Sunflower Oil Co. v. Wilson

Citations

• 142 U.S. 313
• 12 S. Ct. 235
• 35 L. Ed. 1025
• 1892 U.S. LEXIS 1974

Syllabus

<p>An oil company contracted with a railway company to purchase certain rolling stock and lease .the same to- the railway company at an agreed rental, the latter agreeing to purchase the same.on or before a given day and pay for it in cash, or if it should be unable to do so to turn Jt over to the oil company, at the expiration of the contract, in good order and condition. It was further agreed that freights earned by the railway by transportation for the oil company might be applied to the payment of the rental and of the purchase money. The railway company was insolvent and, before the expiration of the contract, its mortgage bondholders had proceedings instituted in equity for the foreclosure of their mortgage, in which W. was appointed receiver. The receiver continued to use the rolling stock. The oil companylntervened, claiming to recover from the receiver the balance of the purchase money, and to secure the carrying out of the contract by the receiver, and the retention by it of the amount of freights due from it, and their application to the payments of the rent and the purchase money. The receiver answered, declining to complete the contract, and averring that the rental had been paid in full and that there was a balance due him for freight. He also • filed a cross-petition to recover the surplus. Held,</p> <p>(1) That the contract provided that if the railway company became unable to pay its current debts in the ordinary course of business, it should be released from its obligation on returning the property;</p> <p>(2) That the receiver had the right to return the property, upon complying with the terms of the contract in respect thereto;</p> <p>(3) That, notwithstanding the absence of a provision in- the contract forfeiting payments already made, in case of failure to complete the purchase, it was open to doubt whether an action at common law would lie to recover such payments;</p> <p>(4) That the dismissal of the intervening petition did not necessarily i