Shepherdstown register. [volume] (Shepherdstown, Va. [W. Va.]) 1849-1955, 1888-09-14
An Lnnnrfnnf Case Decided.


In the Circuit Court at Charlestown
on Monday, in special session, Mr..
Joseph Trapnell, presiding as special
Judge, delivered his opinion upon the
petition of A. w. Mcdonald, special
receiver of the Central Improvement
Company, filed in the chancery cause
of the Fidelity Insurance, Trust and
Safe Deposit Company against the
Shenandoah Valley Railroad Com
pany. The decision is averse to the
petitioner. The Judge was occupied
two hours in delivering the opinion
which is regarded by the counsel in
the case as an able legal production.
The opinion is based upon the we'll
established doctrine that an innocent
purchaser for value, without notice
is protected in his purchase.
The history of the case is as follows;
In 1872 the Shenandoah Valley Rail
road Company executed n first mort
gage for the purpose of authorizing
and securing the issue Of S3,75O,COO IN
bonds. Under this mortgage but $751;
600 in bonds were issued, of which the
Central Improvement Company was
possessed of S531, 900 dated in 1872,
bearing seven per cent. interest. These
bonds were never paid and the object
of the petition was TO enforce their
payment as first mortgage bonds
having priority over all others. Sub
seuuent to this issue the Shenandoah
Valley Railroad Company in 1879 issued
another mortgage in which it was re-
cited that all the bonds of the first
issue had been called in, surrendered
and Cancelled, and in the same year
another mortgage was given III which
the same recital was made. or the
last issue which purported upon the
face to be first mortgage bonds, the
Fidelity, Insurance, Trust and Safe
Deposit Company of Philadelphia be-
came the holder Of the amount of
IS, 500, 900. This company in 1884 in
stituted suit to foreclose these bonds.
In this suit the Central improvement
Company, by its receiver, filed its
petition, asserting a prior lien under
the mortgage of 1872, claiming never
TO have surrendered its bonds or au-
thorized their release by the trustee
in the mortgage The petitioner
claims that the cancellation or release
of the bonds by the trustee was with
out authority and therefore void. By
the evidence in the case it was shown
that the Central Improvement Com
pany was guilty of negligence in not
asserting its rights and enforcing its
claim. and cannot therefore be pro-
tected as against the subsequent inno-
cent purchaser, the Fidelity lnsur-
ance Trust and Safe Deposit Company.
The decision of the court is that the
last-named company was a purchaser
for value. without notice of the claim
of the Central Improvement Com
panv. and is entitled to treat the re-
lease of the bonds held by that com
pany as valid, which release was on
record when it took the mortgage
securing the $500, 600 worth of bonds.
Counsel for the petitioner express
their intention to appeal to the
Supreme Court of the State.
Eminent counsel were engaged on
both sides. \. w. Mcdonald and a.
Moore, of Virginia, and Daniel b.
Lucas, of West Virginia, represented
the petitioner; Judge Robertson, of
Virginia, John G. Bullitt and r. G.
Dale, of Philadelphia, +. p. Clark, of
Baltimore, and Geo. B. Caldwell of
Wheeling represented the Fidelity
Insurance, Trust and Safe Deposit
Company.