difference between one or the other of these two figures and either (a) the March 5, 1970 market value of the Gold Bonds, $168,655; or (b) the Debtor's cost of these Bonds, $251,776.22. Thus, the petitioner's claim may be calculated as either $511,044.82; $378,370.66; $210,715.66; or $126,594.44. I shall deal first, briefly, with the question of determining the amount of petitioner's claim, and then discuss the status thereof.
It is important to note that the proceeds of sales, whether of real estate or personal property, and whether cash or bonds, were never treated as payments on account of the mortgage debt, but simply as deposits of collateral security, to replace the amount by which the original mortgage security had been reduced. Petitioner's "claim" is not for payment as such, but for the deposit of additional collateral.
Petitioner's contention that the correct amount to be accounted for by reason of the Adirondack branch transaction is $511,044.82, is clearly without merit. In the accounting which was supplied on March 5, 1970, expense deductions were claimed which reduced this sum to $378,370.66. Neither then, or at any time until the hearing of the present petition, did the petitioner question the accuracy or validity of these deductions. The testimony at the hearing was to the effect that these deductions were supported by the accounting records of the Debtor, and the petitioner does not suggest that there is any evidence to the contrary. Accordingly, for purposes of the present proceeding, the amount to be accounted for will be deemed to be $378,370.66.
In view of the practice followed on previous occasions, there is likewise no merit in petitioner's contention that the entire amount to be accounted for should be deposited in cash, rather than in Gold Bonds.
While it would seem, from the language of the mortgage indenture, that the market value of the Bonds on the date of deposit would be the relevant consideration, the parties were free to adopt their own interpretation of "equal or greater value" as used in the indenture. Under the circumstances, it would seem that these parties should have been uniquely qualified to judge the correct value to be assigned to the Gold Bonds which were deposited. It is clear that, on each previous occasion when Gold Bonds were deposited as substitute collateral, they were valued at the actual cost to the railroad; in some cases, this cost may have closely approximated the market at the time, but the correspondence makes it clear that the cost figures were used.
It is a fair inference from the record that the parties were not overly concerned with the market price of the Bonds at any given time. Since New York Central and, later, the Debtor, had assumed the obligation of the Bonds of the Mohawk and Malone, and since everyone apparently assumed that the railroad would be good for the money, the parties apparently regarded the deposit of collateral as more or less a formality. It would be difficult otherwise to explain the failure of all parties to take any steps to restore the security until nearly nine years after one of the principal segments of the Mohawk and Malone Railroad had been dismantled and dispersed.
It therefore appears that the maximum amount by which it can properly be claimed that the security of the mortgage has been diminished without the consent of the indenture trustee, by reason of the Adirondack branch transaction, would be $126,594.44, the difference between the proceeds of the dismantling and the cost of the Bonds deposited on March 5, 1970.
Assuming, for present purposes, that the record establishes a wrongful diminution of the security value of the petitioner's mortgage, to the extent of $126,594.44, the next question is whether the petitioner is entitled to any relief at the present time. Obviously, the impairment of security does not necessarily mean loss to the bondholders. The total amount due on the mortgage, and the extent and adequacy of its lien, are matters to be determined in the proofs of claim program, and ultimately incorporated in any plan of reorganization which may eventuate from these proceedings. If, as petitioner apparently anticipates, the remaining assets subject to the Mohawk and Malone mortgage are of considerably less value than the aggregate amount of first mortgage bonds outstanding, it would seem that the petitioner would have reason to press a claim against the Debtor's estate for waste; but the amount of this claim and the priority to be assigned to it are proper subjects for disposition in connection with adoption of a plan of reorganization. The only issue raised by the present petition which can now be determined is whether the petitioner still has a lien on the material which was salvaged from the Adirondack branch, or some other, less specific, kind of lien upon the assets of the Debtor.
The petitioner characterizes its present request for relief as being "in the nature of a reclamation petition," on a constructive trust theory. Alternatively, the petition seeks the declaration of an equitable lien. Under either characterization, an essential requisite is an identifiable res : In re Dier, 296 F. 816, 819 (3d Cir.), cert. denied, 265 U.S. 584, 44 S. Ct. 459, 68 L. Ed. 1191 (1924); 3 Collier Bankruptcy, P60.37 at pp. 932-33, n. 59 (14th ed. 1971); Restatement of Restitution, § 160, comment i, § 161, comment e. The intermingling of these assets with the general assets of the Debtor (which incidentally, was clearly permitted under the mortgage) prevents the imposition of a trust relationship with respect to either the assets or their proceeds. Central States Corp. v. Luther, 215 F.2d 38 (10th Cir. 1954); 4A Collier Bankruptcy, P70.25(2), 70.62; Restatement of Restitution, § 215. See also the opinion of this Court in support of Order No. 265 in these proceedings (Greyhound Lines, Inc. reclamation petition).
On the present record, the location, identity, ownership, and even existence, of the material salvaged from the Adirondack branch are matters of conjecture. It may be assumed that most of this material found its way into other parts of the Debtor's rail system, but no attempt has apparently been made to trace them; whether there are still available records which would make such tracing possible after this lapse of time may be doubted. Assuming these assets are traceable, they would presumably be subject to other liens, in any event. The petition will be denied.