Landis v. Western Pa. R. R.

Citations

• 2 Monag. 755
• 1890 Pa. LEXIS 1304

Syllabus

<p>In a bill filed to foreclose railroad mortgage, given by the Northwestern Railroad Co., the decree authorized such bondholders as should become purchasers to pay their bids in bonds. The railroad was purchased by Hirst for certain bondholders, and a master was appointed to report distribution and the form of the conveyance. The master reported that Hirst purchased on behalf of certain bondholders named, not including the plaintiff in this action, and of such others as might wish to join in the purchase and pay their proportions of the purchase money and expenses, and that the property was_bought to sell again, and that, at a meeting of the bondholders, it had been agreed that the holders of three-fourths in amount of the bonds should have power to order a sale, etc. The master also reported a form of deed to Hirst, which was approved by the court and executed, in which it was recited that it was in trust for all the bondholders. Afterwards, in pursuance of such order by the holders of three-fourths of the bonds, Hirst sold, free and discharged from all trusts, to the Western Pa. R. R. Co., a company organized by the purchasing bondholders to succeed the Northwestern Railroad Co. The Act of March 22, i860, incorporating the Western Pennsylvania Railroad Co., recited that said company was composed of persons named, and “ all others who hold mortgage bonds,” but the preamble set out the deed to Hirst “ in trust for all the bondholders who participated in the said purchase,” and that it was desirable “ to reimburse the said bondholders for the expenditure of money and labor.” The supreme court held that Hirst’s'duty was to distribute stock to such bondholders as participated in the original purchase, or subsequently exercised their option to come in within such reasonable time as not to prejudice the rights of others ; that such option could not be exercised after the deed was made from Hirst to the defendant clear of all trusts ; and that bondholders not availing th