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154 Ct. Cl.

Findings of Fact

Pursuant to this agreement of December 2, 1940, from April 10, 1941 to January 23, 1947 within the time as extended by the Bank, the Bank acquired without recourse as to principal the 20 "A" notes from plaintiff for a net amount of $212,410.81 for each note consisting of $223,590.33, the amount of each note representing principal, less a 5 percent commission to the Bank of $11,179.52. None of the series “A” notes was sold by plaintiff to the Bank prior to its release from escrow. The Bank computed its interest requirements on each of the series “A” notes purchased from plaintiff only from the date of purchase thereof. To the extent that interest had accrued on any of the series “A” notes prior to their sale by plaintiff, such interest belonged to plaintiff.

12. The following schedule sets forth the date the Bank acquired each of the series “A” notes under Contract EEC-1, the year the note was paid, the amount of the Bank's interest requirements calculated under its letter agreement with plaintiff, the interest paid by the Sorocabana Railway included in each note, the amounts paid by plaintiff to the Bank, and the amounts paid to plaintiff by the Bank during the years 1943 through 1952:

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All payments by the Bank to plaintiff in 1943 and in the years 1948 through 1952 were made from the excess of the

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Findings of Fact interest payments paid by the Sorocabana Railway in its series “A” notes over the Bank's interest requirements.

13. Under Contract EEC-2 the Central Railway issued the following promissory notes to the order of plaintiff as payee:

(a) Twenty (20) series “A” notes dated March 15, 1945, due semiannually from October 24, 1946 to April 24, 1956, each providing for the payment of $256,142.20. Of this sum, $211,033.73 represented principal payments and $45,108.47 interest. Interest payable by Central Railway was computed at the rate of 4.50 percent per annum beginning October 25, 1946.

(b) Twenty (20) series “B” notes dated March 15, 1945, due semiannually from October 24, 1946 to April 24, 1956, each providing for the payment of $109,775.20. Of this sum $90,443.02 represented principal payments and $19,332.18 interest. Interest payable by Central Railway was computed at the rate of 4.50 percent per annum beginning October 25, 1946.

The total interest to be paid by the Central Railway had been calculated over the life of the notes divided by the number of notes so that each note in each series included a pro rata or level amount of principal and interest. Each note in each series was initially placed in escrow with a New York bank and was released from escrow to plaintiff against shipments of material. Title to the materials shipped by plaintiff passed to the Central Railway in Brazil. Plaintiff supervised the installation of the equipment in Brazil.

14. Under date of March 31, 1945, plaintiff and the Bank entered into a letter agreement under which the Bank agreed to purchase from plaintiff without recourse as to principal the 20 series “A” notes of the Central Railway at their principal amount less a 5 percent discount. In this agreement plaintiff and the Bank agreed in part as follows:

2. Interest and commission. The Bank shall receive interest at the rate of four per cent (4%) per annum on the outstanding principal balance of the obligations or participation therein discounted or purchased hereunder. In the event the obligations bear or have included therein interest at a rate in excess of four per cent (4%) per annum the Bank shall receive interest on the foregoing basis at the higher rate.

As each obligation purchased by the Bank is paid an adjustment will be effected between the Bank and the

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154 Ct. CI. Findings of Fact Supplier as may be required to provide for the receipt by the Bank of interest at the rate aforesaid on the outstanding principal balance of all obligations then held by the Bank. Accordingly, in the event the amount collected by the Bank upon any maturity date is not sufficient to satisfy payment to the Bank of principal and interest to the date of payment on the outstanding principal balance of all obligations then held by the Bank, the Supplier will pay to the Bank such additional amount as may be required a foresaid; and, in the event an excess amount should be collected by the Bank upon payment of any obligation, the Bank will remit such excess to the Supplier. It is further understood that interest due to the Bank on the principal contained in any note purchased by it will be computed only from the date of such purchase.

