United States Trust Co. v. Western Contract Co.
Opinion of the Court
A petition for rehearing and modification of the judgment of the court herein has been filed. The mandate has
The first ground of the petition for rehearing is that the court, under its own reasoning, should have allowed the Western Contract Company to set off against the claim of the receiver of the Chesapeake & Ohio Southwestern Raihvay Company at least the amount of interest which was due under its guaranty from the railway company and was unpaid before the contract company took back the majority of stock in the Ohio Valley Railway Company. The petition for rehearing states its ground as follows:
“Tbe court seems to bold tliat the Western Contract Company would be entitled to its sot-off if it wore not for the fact that by taking back the stock it has relieved the Chesapeake Company of its guaranty. The court seems to hold that the contract company gave the Chesapeake Company control of the Valley road in consideration that the Chesapeake Company would guaranty the Talley bonds, of which the contract company was a large holder; that the reciprocal benefits to the parties were concurrent, — control of the road on the one side, receipt of interest on the other. Assuming this to be true, the court has failed to observe the fact that the Chesapeake Company did not pay the interest which fell due on the Valley bonds January 1, 1894, although it had control of the road during the six months represented by the interest which (hen matured. It seems to us, therefore, that to the extent, of the interest which was due January 1, 1894, we are entitled to have our offset allowed.”
Counsol for tlie petition have misapplied the reasoning of the court. The court did and does hold that the reaf consideration of the con trad: to part with a majority of stock of tin; Valiev road by ihe Western Contract Company was the agreement on the part of the Chesapeake & Ohio Southwestern Company to guaranty the bonds of the Valiev Company, and that the .other provisions of the contract with reference to the deposit of bonds to pay off the liabilities of The Valley Company were only preliminaries which were to be regarded as executed before (he execution of the contract in its main features began. Now, the Western Contract Company might have relied simply upon a suit to recover damages against the Chesapeake & Ohio Southwestern Railway Company for failure to fulfill its guaranty, but the contract company did not do so. It stipulated in the contract that it might have the right to take back the majority of
The second objection to the judgment of the court stated in the petition for rehearing is that it was erroneous in holding that the claim of the United States Trust Company in the right of the Newport News Company to share in the security of the bonds deposited by the Western Contract Company was in fact a claim of the Chesapeake & Ohio Southwestern Railway Company, of which the Newport News Company was nothing but an assignee, and that as such assignee the Newport News Company, or its assignee, the United States Trust Company, was entitled to the benefit of the security which the Chesapeake & Ohio Southwestern Company, as the payor of the car-trust obligations, would be entitled to under its contract with the Western Contract Company. It is objected that the United States Trust Company did not make any averments in its intervening petition justifying the inference that it contended that the Newport News Company was the assignee of the Chesapeake & Ohio Southwestern in respect of the claim which it was asking to have paid in its intervening petition. The petitioner states, moreover, that such is not the fact, and intimates that, if the issue had been made by the United States Trust Company by a proper averment, it would have been met by a denial, and the proof would not have supported the averment. We are still of opinion that the facts of the record justify the inference which we drew. It is true, however, that the averment in the intervening petition of the United States Trust Company is not specific upon the point now mooted. To avoid any injustice in the cause, we have concluded not to make our judgment final in the matter. The judgment of the court heretofore rendered will be modified so as to remand to the lower court for the hearing of the issue whether the Newport News & Mississippi Talley Conrpany was in fact the assignee of the Chesapeake & Ohio Southwestern Company in respect of the claim arising from the payment by the Newport News Company of car-trust obligations of the Ohio Valiev Railroad Company, with leave to the United States Trust Company to amend its pleading so as to make this averment specific, and to the contract company to deny the same, and with leave to both to adduce evidence upon the issue thus joined. In the original judgment of this court we taxed one-half of the costs of the appeal against the receiver of the Chesapeake & Ohio Southwestern Railway Company, and one-half against the contract company and S. S. Brown. The counsel for the petitioner suggest that, if the court will examine
Reference
- Full Case Name
- UNITED STATES TRUST CO. v. WESTERN CONTRACT CO. ECHOLS v. CENTRAL TRUST CO. WESTERN CONTRACT CO. v. ECHOLS BROWN v. WESTERN CONTRACT CO.
- Status
- Published