28 F. 729 | U.S. Circuit Court for the District of Eastern Missouri | 1886
(orally.) In the matter of the intervening petition of ' the Lackawanna Iron & Coal Company in the case of Olyphant v. St. Louis Ore & Steel Company, the facts are that the ore and steel company, organized for the manufacture of steel rails as well as for the
At the time the receiver was appointed, the value of the rails delivered by the Lackawanna Company was $167,248.12. Of that sum $109,207.79 had been paid; $22,040.33 remained confessedly unpaid; $36,000 had been disposed of, temporarily at least, by the Ore and Steel Company sending their accepted drafts on Cherrie & Co. to the Lackawanna Company, giving assurances that those drafts would be paid by Cherrie & Co., and directing the Lackawanna Company to collect those drafts, and apply the amount on the claim. Those drafts were accepted by Cherrie & Co., but shortly thereafter Cherrie & Co. became insolvent, and an assignee was appointed under the laws of the state of Illinois, in which they did business. The Lacka-wanna Company presented those acceptances to the assignee, and they were allowed, but'nothing has ever been realized upon them. A part of the claim of the Lackawanna Company is for that sum of $36,000. The Ore and Steel Company insists that the action of the Lackawanna Company in presenting these acceptances to Cherrie’s assignee, and obtaining an allowance, was equivalent to a personal appropriation of those acceptances, and made them to operate as payment. We think not. They were never taken, in the first instance, as payment. There was no agreement that they should be accepted as payment. They were received under directions to collect whatever could be collected on them, and apply on the debt; and the mere fact that the Lackawanna Company proceeded in good faith to try and collect them of the assignee of Cherrie & Co. did not amount to an appropriation by it of those acceptances so far as to release its claims against the Ore and Steel Company. We think, therefore, the master was right in allowing that amount as a demand against the Ore and Steel Company.
In the petition filed in July by the trustee of one of the mortgages on the Ore and Steel Company, he stated the insolvent condition of the Ore and Steel Company; set forth these contracts; and prayed for the appointment of a receiver, with power to maintain and operate a railroad which belonged to the Ore and Steel Company, to keep the same in proper repair, and to operate the coal and ore mines, and to carry out and perform said contracts for the delivery of coal and ore, and the purchase and sale of steel rails.
In the order of the court appointing the receiver, he was directed
Neither the language of the petition, nor of the order of tho court, in terms expresses any such idea. The petitioner did not ask that this unsecured claim be awarded priority. The court did not direct that it should be given, and, as well suggested by counsel for the receiver, it would be a startling doctrine that the court appointing a receiver, and directing him to take possession of properties, must in that order, or by virtue of that act, wipe out all incomplete contracts and partially fulfilled agreements, at the risk of giving to the past-due general claims of parties holding these incompleted agreements a priority over secured liens. The court takes possession of the property for the benefit of all concerned, and should manage it with that purpose in view; making, even if it has the power, no other changes in the several relations of creditors to each other and to the common debtor than are absolutely necessary for the accomplishment of the main purpose. The interests of all parties oftentimes will be promoted by
Finally, a claim for damages for a failure to fully perform the contract was made and allowed by the master. Of this the receiver complains. Under the original contract there were to be some thousands, of tons delivered during September, October, November, and December. They were not received, — the railroad company refusing to take them, and the receiver being unable to dispose of them; and the Lack-awanna Company claims damages from the Ore and Steel Company for the non-fulfillment of that part of the contract. The master finds that the market value of rails of the kind stipulated for in the contract during that fall season was $30. The contract price was $35. The master therefore gave the Lackawanna Company an allowance for its damages, based upon that difference, — a sum amounting to $23,001. The receiver contends that that was improper; that the measure of damages would be the difference between the cost to the Lackawanna Company of constructing the rails and the contract price; and that, as there was no testimony before him as to what the cost of construction would in fact have been, there is no basis for an assessment of damages.
The master finds, and the testimony shows, that there was a market value to rails of this description, and that the market value was $30»
Those are the three questions presented; and, as we agree with the master, the exceptions will be overruled, and the report confirmed.