Drury v. Cross
Supreme Court of the United States
Appeal from the Circuit Court for Wisconsin. The case was this: Bailey & Co., of Liverpool, England, held, notes against the Milwaukee and Superior Railroad Company, indorsed by four of its directors, for about $21,000 (the price of iron furnished to lay the road), and as collateral security for payment, $42,000 in mortgage bonds of the road.
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Appeal from the Circuit Court for Wisconsin. The case was this: Bailey & Co., of Liverpool, England, held, notes against the Milwaukee and Superior Railroad Company, indorsed by four of its directors, for about $21,000 (the price of iron furnished to lay the road), and as collateral security for payment, $42,000 in mortgage bonds of the road. Two hundred and eighty thousand dollars in similar bonds, but which had never been issued, were sealed up and deposited with M. X. Jesup & Co., not to be issued until the debt to Bailey & Co, was paid, and twenty-seven miles of the road were built. The…
1Opinion of the CourtJustice Davis
The transaction which this case discloses cannot be sustained by a court of equity. The conduct of the directors of this railroad corporation was very discreditable, and without authority of law. It was their duty to administer the important matters committed to their charge, for the mutual benefit of all parties interested, and in securing an advantage to themselves, not common to the other creditors, they were guilty of a plain breach of trust. To be relieved from their indorsement, they were willing to sacrifice the whole property of the road. Bound to execute the responsible duties…
2Cited by68 opinions
- Twin-Lick Oil Co. v. MarburySupreme Court of the United States · 1876
- McGourkey v. Toledo & Ohio Central Railway Co.Supreme Court of the United States · 1892
- Wardell v. Railroad Co.Supreme Court of the United States · 1881
- Beach v. MillerIllinois Supreme Court · 1889
- Francis Shunk Brown 3rd Esq. Trustee in Bankruptcy for I. J. Knight Realty Corp. v. Presbyterian Ministers Fund, a Pennsylvania CorporationCourt of Appeals for the Third Circuit · 1973
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