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co, ed, association, railroad, cars, car, passed and retaking


Statutes have been passed in nearly all the states and territories providing that con ditional sales or contracts of leasing or hiring of railroad equipment shall be valid if duly acknowledged and recorded, and the name of the vendor or lessor placed on both sides of each car. Most of these acts are substantial ly uniform in their language. There is some diversity among them as to the place of rec ord, some specifying the county where the principal office of the vendee is, others the counties through which its line runs, and still others the office of the secretary of state. Many of these acts were passed through the instrumentality of Joseph I. Doran, Esq., in 1881 to 1883, and the others were passed in 1891 and subsequently, by the efforts of the present editor. The Utah act is not uniform ; such acts did not pass in California, Idaho, or Nevada.

The lien on, or title to, cars thus sold is not subordinate to the lien of the company's mortgage; Fosdick v. Car Co., 99 U. S. 256, 25 L. Ed. 344; even if the contract has not been, recorded; Meyer v. Car Co., 102 U. S. 1, 26 L. Ed. 59.

Contracts of this kind usually contain a clause that the vendor or lessor may retake the property on default in the payment of installments. Statutes in some of the states forbid the retaking of chattels sold under the installment plan except upon the condi tion of refunding the purchase-money paid, less a certain proportion to cover the depre ciation. See Well v. State, 46 Ohio St. 450, 21 N. E. 643.

There is a conflict of authority as to the right of the vendor to collect unpaid pur chase-money after retaking the property. Some cases hold that the retaking excludes further recovery ; other cases hold that the remedies are not inconsistent. See Cole v. Hines, 81 141d. 476, 32 Atl. 196, 32 L. R. A. 455, where the cases are collected. The fact, that the property, has been destroyed after possession has passed to the conditional ven dee or lessee does not relieve him from mak ing the periodical payments ; Tufts v. Grif fin, 107 N. C. 47, 12 S. E. 68, 10 L. R. A. 526, 22 Am. St. Rep. 863 ; Burnley v. Tufts, 66 Miss. 48, 5 South. 627, 14 Am. St. Rep. 540; contra, Ascue & Hinchman v. Aultman & Co., 2 Willson, Civ. Cas. Ct. App. (Tex.) § 497. See also Swallow v. Emery, 111 Mass. 355.

Usually a clause is inserted covering this ground, and the contract provides that the vendor, upon retaking, shall sell the prop erty and credit the proceeds on the unpaid installments, holding the vendee for the resi due then remaining unpaid.

The usual lease notes or warrants given to cover the periodical payments have been held to be negotiable instruments ; Chicago Ry. Equipment Co. v. Bank, 136 U. S. 268, 14 Sup. Ct. 999, 34 L. Ed. 349.

A car trust association is an association of capitalists formed to buy and sell rolling stock, usually for a particular road. The members furnish the funds to buy the proper ty and the association delivers It to the railroad company, usually through the inter vention of a trustee, under a conditional sale (sometimes in the form of a lease), the pur chase-money being payable in a series of years, by installments, and the title to pass in the railroad company upon the payment of the final installment. The trustee issues cer tificates to the members of the association indicating the amount of their investment. The railroad company pays the installments with interest to the trustee, who distributes to the holders of the certificates. In Mills v. Hurd, 29 Fed. 410, such an association was held an unincorporated association resem: hung those partnerships which are not dis solved by the death or bankruptcy of a mem ber, or by the assignment of a member's inter est, and such as are referred to in Bissell v. Foss, 114 U. S. 252, 5 Sup. Ct. 851, 29 L. Ed. 126. They are analogous to mining partner ship ; Skillman v. Lachman, 23 Cal. 206, 83 Am. Dec. 96. See PARTNERSHIP. They are said to be unincorporated joint stock associa tions with transferable shares ; Poll. Contr. 222.

As to the status of car trust cars under railroad receiverships, see LEASE; MORTOACIE ; RECEIVER ; RECEIVERS' CERTIFICATES.

See a pamphlet by Davis & Browne, and a paper by the present editor in Am. Bar Asso. Reports (1885); 1 Foster, Fed. Pr. 781.

Cars of other companies in use on a rail road are materials furnished for its opera tion, and claims for their loss when destroy ed are properly payable by the receivers as operating expenses; Grand Trunk By. Co. v. R. Co., 88 Fed. 636.

A railroad company receiving the cars of other companies to be hauled in its trains is bound to inspect such cars before putting them on its trains, and is responsible for the consequence of defects in them which might have been discovered by a reasonable in spection ; Baltimore & P. R. Co. v. Mackey, 157 U. S. 72, 15 Sup. Ct. 491, 39 L. Ed. 624.