Simmons v. Burlington, C.R. and N. Ry. Co. - 159 U.S. 278 (1895)
U.S. Supreme Court
Simmons v. Burlington, C.R. and N. Ry. Co., 159 U.S. 278 (1895)
Simmons v. Burlington, Cedar Rapids, and Northern Railway Company
Nos. 11 and 12
Argued November 1, 1894
Decided October 21, 1895
159 U.S. 278
APPEAL FROM THE CIRCUIT COURT OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF IOWA
When a junior mortgagee is a party defendant to a foreclosure bill in which there is a prayer that he be decreed to redeem, and when the priority of the plaintiffs mortgage is found or conceded, and a sale is ordered in default of payment, declaring the right of the debtor to redeem to be forever barred, a similar order as to right of redemption by the junior mortgagee is not substantially, or even formally, necessary.
In such case, a junior mortgagee, who stands by while the sale is made and confirmed, must be deemed, in equity, to have waived his right to redeem. A decree in such a suit that the sale is to be made subject to the rights of the junior mortgagee and of intervening creditors, and reserving to the court the right to make further orders and directions, and providing that no sale shall be binding until reported to the court for its approval, and a subsequent order that the property shall be sold subject to the future adjudication as to such rights, and the property conveyed subject thereto, while it warrants a contention that the court intended to make a future disposition of the claims of such parties, does not authorize the junior mortgagee to wait for a period of seven years before attempting to enforce his alleged rights, and such delay deprives him of the right to ask the aid of a court of equity in enforcing them.
The Burlington, Cedar Rapids, and Minnesota Railway Company was a corporation organized under the laws of the State of Iowa, and in pursuance of its granted powers had, prior to the litigation which brings the case before us, constructed
a main line and three branches, known as "the Milwaukee Extension," "the Pacific Extension," and "the Muscatine Western." It had at different times executed mortgages -- one upon the main line, covering the railway, rolling stock, and franchises held or thereafter to be acquired, securing bonds to the amount of $5,400,000; one, subsequent in date, upon the Milwaukee extension, securing bonds to the amount of $2,200,000; one, later in date, upon the Muscatine Western extension, securing bonds to the amount of $800,000, and one, still later in date, upon the Pacific extension, securing bonds in the sum of $1,800,000; and, finally, one known as the "income and equipment mortgage," which was a second mortgage upon the railway and branches, and purporting to be a first mortgage upon the income and upon certain rolling stock not covered by the first mortgages.