Court Opinion

ID: 6250650
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:13:50.828573+00
Date Added: 2024-06-11T08:59:24.660476
License: Public Domain

Mr. Justice Moschzisker,
dissenting:
I dissent from the majority view for the reasons stated in the following excerpt from the opinion of the court below: “On the basis of the conditions existing to-day, the continuance of the payments by the complainant into the sinking fund for a future period of twenty-two years is undoubtedly onerous and apparently unnecessary, but where is there any guarantee that the conditions existing to-day will continue during the next almost quarter century? What may be the market value of the securities in the sinking fund during all of that time? What assurance beyond all question is there of the continuance of the valuation of the coal lands relied upon to-day as a security, upon their assessed valuation of $905,037? If *243they are continued to be mined during all of that period, may not their treasures of coal become exhausted? What assurance have the bondholders, who are the real parties in interest, that the excellent guaranty of the Lehigh Valley Railroad Company, under the conditions existing to-day, will be as valuable during the whole period of twenty-two years? What may or may not be the rates of interest existing during all of that period, and what the effects upon corporations of ill-advised national or state legislation. . . . What may be the value of gold coin during this period? It is apparent that the most optimistic person cannot prognosticate conditions, or their effect, for such a long period in the future.
“It is clear that the trust continues until the bonds are all paid and that those holding them that is 'the registered owners or the legal representatives of the registered owners’ are entitled to hold them until January 1, 1932, and to receive interest thereon from January 1, 1892, at the rate of five per centum per annum, payable in like gold coin, as the principal is to be paid. These payments are to be made without deduction for any tax or taxes which may be payable under any present or future law of the United States of America or of the State of Pennsylvania, .... the company agreeing to pay any such tax or taxes. . . .
“It is the holder of the bonds who is entitled to the security . . . .; the mode prescribed in the said mortage for the recovery of the principal and interest of said bonds being exclusive of all others.
“ The obligation of the complainant beginning with January 1, 1893, and continuing annually thereafter during the continuance of the trust, is to set apart for a sinking fund and pay over to the .... (trustees) .... a sum equal to ten cents per ton for each and every ton of coal of sizes above pea shipped during the preceding year (provided, that in no case shall such sum be less than thirty thousand dollars in any one year), to be appropriated to the purchase of such of the said bonds as *244can be obtained at prices not exceeding par, with accrued interest, which bonds shall be forthwith cancelled, and in case the bonds cannot be procured at or under par, with accrued interest, then the said trustees or trustee for the time being shall invest the amount then remaining in the said sinking fund in such securities (including the bonds intended to be hereby secured), as shall be approved by the party of the first part, which said securities and the proceeds thereof, when sold, together with all accumulations of interest thereon, shall form a part of the said sinking fund, and be applied to the purchase of bonds as aforesaid, when the same can be secured at or below par with accrued interest.
“ Can it be then held that it was the intendment of the parties, that is, of the complainant, of the bondholders to be secured by the mortgage, and of the trustee mortgagee, that the words: 'And when all said bonds shall have been purchased, or when the amount in the hands of the trustee shall be equal to the principal and interest of the bonds then outstanding, the payments into the hands of the party of the second part (the respondent herein) for a sinking fund, as aforesaid, shall cease/ means only the 'interest’ to the date when the amount of the sinking fund equals the amount of the then outstanding principal of the bonds, and that it does not refer to the 'interest’ recited in the first clause, viz.: which is to be paid to the holders of the bonds .... semiannually 'as the same shall become due and payable according to the terms in the said bonds contained and on the days therein respectively mentioned for the payment of the same/ which, as recited in the bonds, is, already shown to be 'interest thereon from the first day of January, 1892, at the rate of five per centum per annum, payable in like gold coin semiannually on the first day of the months of July and January in each year/ until, 'the principal sum of the bond shall become due and payable’ .... on the first day of January, 1932? We cannot so interpret this contract.”
*245With all respect for the opinion of the majority, so to interpret the contract, to my mind, is to change the plain meaning of the words used in the bond and to reform the instrument to the possible prejudice of the bondholders. It seems to me that the words, “when the amount in the hands of the trustee shall be equal to the principal and interest of the bonds then outstanding,” mean the principal and an amount equal to all interest which shall thereafter accrue to the maturity of the bonds.
I would affirm the decree as entered.