Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1880-02-12
W. e., V. nj. Il G. S. Il. L.

w ""T Wy ~ uuEu i\Ciil.
Graham ct all.
W. e., V. III. Il G. S. Il. Il.
IL seems 10 be duo TO tho char~ccr tl Tho
questions discussed. the maGotu lc of the in
lcrcsts involved, and thu learning and ability
displayed by COUNSEL liz this clnsA that the
court should set forth III, rcastHs wh'ch Ea7n
controlled it in tho c,rvln.i,nS which iImga
bI en- rcaciIcd.
The claims preferred fer services rendered
| aud Ter materials and suprlIcs furnished wr!n
passed upon by this court 1T q !crmtr tenn aid
are now TO re again c,rsiirrcd upon pnttiors
to rchehr tho decree thtr entered. Tic view
Of tho case then taken vas that th0so CLAIM
rcrr' S'ntcd mCrCIy simple contract debts due
hy tho defendant corporation ard constituted
40 lien upon tho corpus OF tho properly OF
the defendant, and were eff: ED by no c0uily
| which could give them prcirrcncn OYER c:c;l.
tors secured by tho various deeds Ct ;ru>L. Tn
to that Tine tw0 C!Saa had been L,cuiGG-ruc,
Lhat cl Douglass W. Kline ty Ito Suricmo
Court oil kentucky. and tho a!htr. that vf
)ui m ct ala. vs.. q. \ o. Il. Il. &C. hylrrn
Judge Wexford, ii the Ciir!it Cnur> inr ,hc
City oi Richmond. In both ui these caGca thc
oouitl. by different processes Ct reasoning,
reached tho sdmo conclusion, ard gave that 70
llei Which waS nero refused l. inay hero b.
mentioned that in tho very ltccrt CASE of Goo
vs.. New Jclsoy Nlialaad Rai!rpad. %lst New
Jersey Fqnity Reports. the cllarc ,llor reviews
thcsa two cases and It cls .hc prineipca unan
when they We're dtcdNd. Upon the author;irs
as lhty stood Mt tho tlmn the decree crtpp!ria
td OF was cntcrrd, my crl;linn IL unsh .kon,
but feel caml,' He'd to modify my views Of !ha
Lave appbcth ln to tho cier before me IN ,rir
ere, tn Tho authority Of Lha SurrcIaa Gatrt Il
the u. ). While tho DECISIONS o! tia! tribunal
arc not III tins iac binding I'll hoiity u40n sn",
they lrr, Of course, in all cases. cHtiilaG 80 the
hiEhcHt respect and considerations, aad IN cnanA
such SIS tho one before Inc. whrio thu .;ci>aaa
ui Ihh Supreme Court Of Iha Sac furnish 70
prtc ident Ter my guidance, and in which uri-
foTmly OF decision Is 70 desirable. ihay ought.
think, to DO followed. In the can, OF Enanick
50. Sohnl |? O!to, 2%%jI /. wAl held that where
railroad passes into tho hand; Of u r,c liver,
aud ii aprDara that heretofore Ally para II ne
revenues 0l he road " hirh should hAv. been
applied i'll satisfaction Of del lor labor, sap
plies, equipments and Improvements ias ha,n
Improperly pail to Mortgages OF tie Tnai
the court out OF lunda Under is r,nlr. vi
do that whc The corroraticn risLrirlIy shnuIi
have done md to tho extent hat CarGirga or
current funds OF thcrompanp iavn icrr .iivA,i;sl
from Their proper 20 an Improper direction will
make restitution. l. will i;r nhirlrni !t,t !i1
cart IN thai cI,n l!Aposr,i IN iniiali ii as .,
tinG uIon Tho operation # ,lis raci pie.
