Philadelphia & Reading Railroad v. Smith

The holder of over due interest coupons and interest warrants, whether attached to or severed from bonds issued by a railroad corporation payable to bearer, may maintain an action thereon against the corporation, and may recover interest on the amount of said coupons and warrants from the time they became due and payable.

Error to the Court of Common Pleas No. 3, of Philadelphia county: Of July Term, 1883, No. 196. Debt, by John F. Smith, against the Philadelphia and Reading Railroad Company, to recover the amounts of (1) certain scrip certificates, (2) certain interest coupons attached to said certificates, and (3) certain detached interest -warrants, originally annexed to bonds, (4) interest accrued on said coupons and warrants from the time the same became due and payable. The plaintiff filed copies of the said instruments, which, except as to numbering and amounts, were in the following form: [SCRIP CERTIFICATE.] No. 130. UNITED STATES OF AMERICA. $1,000. STATE OF PENNSYLVANIA. The Philadelphia k Beading Bailroad Company. This is to Certify. That the Philadelphia & Reading Railroad Company is indebted to bearer in the sum of one thousand dollars lawful money of the United States of America, which sum the said Company promises to pay to bearer, at its office in the City of Philadelphia, on the first, day of July, one thousand eight hundred and eighty-two, with interest thereon from the first day of July, A. D. one thousand eight hundred and seventy-seven, at the rate, of six per cent, per annum, payable semiannually, on the presentation and surrender of the annexed' coupons as they respectively mature, both principal and interest being payable without deduction for any tax or taxes which the Company may, by any law of the United States or State of Pennsylvania, he required to retain therefrom for National or State purposes — the Company hereby agreeing to pay such taxes. The principal of the indebtedness represented by this certificate shall, at the option of the holder, be convertible, at par, into the bonds of the Philadelphia & Reading Railroad Company of the issue known as the Income Mortgage Loan, and secured by the mortgage bearing date the first day of December, A. D. 1876, executed and delivered by the said Company to Edwin M. Lewis, as mortgagee in trust; such conversion to be made, however, only on the presentation and surrender of certificates of this issue in sums of one thousand dollars, or any multiple thereof, with all mimatiired coupons annexed, and upon the payment of the excess of interest accrued on the -said bonds over that accrued on the said certificates at the date of the said conversion. Witness the corporate seal of the said Philadelphia & Beading Bailroad Company, duly attested, this thirtieth day of June, A. D. one thousand eight hundred and seventy-seven. GEO. DeB. KEIM, [seal.] President pro tem. Attest: D. J. Brown, Secretary. [coupons attached to the above.] The Philadelphia & Reading Railroad Company Will pay to bearer, at its office in the City of Philadelphia, thirty dollars, being six months’ interest, due July 1st, 1880, upon Scrip Certificate No. 130. $30. D. J. Brown, Secretary. INTEREST. WARRANTS, DETACHED FROM BONDS.] “CONTENTIBLE LOAN 1873-93. “The Philadelphia and Reading Railroad Company. “ Interest Warrant on Bond No. 25. “ Thirty-five Dollars. “ Payable without deduction for taxes at the office of the Company in the City5of Philadelphia. “ July 1st, 1882. “ $35. “J. W. JONES, Secretary I There was no defence to the claim to recover the principal of the scrip certificates, nor to recover the face amount of the interest coupons attached thereto. The defendant corporation, by its president, filed an affidavit of defence, averring:— “ That copies of the respective bonds referred to in the said interest warrants, copies of which are filed, have not been filed, and that no action can be maintained upon the said interest warrants, as separate and distinct instruments. “As to various coupons, Eos. 6 to 10 inclusive, due July 1st, 1880, January 1st and July 1st, 1881, January 1st and July 1st, 1882, on $15,400 bonds due July 1st, 1882, deponent is informed and believes that the plaintiff claims to recover judgment on the said bonds, copies of which have been filed, not only for the principal sum due thereon, and for interest on the said principal', which accrued from time to time, but that he also claims interest on the warrants or coupons from the date of their .maturity, as if the same we^e distinct and independent obligations of the defendant; although the said unpaid interest warrants or coupons, as appears from the copy filed, were never detached from the certificates, but still remain component parts thereof; and on behalf of defendant, the deponent suggests that the interest recoverable in this suit, is that only which has accrued upon the certificates themselves, and not that which may be claimed to have accrued upon the undetached interest warrants or coupons.” The plaintiff took a rule to show cause why judgment should not be entered for the amount claimed, for want of a sufficient affidavit of defence, which rule the court, after argument, made absolute, and damages were assessed for the amount of the face of said scrip certificates, interest warrants, and interest coupons, together with interest at six per cent, upon the amounts of said interest warrants and coupons, from the dates respectively when the same became due and payable. The defendant thereupon took this writ of error, assigning for error inter alia the action of the court in entering judgment for the face value of the detached interest warrants, together with interest thereon, and for interest on said coupons from the several dates when the same respectively became due and payable.