In the event the Bank shall, at the request of the Supplier, discount or purchase any obligation or participation therein prior to the date from which interest is included in such obligation the Supplier shall be liable to the Bank, and shall pay at least semi-annually, interest at the rate aforesaid from the date of such discount or purchase to the date from which interest is included

in such obligation. Pursuant to said agreement, from February 7, 1947, to March 11, 1950, the Bank acquired without recourse as to principal 18 of the twenty “A” notes from plaintiff for a net amount of $200,482.04 for each note consisting of $211,033.73, the amount of each note representing principal, less a 5 percent discount by the Bank of $10,551.69. None of the series “A” notes was sold by plaintiff to the Bank prior to its release from escrow. The Bank computed its interest requirements on each of the 18 series “A” notes purchased only from the date of purchase thereof. To the extent that interest had accrued on any of the series “A” notes prior to their sale by plaintiff, such interest belonged to plaintiff. At the time the first two of the series “A” notes were released from escrow, payment thereon was already due. Plaintiff did not sell these notes to the Bank but collected the principal and interest thereon directly from the Central Railway.

15. The following schedule sets forth the date the Bank acquired 18 out of the 20 series "A" notes under Contract EEC-2, the year the note was paid, the amount of the Bank's interest requirements calculated under its letter agreement

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Findings of Fact

with plaintiff, the interest paid by Central Railway included in each note, the amounts paid by plaintiff to the Bank and the amounts paid to plaintiff by the Bank, or by the Central Railway on the two series “A” notes not acquired by the Bank, during the years 1946 through 1956 :

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All of the payments by the Bank to plaintiff in 1947 and in the years 1952 through 1956 were made from the excess of the interest payments paid by the Central Railway in its series "A" notes over the Bank's interest requirements.

16. Under Contract EEC-3, the Sorocabana Railway issued the following promissory notes to the order of plaintiff as Payee:

(a) Fourteen (14) series “A” notes dated May 24, 1945, due semiannually from December 1, 1947 to June 1, 1954, each providing for the payment of $558,932.16. Of this sum, $474,930.09 represented principal payments and $84,002.07 interest. Interest payable by Sorocabana Railway was computed at the rate of 4.50 percent per annum beginning June 1, 1947.

(b) Fourteen (14) series “B” notes dated May 24, 1945, due semiannually from December 1, 1947 to June 1, 1954, each providing for the payment of $239,542.36. Of this sum, $203,541.47 represented principal payments and $36,000.89

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154 Ct. CI. Findings of Fact interest. Interest payable by Sorocabana Railway was computed at the rate of 4.50 percent per annum beginning June 1, 1947.

The total interest to be paid by the Sorocabana Railway had been calculated over the life of the notes divided by the number of notes so that each note in each series included a pro rata or level amount of principal and interest. Each note in each series was initially placed in escrow with a New York bank and was released from escrow to plaintiff against shipments of material. Title to the materials shipped by plaintiff passed to thĄ Sorocabana Railway in Brazil. Plaintiff supervised the installation of the equipment in Brazil.

17. Under date of July 11, 1947, plaintiff and the Bank entered into a letter agreement under which the Bank agreed to purchase from plaintiff without recourse the 14 series “A” notes of the Sorocabana Railway at their principal amount without discount. In this agreement plaintiff and the Bank agreed in part as follows:

Interest. The Bank shall receive interest at least semiannually at the rate of not less than four and onehalf per cent (412%) per annum on the outstanding principal balance of the obligations discounted or purchased hereunder. Such interest shall be computed to and payable at the time of the maturity of each installment of principal. In the event that the amount collected on the maturity of any obligation purchased hereunder is insufficient to pay the installment of principal and such computed interest on the total outstanding principal balance of the obligations purchased by the Bank, the Supplier will, on notice from the Bank, pay to the Bank the amount of such deficiency of interest. In the event the amount collected on the maturity of any obligation exceeds the amount necessary to pay the installment of principal and such computed interest, the Bank will remit the amount of such excess interest to

the Supplier. Pursuant to this agreement of July 11, 1947, from November 14, 1947 to December 28, 1950, within the time as extended by the Bank, the Bank acquired without recourse as to principal the 14 “A” notes from plaintiff for a net amount of $474,930.09 for each note consisting of $474,930.09, the amount of each note representing principal without discount. None

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