Philadelphia & Baltimore Central Railroad v. Johnson

The opinion of the court was delivered, by

Woodward, C. J.

No misconception can be more complete than that which proposes our ruling in Ashurst v. Montour Iron Company, 11 Casey 30, and in Bradley v. The Chester Yalley Railroad Company, 12 Casey 154, as a defence to the present action. These were bills in equity, the first by the trustees in a corporation mortgage, asking us to decree a sale of the mortgaged premises which they had power to make without our decree ; the other, a suit by bondholders to compel the trustees to sell the premises for non-payment of interest on the bonds. We declined jurisdiction in both cases, in Ashurst’s, because our equity powers did not extend to such a case as the bill presented; in.Bradley’s, because no part of the principal debt was due, and no power of sale was contained in the mortgage for failure to pay interest, but another and independent remedy for that default. The defect of jurisdiction pointed out in Ashurst’s case has since been remedied by statute, but what had the ruling in either of these cases to do with an action at law upon the bond of the corporation ? This was an action of debt on bonds, and if there was a breach of condition, the fact that a mortgage had been given as security for the debt with trusts and covenants, which a court of equity would control and enforce in a proper case, afforded not a shadow of defence. The bond was the principal debt, the mortgage the incidental security. Remedies peculiar to each exist, both in law and equity, but they do not clash and destroy each other, they co-exist.

Under the mortgage, the power of the trustees to sell for breach of condition of the bonds, is upon the written request of the holders of not less than $100,000, in amount of said bonds, but this is not a proceeding by the trustees upon the mortgage, and therefore, that limitation is irrelevant.

On the face of the record the plaintiff had a good cause of action, and the main defence suggested in the affidavit was no answer to it.

The affidavit also alleges that the “ coupons held by plaintiff were never delivered to the defendants as required by the terms of said bonds, and that payment thereof was in no case demanded upon the day of the maturity of said coupons, or any of them.”

The coupons were deliverable only on payment, and no payment, or even readiness and willingness to pay is alleged. Nor is it denied that they were presented after the day of payment. They were payable at the office of the company in Philadelphia, and it was necessary to a complete defence, to allege that the company was ready at that place to pay, but that the coupons had never been presented. Payment is matter of defence as between debtor and creditor, which must be shown by positive acts.

Coupons payable at a particular office, are like notes payable at a specified bank, and import that the debtor will have a deposit at the time and place specified, to answer what is substantially a draft on the fund. Without showing that such a fund was provided, it was no defence to allege a want of demand. ■

The judgment is affirmed.