". ldh IL made IA depend ipnn liz, !ntlaH,r.
propositions
|. iiat tho 'IGoGiin aui III wil,ir III in.r,.
g64ee a. t. b. phia IL The htL iiaAiEa obtained
~ d6ddc:tnE lrIm tho gross ca1Ginra what
10 rtqalfeu t1r necessary Operating AMI m!.aI-
ii0g cXp2Lsta proper equipments KIT: u,ciHi
improvements.
=. That If for ihc ooi.y1LirLcl IT ill.,. mo
mcnt something Is akcn irCu what mag uai
Improperly be ual,d Tho current debt fund and
put with that which, belongs l., he moriga.o
creditors. it is proper lor court 1T ,uuity,
when tho G>n is before it, to restore to tho Cur.
rent debt fund that which bc,o0es to It before
auyihing derived from that scuc, y0ca Ia tho
mortgages.
3: Creditors for labor. supplies, material, and
equipments have no lien on tho mortsngad
properly or i1c)mci but the ciiicoIs ef the ccm
pany are. IN sense, trustees OF the earnings Tor
the benefit OF tho different classes Of creditors
and tho stockholders.
10 these rroposllors no last OF joolun can, |
| think, DO urged, either Us rmbod,iag corlccS |
principles OF equity tr as fairly stating the
StouHuo uFoi' "hNIt liiG htIiSlOU VI tx lNu |
SChall rests
The substance OF tho d. ci-ion "a far As apnI |
cnblc 10 this case moy DO briefly stated az fell |
loss: Whcro tho company has diverted Iu1ds |
which should have gouo to the lnuidalion Of |
current debts to mortgage creditors, tho court |
will mako restitution Whatc there his hoen 30 !
diversion, thcro is no equity for restitution 4; |
that prma iaoie the mortgage creditors ora cp,
titled to what thoy have received IS agaipst
other c'aSScs Of creditors; end tho burden Of
proof Is on tho floating creditors to show them
selves entitled TO the equity which they uq,k.. /
There Is another proposition which il, | |
think, fairly dcducoiblo from those inst stated:
Where diversion Of tho fund haa been ahosn.
inc restitution ID 10 DO measured by tho tx,cnt
OF tho diversion, and is to be cnfo!c i ayatst
those who havO received i!s benefits.
snail now cndeaVor 10 apply these nyin.
clpes TO tho cise bciore me. The only evidence
OF o diversion suggested either il tho record or
IN The argument, il an inicrcnc, from ,h, tSo
urdispucd lscts.
First. That interest i,aa been pail 20 nou.
gagcea.
Second. That q riain cia:tra tor sh .up.
plies, materials and equipments have M: boon
rala-;W0 very potent facts | a'iGit-hnt
thcrc is nothing to show Whcu Tho diversion
occurred, how it Cccurroh or for who's, bent lit
it Was duno.
The oommi: slcn'r al tho r,qlo:t Il Eal.ssih
warden, Of counsel Tor mnrigapccs and Attorney
General Field, Of mnaaal for claimants. ere
pared ataIemch: Of the grGsa rnrnrrs Of tho
road Tor tho fiscal year. ending Sept. -, 1871,
aud Tor zach successive year 10 the 2n.h Sent,
1916 alter the rtojiVtr had been annnn.cd.
Within TINT poIiOd sul, c!cd by cGuGS. | must.
suppose lo' k for tho cvilarc: upon sgEich 20
docdu this Case. From that statement il an.
reara that tho rrosa receipts OF the ru.! aver
aged lor those years nearly 5 600 900 ard that
me moi ncOma Ter those years averaged abont
! 900. IL also hrraa:a that nndcr he head
I'll operating ,XpcErna Ii embraced al III,
I expenses OF every aOri, Wh,n ,..o road
whether for labor. fllr;iirs. material
or improvements, mui from thu tllpt.iai:..1taI |
report IL appears that for Tho Sunr nntiny Snr, |
3lth. lSlD only tho sam OF s,,Ul H:ri ST wns n,il
10 mort2hglns Tor Interest duu ghiln thu raL m |
como q tho ICai t"r That yer ia 1913 An 81