Court Opinion

ID: 8773551
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:53:17.095078+00
Date Added: 2024-06-11T17:02:23.494368
License: Public Domain

PER CURIAM.
The bonds are dated February 1, 1887, and are in the usual form of such obligations; each bond promising to pay $1,000 in gold coin on February 1, 1907, with interest thereon at 5 per cent., payable February and August. Each bond also contains the following stipulation:
“Said railway company agrees to transfer to the hearer, at his option, ten shares, of one hundred dollars each, of its common capital stock, at any time within ten days after the date fixed for the payment of any dividend npon its common stock, upon delivery to it in the city of New York of this bond and ail unmatured coupons thereon in exchange for said stock, and thereupon, this bond shall be canceled.”
Each is indorsed:
“Mve per cent. 20-year, convertible debenture of 1907.”
The bonds in suit were bought by complainant’s father in 1888, 1889, and 1890, and passed to himself on distribution of his father’s estate. How many dividends were paid by the Milwaukee road subsequent to 1887 does not seem to appear; but it is conceded that the last dividend of 7 per cent, upon its common stock was declared on January 13, 1891, and February 16, 18.91, was fixed for its payment. Subsequently the defendant company succeeded in effecting an exchange of its own stock for stock of the Milwaukee Company, and thus on August 19, 1893, had become the sole stockholder of the latter company. On the last-named date the Milwaukee Company issued its deed of conveyance and assignment, conveying all its railroad property and franchise and all stocks, bonds, and property of every description to the Chicago & Northwestern Company. In consideration therefor the latter company, among other things, assumed all the debts, liabilities, and obligations of the Milwaukee Company. It took possession of the property, and has since operated it as an integral part of its own railway, designated as the Ashland Division.
Ño question is raised as to the liability of the defendant to pay these bonds when they fell due; but two years before that date, in February, 1905, complainant presented his bonds to defendant company and demanded that the same be converted into common stock of the Milwaukee Company, or, if defendant could not comply in Milwaukee stock, that it convert into its own. Multitudinous questions have been raised and argued, which the majority of the court think it unnecessary to discuss. Many of them will be found set forth in Lisman v. Milwaukee, Lake Shore & West. Ry. (C. C.) 161 Fed. 472, a case affirmed without opinion in 170 Fed. 1020, 95 C. C. A. 671, certiorari refused 214 U. S. 520, 29 Sup. Ct. 700, 53 L. Ed. 1065. We prefer to place our decision on the language of the contract itself. Complainant did not declare his option to convert bonds into stock at any time within 10 days after the date fixed for the payment of any dividend, and, as has been seen, the only transfer provided for was one to be made within 10 dajes after the date fixed for the payment of any dividend upon the common stock. We find nothing obscure or ambiguous about that part of the contract (quoted above), and there is no other clause in it providing for any transfer. We concur with the conclusion, reached in the case above cited, that “the obligation (to transfer) *564did not accrue until and unless a dividend was declared,” and that “the contract, with all its limitations and conditions, remains the same after assumption as before.” Certainly the Milwaukee road did not obligate itself to declare dividends at any particular time, añd we are not persuaded that the subsequent transactions by which it was absorbed by the defendant are to be taken as the equivalent of a dividend declaration, in the absence of any averment or proof of any improper methods or any fraudulent intent. We see nothing harsh or inequitable in construing- the contract in conformity to its express language, especially when, as so construed, complainant or his predecessor has had certainly one and probably more opportunities to effect a conversion, but has elected not to avail of them. •
The decree is affirmed.