The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1879-04-25
purchase OF Materials for Railroads
Reserved Licn---Priority Over HORT

Hurcnaae OIL Materials lVF As&'A'A"
Reserved Licn---PriOrity over AoFE-
gage Debf.
supreme Court of the United slates-[No;.
573-Octobcr Term, 1878l-Huidekopere
al, .. Hinck!ey Locomotive VOTES
Property purchased by railroad company ior It's us
Maid for out or tue funds Of the railroad LII prefer
ence to the claims of the holders of first mortgage
bonds. The lien Of the vendor Is Mo 10 'nA'
Of the NEUTRALITY-SUSPICIOUS. Le0uS 'e"o.
WAITE, C. J.-This is also an appeal from
a decree upon a petition Of Intervention,
filed in the case Of Fosdick & Fish against
the Chicago, Danvllle and Viucennes Ball
road ComDnny. On the 1st OF September,
1873, the HinckIey Locomotiye-Works en-
tered into a contract with the railroad COM
pany for the sale OF three locomoflve-en-
gines, and on the 9Th OF October, 1870, LOT
the sale OF two more. BY the terms OF
these contracts notes were to be given LOT
the price, payable at stated periods, when
might be renewed, IL required. Inc -titie
70 the locomotives was 10 remain IN tue
vendors until the notes were pald.
On the Sth Of October, 1875, Anderson,
tbe.receiyer in the cause, filed his petition
in court setting forth the contracts between
the railroad company and the locomotive
works. with statement OF the notes Tor the
price then outstanding and unpaid; that on
account of the peculiar construction OF the
engines they were not adapted to the busi-
ness OF tile road, and could not be cconoml-
cally used, and that the locomotive compa-
nv claimed title to the engines under thelr
contract. He therefore asked authorty
from the Court to surrender the engines 10
the locomotive company, and to ADJUST, set
tie, and pay for their use during anu rom
the date OF the receiyershlp. On Tue same
day the necessary authority LOT the festora-
ton OF the engines was granted ana tie
receiver was instructed, il it was done, to
receive the outstanding notes gwen ior the
price, and deposit them with the clerk, SUD-
iect to the further order OF the Court.
On the 18th of October the locomotive
company filed its petition in the cause, set
tirp forth that the engines bad been taken
back and the notes deposited with the clerk
in accordance with the instructions which
had been given the receiver. 1t then asked
that the contracts and notes be referred 10
A master to ascertain and report the balance
due unon them. On the same day the re-
ference was made as asked, and on the 29tn
of November, 1876, the master reported
that the ngncs were accepted bF the rail-
road company under the contracts, and used
cortnuou-y until the fall OF 1875, when they
were returned to the locomotive comra-
nv i'm an injured condition; that they had
since been sold to ether companies at re-
duced rates, and were worth when sllfren-
dcred about one half what they were when
nut into the possession OF the company.
He also stated his inability to ascertain def
niteIy the amount TO which the locomotive
company was entitled, except upon the ba-
sis OF suggestion raaGe by the receiver,
that q pavmcnt should be made by way OF
COMPROMISE OF an amount which would be
fifty per cent. OF the original contract price
after GcGucting the amount received from
the sale OF the engines to other parties. lie
thereuDon recommended The payment OF
$4,000 as 4 compromise settlement OF the
claim.
On the 14th CT December, 1876, which was
subsequent! to the decree OF foreclosure sale,
but before the sale, after reading the report
OF the master, on motion OF the solicitor o!
the locomotive company, and with Inc con-
sent OF Fosdlck 4 Fish and the railroad COM
pany, the Court found due from the railroad
company. "fur the use Of and repairs 10 To-
comotiyes, the sum OF 5l5, 1870" and Or
dcred the receiver TO pay that amountto Tue
locomotive company out OF The moneys III
his hands, as soon IS ii could be done con-
sistently with the operation OF the road ana
tie Davmcnt Of claims heretofore ordered.
At the time this order was made the inter-
yenine bondholders had been admitted as
parties to the cause, and it does not appear
that their consent was obtained. On the 9TH
OF January, 1877, they filed objections to the
allowance OF the claim, on the ground that
it was in the nature OF 4 mere claim for
money due on an account closed before the
appointment OF receiver for the railroad
COMPANY, and that the bondholdcrs had
paramount lien on the earnings OF the ROAD
and the proceeds OF the sale. At the same
time they filed motion to set aside the Or
der made December 18th. for the payment
of the claim. no payment was made by the
receiver under the order, and Oil the 18th OF
April, after the sale under the foreclosure
and its confirmation, the matter came on
again for hearing upon the motion TO set
aside. This motion was ovcrrucd, and
further order made for the payment OF the
amount which had been found due "out OF
the proceeds in court From this
last and final decree the intervening bond
holders took this appeal.
We think this case is settled by that OF
SchalI, Just decided. The amount found
due the locomotive company is not in rcall-
t. for the use and repairs OF the engines,
but on account Of what was agreed to be
paid for the purchase. The railroad COM
pany contracted to buy the engines and pay
Il certain price. The locomotive company
retained paramount lien to secure the sum
to he paid. The debt so incurred was not
paid. The lien OF the locomotive company
has been in effect forccloscd. and balance
OF the debt still remains due. Whatever
may have been the form OF the transaction,
this is It's substance. SO far Is we can see,
no equitable claim upon any fund in court
has been established as security for this debt.
The locomotive company occupies the posi-
ton of a general creditor, with no special
equities in its favor.
As no question is presented for our con-
sidcraton except that arising upon the pay
mcnt of the money decree, that decree is re-
yerscd and the cause remanded for such
further proceedings, not inconsistent with
this opnion, as may seem to be proper.
HENRY CRAWFORD, for appellant.
r. BIDDIE ROBERTS, for appcliees.