American Constr. Co. v. Jacksonville &c. Co.
148 U.S. 372 (1893)

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U.S. Supreme Court

American Constr. Co. v. Jacksonville &c. Co., 148 U.S. 372 (1893)

American Construction Company v. Jacksonville,

Tampa & Key West Railway Company

Nos. 14, 15, original

Argued March 6-7, 1893

Decided March 27, 1893

148 U.S. 372

Syllabus

A writ of mandamus does not lie to the United States circuit court of appeals to review, or to the circuit court of the United States to disregard, a decree of the circuit court of appeals, made on appeal from an interlocutory order of the circuit court, and alleged to be in excess of its powers on such an appeal, but which might be made on appeal from the final decree, when rendered.

Under the Act of March 3, 1891, c. 517, § 6, this Court has power, in a case made final in the circuit court of appeals, although no question of law has been certified by that court to this, to issue a writ of certiorari to review a decree of that court on appeal from an interlocutory order of the circuit court, but will not exercise this power unless it is necessary to prevent extraordinary inconvenience and embarrassment in the conduct of the cause.

This court will not issue a writ of certiorari to review a decree of the circuit court of appeals by which, on appeal from an interlocutory order of the circuit court granting an injunction, appointing a receiver of a railway company, and authorizing him to issue receiver's notes, the injunction has not only been modified, but the order has been reversed in other respects.

A decree of the circuit court of appeals by which, on appeal from an interlocutory order of the circuit court vacating an order appointing a receiver, the order appealed from has been reversed, the receivership restored and the case remanded to the circuit court to determine who should be receiver, will not be reviewed by this Court by writ of certiorari, either because no appeal lies from such an interlocutory order or because the order appointing the receiver was made by a circuit judge when outside of his circuit.

A circuit judge having taken part in a decree of the circuit court of appeals on an appeal from an interlocutory order setting aside a previous order of his in the case, this Court granted a rule to show cause why a writ of certiorari should not issue to the circuit court of appeals to bring up and quash its decree because he was prohibited by the Act of March 3, 1891, c. 517, § 3, from sitting at the hearing.

Page 148 U. S. 373

These were two petitions to this Court, each praying in the alternative for a writ of mandamus or a writ of certiorari to the United States Circuit Court of Appeals for the Fifth Circuit.

In the first case (No. 14), it appeared that the following proceedings were had in the Circuit Court of the United States for the Northern District of Florida.

On July 6, 1892, the American Construction Company, a corporation of Illinois and a stockholder in the Jacksonville, Tampa and Key West Railway Company, a corporation of Florida, engaged in operating a railroad in that state, filed a bill in equity in behalf of itself and of such other stockholders as might come in against the railway company and against its president and directors, citizens of other states, alleging that they had made a contract in its behalf which was illegal and void, and unjust to its stockholders, and had declined to have an account taken, and praying for an account, a receiver, and an injunction.

On the filing of the bill, Judge Swayne, the district judge, made a restraining order by which, until the plaintiff's motion for an injunction and for the appointment of a receiver could be heard and determined, the railway company and its officers and agents were enjoined and restrained from remitting, sending, or removing any of its income, tolls, and revenues from the jurisdiction of the court and from selling, disposing of, hypothecating, or pledging any of its bonds of a certain issue at less than their par value.

On August 4, 1892, Judge Swayne, after a hearing of the parties, made an order appointing Mason Young receiver of all the property of the railway company, enjoining the railway company, its officers and agents, and all persons in possession of its property, from interfering with the possession, control, management, and operation of the property, and from obstructing the exercise of the receiver's rights and powers, or the performance of his duties, and continuing the restraining order of July 6 until the further order of the court.

On August 5, Judge Swayne, on a petition of the receiver, and after hearing him and the parties, made an order authorizing

Page 148 U. S. 374

him to pay certain interest and obligations of the railway company out of the income and money coming into his hands as receiver, or, if those should be insufficient for that purpose, to issue receiver's notes in payment of such interest and obligations, or at his discretion to borrow money on such receiver's notes for that purpose, the amount of such notes outstanding at one time not to exceed $125,000.

On August 27, the railway company prayed and was allowed an appeal from the orders of August 4 and August 5 to the United States Circuit Court of Appeals for the Fifth Circuit, and gave bond to prosecute the appeal.

On November 18, the construction company moved the circuit court of appeals to dismiss the appeal because that court had no jurisdiction to review the action of the circuit court in making those orders or either of them.

On January 16, 1893, the circuit court of appeals, held by Circuit Judges Pardee and McCormick and District Judge Locke, denied the motion to dismiss the appeal and entered a decree reversing and setting aside the orders appealed from except as to the injunction, modifying the injunction so as to permit the railway company to send away money for the payment of its bonds which had been regularly sold, and for the purchase of necessary equipment and supplies, and to restrain it from disposing of at less than their par value, such only of the bonds of the issue mentioned as remained the property of the company, and instructing the circuit court to modify accordingly the restraining order of July 6th, continued by the order of August 4th, and to vacate the order of August 4, appointing a receiver, to discharge the receiver, and to restore the property of the company to its officers.

On January 23, the construction company filed a petition for a rehearing upon the grounds, among others, that the circuit court of appeals had no jurisdiction to review an order appointing a receiver and that its decree did not allow the receiver time to settle his accounts nor provide for the payment of his notes in the hands of bona fide holders for value.

