Moran v. Pittsburgh, C. & St. L. Ry. Co.

32 F. 878, 5 Ohio F. Dec. 712, 1887 U.S. App. LEXIS 2351
CourtUnited States Circuit Court
DecidedNovember 24, 1887
StatusPublished
Cited by1 cases

This text of 32 F. 878 (Moran v. Pittsburgh, C. & St. L. Ry. Co.) is published on Counsel Stack Legal Research, covering United States Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moran v. Pittsburgh, C. & St. L. Ry. Co., 32 F. 878, 5 Ohio F. Dec. 712, 1887 U.S. App. LEXIS 2351 (uscirct 1887).

Opinion

Jackson, J.

Under proper authority of law and resolutions of the corporation, the Cincinnati & Muskingum Valley Railway Company [879]*879(hereinafter, for brevity, called the “Valley Railway Company”) on September 1, 1870, executed to Charles Moran and I. Edgar Thomson, as joint trustees, a conveyance of its property, to secure certain bonds of the company to the amount of $1,500,000, dated September 1, 1870, and payable January 1, 1901, with interest coupons attached, and payable semi-annually in the city of New York. The company’s line of road at the date of this mortgage was constructed from Morrow to Zanes-ville, Ohio, but was to be extended to Dresden, Ohio. In pursuance of the resolution of the board of directors, this mortgage conveys to said trustees, or to the survivor, in fee-simple, all the right, title, and interest of said Valley Railway Company in and to its line of railroad from Morrow to Dresden, “with the appurtenances now completed, or to be hereafter constructed, together with all the lands, tenements, hereditaments, fixtures, buildings, Cars, engines, tools and machinery, franchises, privileges, interest, and estate of the first party appertaining thereto, which the party of the first part now possesses or owns, or may hereafter acquire,” in “trust for the equal benefit and security of the bond and coupon holders; with the provision that, until default shall be made in respect to something herein to be done or kept by the party of the first part, it shall be suffered and permitted to possess and operate, manage and enjoy, its said railway, with its appurtenances and appendages, and to take and use the rents, income, profits, and issues-thereof, in the same manner and with the same effect as if this deed had not been made.”

It further provides that, after 90 days’ default by the company in the payment of interest or principal of said bonds, the trustees, or the survivor of them, on request of the holders of the one-third of the outstanding bonds, may and shall enter into and take possession of the mortgaged premises, hold, use, manage, and employ the same, making all needful repairs, alterations, and additions, and, after the payment of all expenses incident thereto, apply the proceeds thence arising to the “pro rata” payment of all principal and interest remaining due and unpaid on said bonds. It likewise contains a power of sale to be exercised by the trustees, or the survivor, at the request of one-half in amount of the bondholders, and in the event of a sale the trustees are empowered to execute a good and sufficient deed of conveyance in fee-simple to the purchaser of the property, and distribute the proceeds, after paying the expenses of the sale, among those entitled to the same. Then follows this provision: “And the said party of the first part hereby covenants to execute and deliver any further suitable conveyances that may be requisite for carrying into effect the object of those presents; particularly for the more perfect assurance of any property hereafter acquired by the party of the first part, and included in the description in this deed.”

After the execution and due registration of this mortgage, the mortgagor, said Valley Railway Company, leased and demised to the Pitts-burg, Cincinnati & St. Louis Railway Company, (hereafter called, as it is most familiary known, the “Pan-Handle Company,”) for the term of 99 years from January 1, 1878, its entire line of road constructed, and to' be constructed, together with all the depots, station buildings, [880]*880appurtenances, and property, real and personal, thereunto belonging and appertaining. This lease appears to have been ratified or approved by the majority stockholders of the two companies at meetings held by them, respectively, for that purpose. The lessor covenants and agrees “that the party of the second part (the lessee) shall, at all times during the term aforesaid, have full and exclusive power, right, and authority to use, manage, and work the said railway of the said party of the first part, and shall have the right to fix the tolls thereon, (but not at a higher rate than is authorized by the charter of the party of the first part.) And, further, said party of the second part shall have full, free, and exclusive right to charge and collect all of said tolls on, and freight charges and dues to accrue from, said road during said term, and to appropriate the same in the manner hereinafter mentioned, and shall have, use, exercise, and enjoy all the rights, powers, and authority aforesaid, and all other lawful powers and privileges which can or may be lawfully exercised and enjoyed, in or about the said demised railway and property, as exclusively, amply, fully, and entirely as the same might or could have been used, exercised, and enjoyed by said party of the first part had this lease and contract not been made, and as exclusively, fully, amply, and entirely as said party of the first part have authority by law to grant the same.”

The lessee company covenants that it will, at all times during the hereby demised term, work, use, manage, maintain, operate, and keep in public use the railway of the party of the first part,' with its appurtenances, etc., and will so work and operate said railway and appurtenances, with its equipment, as shall, in the judgment of the lessee, reasonably be required for and properly adapted to promptly and fully accommodate the business thereof, and shall and will collect and receive all of the said tolls, freight charges, and dues -which shall accrue as aforesaid, and apply and appropriate the same in the way and manner following, to-wit: First, to maintain and repair the railway and property, and pay operating expenses, including 8 per cent, on the engines of the lessee company used on the road, and the usual charge for its cars employed thereon, premiums on insurance, and all taxes assessed against the road and property by the state or United States.” Then follow these clauses:

“It being distinctly .understood that certain work yet to be done, and required to perfect and completely finish the said road hereby demised, as well as such additions and improvements thereto as the parties of the second part shall determine to be necessary, from time to time, for the prompt and economical movement of the traffic on and over said road, shall be done by and at the expense of the said first party. Second. To pay the surplus, if any thereafter remain, to the treasurer of the party of the first part: provided, however, that, in the event of the net earnings of the line of road hereby demised not being sufficient to protect the interest on the existing first mortgage bonds of the party of first part as it matures, the party of the second part shall advance the needful means to pay the coupons at maturity; charging any such advance over net earnings in open account, to be returned out of the subsequent earnings, and not otherwise

The other general provisions of the lease, such as the requirement io keep the demised railway and property in repair, the keeping of accurate-[881]*881accounts by the lessee, etc., need not be especially noticed, as they have no bearing upon the questions presented for determination. The considerations which led to this lease, the motives prompting its promoters, and the purposes sought to be accomplished by it, as disclosed in the record, need not bo sot out in detail. They form a curious and interesting chapter in the history of the railroad management.

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Cite This Page — Counsel Stack

Bluebook (online)
32 F. 878, 5 Ohio F. Dec. 712, 1887 U.S. App. LEXIS 2351, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moran-v-pittsburgh-c-st-l-ry-co-uscirct-1887.