Wood v. Guarantee Trust and Safe Deposit Co.

Citations

• 128 U.S. 416
• 9 S. Ct. 131
• 32 L. Ed. 472
• 1888 U.S. LEXIS 2231

Syllabus

<p>A debt contracted for “ construction” is not entitled to the priority of payment, in proceedings for the foreclosure of a mortgage of the property of a railroad corporation, which is recognized in Fosdick v. Schall, t\\> U. S. 235, as the equitable right in some cases of a creditor for “ operating expenses.”</p> <p>The doctrine in Fosdich v. Schall has never yet been applied in any case except that of a railroad, and whether it will be applied to any other case, queere.</p> <p>When a third party with his own money takes up maturing coupons on bonds of a corporation, without knowledge of the holders, it is a question of fact, to be determined by the proof, whether it is intended to be ■ a payment, or a purchase which leaves the coupons outstanding.</p> <p>The coupons in dispute in this case having been dishonored before they came into the hands of the appellants, were subject in their hands to all defences which existed against their assignor; and, it being evident-that, without the knowledge of the holders of the bonds to which those coupons W'ere attached, he used his money to pay the coupons on bonds which had been sold solely in order to enable him to float the rest of the issue; Held, that it would be inequitable to allow him, either a preference over those to whom he had sold the bonds, or coequal rights with them.</p>