Philadelphia Trust, Safe Deposit & Insurance v. Scott

Robinson, J., delivered the opinion of the Court. On the 2nd of October, 1872, the Maryland and Pennsylvania Railroad Company issued bonds for the purpose of raising money to construct its road; and, at the same time, the company conveyed to the appellant, a corporation chartered by the State of Pennsylvania, all its property and franchises, in trust, to secure the holders of said bonds. At the time of the execution of “this conveyance, it does not appear that anything had been expended by said company, either in the construction or equipment of its road. Subsequently, in pursuance of an Act of the Legislature, the Maryland and Pennsylvania Company transferred its property and franchises to the Baltimore, Philadelphia and New York Railroad Company, and this latter company became indebted to Walter Scott, one of the appellees, for labor, services and materials furnished in the construction of its road.

Upon this indebtedness, judgment was recovered, and the appellant now seeks to restrain the judgment creditor and the sheriff from selling the property and franchises of the new company, upon the ground, that the Maryland and Pennsylvania Company had conveyed its property and franchises to the appellant, in trust, to secure the payment of bonds issued by said company, — that these bonds were outstanding in the hands of bona fide purchasers,— and that, by the terms of the purchase, under which it had acquired the franchises of the old company, the Baltimore, Philadelphia and New York Company assumed and became liable for the payment of said bonds. The case was heard upon bill and answer, and this appeal comes to us from an order of the Court below, dissolving the injunction.,, ⁴⁵³ It was admitted in argument, that when a case is heard upon hill and answer, if the answer denies the equity of the bill, the injunction, as a general rule, must he dissolved. The inquiry then is, does the answer in this case deny the equity relied on in the hill? How, the claim to the relief prayed, depends entirely upon the averment that the Maryland and Pennsylvania Company had issued certain bonds, to secure the payment of which the said' company had conveyed its property and franchises to the complainant as trustee, and that these bonds were outstanding in the hands of bona fide purchasers.

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