary rolling ASSIGNEE DISCRETION AS TO SALE – VALIDITY.-A stock for the use of the road, and make repairs and voluntary assignment for the benefit of creditors auimprovements thereon, the expense of which shall be thorized the assignee to "sell and dispose" of the a charge on the property in priority to legal liens. property conveyed “upon such terms and conditions Wallace v. Loomis, 97 U. S. 146; Fosdick v. Schall, 99 as in his judgment may seem best, and most for the id. 235; Barton v. Barbour, 104 id. 126; Miltenberger | interest of the parties concerned, and convert the V. Railway Co., 106 id. 286; Trust Co. v. Souther, same into money." Held, that the discretion vested 107 id. 591; Burnham v. Boweni, 111 id. 776; Trust in the assignee must be understood as a legal discre. Co. v. Railway Co., supra. It can not be success tion; that the terms used did not necessarily imply an fully denied that the decisions in these cases vest authority to sell on credit; and that the assignment was in the courts a very broad and comprehensive juris- therefore not void, as necessarily tevding to hinder diction over insolvent railroad corporations and their and delay the creditors in the collection of their debts. property. It will be found on examining these cases, We are not inclined to follow the rule of construction that the jurisdiction asserted by the courts therein is | adopted in Keep v. Sanderson), :2 Wis. 42: 12 id. 352, largely based upon the public character of railroad but to follow the rule laid down in Norton v. Kearney, corporations, the public interest in their continued 10 id. 443, and Bound v. Railway Co., 45 id. 543, in this and successful operation, the peculiar character and court, and in Kellogg v. Slauson, 11 N. Y. 302, and terms of railroad mortgages, and upon other special Nye v. Van Husan, 6 Mich. 329, in the courts of New grounds not applicable to ordinary private corpora York and Michigan. It does not seem to us that untions. It was said by Waite, C. J., in Fosdick v. Schall, der the present state of the law in this State in regard that “railroad mortgages and the rights of railroad to voluntary assignments, a different rule of construcmortgagees are comparatively new in the history of tion should be adopted in construing an assignment judicial proceedings. They are peculiar in their char than is adopted in the construction of other contracts acter, and affect peculiar interests." And it is said in and grants of powers. We are disposed to adopt the Barton v. Barbour; “The new and changed con rule as stated by this court in Norton v. Kearney, and dition of things which is presented by the insolvency which is clearly expressed in the opinion in that case of such a corporation as a railroad company, has ren. | in the following language: “It is contended that the dered necessary the exercise of large and modified words in my discretion' are as broad and compreforms of control of its property by the courts charged hensive as the words upon such terms and condiwith the settlement of its affairs, and the disposition tions,' and necessarily imply an authority to sell upon of its assets." These cases furnish, we think, no credit. We are of the opinion that the discretion authority for upholding the order of August 17, or for here vested must be understood as a legal discretion, subverting the priority of a lien, which according to that is, a discretion to be exercised within the limits the general rules of law, the bondholders acquired which the law fixes in such cases. There is ample through the trust mortgage on the property of the room for the exercise of this discretion, without trancompany. It would be unwise, we think, to extend soending any rule of law. It must be held to apply to