Berwind-White Coal Mining Co. v. Borinquen Sugar Co.

HamixtoN, Judge,

delivered the following opinion:

After the main sale in this case, the court rendered a decree for a deficiency judgment, and, upon application, on December 29, 1914, ordered the sale of property available for the purpose of satisfying this judgment. The master gave notice as directed, and on February 8, 1915, cried off the property en bloc to certain individuals mailing up what is called the reorganization committee of the Borinquen Sugar Company, for the sum of seventy-five thousand dollars ($75,000) and the assumption of preferred claims, bonds, and other encumbrances on the property sold.

The master filed his report on February 9, 1915, and certain exceptions of Ulman et al. were argued after the expiration of the twenty days for exception.

1. The first exception denies the jurisdiction of the court, because the foreclosure sale was not at the instance of the trustee of the bondholders. This exception, if valid at all, 'should have been made by the trustee of the bondholders, who *553ja tbe proper person to represent tbe mortgage, or some showing made that tbe trustee declines to act. It may be added that tbe sale in question is not one under tbe mortgage, but under tbe creditors’ bill, and would not involve tbe question sought to be raised. This and similar matters have been disposed of on previous occasions, and it is admitted that tbe point is now raised merely for tbe sake of a consistent record. As it has been already raised, it may not be necessary for that purpose, but, being raised by this exception, tbe exception is overruled.

2. Tbe second exception is that tbe sale of tbe properties-en bloc, including real and personal, prevented competition, making it impossible for any other person than tbe reorganization committee to bid at tbe sale. No evidence whatever is-presented to sustain this exception, which relates to a matter-of fact. Tbe way such points are usually presented is by an affidavit of an expectant bidder, showing that be would have-offered a certain sum for a part of tbe property and was prevented in this case by tbe fact that tbe sale embraced other-property also, which be did not want. Neither this nor any other form of proof is offered. Looking at tbe matter in the-abstract, it is just as possible, if not-more probable, that separating property used in tbe operation of a central would diminish tbe returns as a whole, even if it did increase the-returns on some particular item. Tbe one supposition is at least as likely as tbe other; but as no proof is offered either way, tbe exception must be overruled.

3. Another exception seeks to raise tbe point that tbe mortgage under which tbe exceptors claim to bold bonds covers the property sold, and that therefore they are injured by the-*554proceeding. Apart from the point above mentioned as to who .should raise this question, the contention must rest upon the assumption that the statement in the mortgage that the lien is to cover after-acquired property amounts to an incorporation' into the mortgage of this property when afterwards acquired. No authority is cited for this proposition, and it would seem to be contrary to the whole plan of the registry laws of Porto Pico. Art. 3 of the mortgage law reads in part as follows: '“The notary shall draw up a document setting forth a description of the estates,” etc., “in order that said document may be recorded.” And art. 9 of the same law is in part as follows: '“Every record made in a registry shall set forth the following ■details: 1. The nature, location, and bounds of the real property, the subject of record, or which is affected by the right to be recorded, and its area according to the standard used in the country and its equivalent in the metric decimal system, :and the name and number of the estate, if shown in the instrument.” This after-acquired property was not described and in point of* fact it would have been impossible to describe it in •advance. The clause may amount to a contract which is subject to specific performance. It is not perceived how it could amount to more, and it is not neessary to decide that it goes •even so far. The exception is overruled.

4. The last exception claims that the purchase by the re■organization committee of the land mentioned in the report violates the joint resolution of Congress, approved May 1, 1900, as to the holding of land by corporations. That resolution is ■on this point as follows: “No corporation shall be authorized to conduct the business of buying and selling real estate or be permitted to hold or own real state except such as may be rea*555sonably necessary to enable it to carry out tbe purposes for wbicb it was created, and every corporation hereafter authorized to engage in agriculture shall by its charter be restricted to the ownership and control of not to exceed five hundred acres ■of land.” [30 Stat. at L. 716.]

The point as at present raised is premature. This reorganization committee is in the first place not a corporation, and, in the second place, it will not be assumed by the court that it will handle the property illegally. How far the point can be raised by an individual, or whether it must be raised by the government alone, need not be discussed at this time. In any event, the exception is not well taken.

It follows therefore that an order must be entered overruling the exceptions and confirming the report, and it will be so ordered.