Court Opinion

ID: 6950279
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:30:45.748244+00
Date Added: 2024-06-11T16:08:03.414072
License: Public Domain

Walker, J. The money sought in this case to be subjected to the garnishee process, ivas accumulated after the order of the directors, in January, 1856, appropriating the $56,000 guaranteed to them by garnishee and the Illinois Central Railroad Company, for the payment of the interest, and a sinking fund for the payment of the bonds secured by the mortgage, or deed of trust, to Martin and Coman. And it was earned by the road, and became due to the defendant below, after the execution of the deed of trust; and if it was embraced in and passed by that instrument, then it was properly the' money of the trustees for the use of the bondholders, and the garnishee should have succeeded. Whilst, if that fund did not pass by that instrument, or its appropriation for the payment of the interest on the bond was in operation, the finding of the jury was fully warranted. It appears from the evidence, that the road during the time this fund was accumulating, was in the possession and control of Martin and Coman, by Cobb, their agent. Under the resolution of the board appropriating this fund to the payment of ■ interest upoq the bonds held by Martin and Coman, followed by their possession of the road, and their receipts of the funds, there could be no question that they would be entitled to retain this fund, and to apply it according to the provision of their deed of trust. And as the garnishee can avail himself of any equities that may exist, to exonerate him from paying the money, if it can be made to appear that Martin and Coman had an equitable right to this fund, it would constitute a complete defense against the garnishee process. In this case, it would seem that the right of Martin and Coman to recover against the garnishee was complete, both at law and in equity. An action for money had and received could no doubt have been maintained, or it could have been recovered on a bill in equity. It was pledged to their use, and when received in equity became theirs. And if their remedy was complete for its recovery, appellee could not have the right also to sue and recover the same fund ; if so, it would render the garnishee liable to a recovery by, and to a payment of the same fund to both parties. But even should we be incorrect in this conclusion, the gar-' nishee had a full and complete defense under the deed of trust. The defendant below, before this fund accrued, by its deed to Martin and Coman, had conveyed to them, to • secure the pay-' ment of the principal and accruing interest on their bonds, all of its corporate property, tolls, incomes, issues, profits, rights, credits, and franchises. Now, this fund must unquestionably be an income of this road. It was not a fund, then, accumulated and in possession of the company. It came to them after the mortgage was executed, and was as much an income as if it had been produced by the earnings of the road in any other mode. It is true that there is a reservation in the mortgage, that the mortgagors should have the right to collect money due on subscription, or otherwise. But there is no pretense that this controversy was for money due on stock subscriptions. It is, however, insisted, that as the reservation was for the collection of money.due otherwise than for subscriptions, that this fund was not included in the property thus pledged. This could not have been the design of the parties, however, the income and profits had been expressly enumerated, and this sum was not then due. But the parties must have designed to reserve the right to the mortgagors to collect money due on stock subscriptions, and such other accounts or contracts as had not been enumerated in the deed. This construction would seem to be the reasonable and natural intention of the parties, and frees the reservation from all doubt and uncertainty, whilst the other would leave it uncertain as to the intention of the parties. This was not, then, a debt, nor was the money due, but it was earned and produced by the use of the road after the mortgage was executed, and could not have been designed to be embraced in the reservation or exception. This fund was produced by the agreement between defendant below and the appellant and the Illinois Central Railroad corporation, and grew out of the transportation of freight and passengers by defendant below, in pursuance of the agreement. By this arrangement, a large portion of the income of the road was produced, and it was in the nature óf income on freights, and not of indebtedness. These other companies were not owing the defendant anything at the time, and if they were, that indebtedness did not pass under the mortgage, but only the future increase. Then, if the interest was not paid upon these bonds as it fell due, and the evidence seemed to show that if was not, this fund was liable under the mortgage for its payment, and Martin and Coman had a right to recover and so appropriate it. The court erred, therefore, in refusing to give appellants’ first, second, third and fourth instructions. The judgment is reversed, and the cause remanded. Judgment reversed.