On January 30, the circuit court of appeals denied a rehearing and sent down a mandate in accordance with its

Page 148 U. S. 375

decree, and on February 1, the mandate was filed in the circuit court.

On February 2, the construction company moved this Court for leave to file a petition for a writ of mandamus to the circuit court of appeals to dismiss so much of the appeal of the railway company as undertook to bring before that court the action of the circuit court in appointing a receiver and in authorizing him to borrow money upon receiver's notes, or, in the alternative, for a writ of certiorari to the circuit court of appeals to bring up its decree for review by this Court.

In the second case, No. 15, besides the facts above stated, the following facts appeared:

On July 23, 1892, the Pennsylvania Company for Insurance of Lives and for Granting Annuities, a corporation of Pennsylvania, as trustee under a mortgage of the property of the railway company to secure the payment of its bonds of the issue aforesaid, presented to Judge Pardee a bill in equity, addressed to the same circuit court, against the railway company, praying for a foreclosure of the mortgage, for the appointment of a receiver, and for an injunction.

On the same day, upon this bill, and with the consent of the railway company, Judge Pardee signed an order appointing Robert B. Cable receiver of all its property, and declaring that the appointment was provisional, to the extent that any one having an interest in the property of the railway company might show cause within thirty days why the appointment should not be confirmed, and that the appointment should not

"affect or forestall any action the court or any of its judges may hereafter see proper to take on any bill heretofore filed in this Court against said railroad company, wherein a receivership has also been prayed for."

This bill and order were directed by Judge Pardee to be filed of July 23, 1892, and were filed by the clerk as of that day.

On July 29, the construction company filed in the circuit court a petition of intervention, setting forth the previous proceedings in the first case and praying that the order appointing Cable receiver might be set aside and vacated.

Page 148 U. S. 376

On August 4, on this petition, Judge Swayne, holding the circuit court, made an order setting aside and vacating the order appointing Cable receiver and staying all further proceedings in the cause until the further order of the court.

On August 23, the Pennsylvania Company prayed and was allowed an appeal from that order of Judge Swayne to the United States Circuit Court of Appeals for the Fifth Circuit, and gave bond to prosecute its appeal.

On November 18, the construction company moved to dismiss this appeal because the circuit court of appeal had no jurisdiction of an appeal from that order and because it appeared by the pleadings and papers on file that the suit was a collusive one between the appellant and the railway company.

On January 16, 1893, the circuit court of appeals, held by Circuit Judges Pardee and McCormick and District Judge Locke, denied the motion to dismiss the appeal and entered a decree by which that order was reversed, "the stay of proceedings dissolved, the receivership restored," and the cause remanded to the circuit court with instructions to proceed therein in accordance with the opinion rendered by the circuit court of appeals, by which it was

"left with the circuit court to determine what person is the proper one to execute the office of receiver in this case, and to continue Receiver Cable, or to appoint a more suitable person in his place, as the relations of the parties and the character and condition of the property may, in the judgment of that court, require."

On January 23, the construction company filed a petition for a rehearing, upon the following grounds:

1st. That the order appealed from was purely in the discretion of the circuit court, and not subject to appeal.

2d. That the order of July 23, 1892, appointing Cable receiver was a nullity because made by Judge Pardee in the State of Ohio, outside of his circuit, and while the circuit court was in session in the district where the suit was pending.

3d. That, this order being a nullity, there was no receivership to be restored, and that the circuit court of appeals had no power or jurisdiction to vacate the order of the circuit court appointing, or refusing to appoint, a receiver.

Page 148 U. S. 377

4th. That if the order of July 23, 1892, was valid, the circuit judge who made it could not sit in the circuit court of appeals at the hearing of the cause, and was expressly prohibited from so doing by the following provision in the act creating that court:

"Provided that no justice or judge before whom a cause or question may have been tried or heard in the district court or existing circuit court shall sit on the trial or hearing of such cause or question in the circuit court of appeals."

Act of March 3, 1891, c. 517, § 3, 26 Stat. 827.

5th. That it should be left open to the circuit court to inquire whether the suit was collusive, and thereupon either to appoint a receiver or to dismiss the bill.

On January 30, the circuit court of appeals denied a rehearing, and sent down a mandate in accordance with its decree, and on February 1, this mandate was filed in the circuit court.

On February 2, the construction company moved this Court for leave to file a petition for a writ of mandamus to the circuit court of appeals to dismiss so much of the appeal of the Pennsylvania Company as undertook to bring before that court the action of the circuit court in vacating and setting aside the order for the appointment of a receiver, or, in the alternative, for a writ of certiorari to the circuit court of appeals to bring up its decree for review by this Court.

This Court gave leave to file both petitions of the American Construction Company, stayed proceedings under the mandates of the circuit court of appeals, and ordered notice to the railway company and to the Pennsylvania Company of a renewal of the motions for writs of mandamus or writs of certiorari, returnable March 6.

The petitioner gave notice to those companies that on that day it would move accordingly for writs of mandamus or certiorari to the circuit court of appeals, as prayed for in the petitions, and would also, in the alternative, move for a writ of mandamus to the circuit court to disregard the mandates of the circuit court of appeals, except so far as they affirmed, modified, or reversed the injunction orders of the circuit court,

Page 148 U. S. 378

and especially to disregard the parts of those mandates which undertook to modify or reverse any order appointing, or refusing to appoint, a receiver.

At the time so appointed the parties appeared, and the motions were argued.

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