Simmons v. Burlington, C.R. and N. Ry. Co.
159 U.S. 278 (1895)

Annotate this Case

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



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

Page 159 U. S. 279

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.

On the 15th day of May, 1875, Charles L. Frost, as surviving trustee in the "mainline" mortgage, filed in the Circuit Court of the United States for the District of Iowa an original bill against the Burlington, Cedar Rapids, and Minnesota Railway Company, as sole defendant, to foreclose the mortgage on the main line. By amendment, the Farmers' Loan and Trust Company was made a party defendant upon an averment that said company were trustees in a mortgage executed subsequent to the plaintiffs' mortgage, and praying that

"their lien on the income and equipment of said road may be declared subsequent to that of the plaintiffs, and they may be decreed to redeem plaintiffs' mortgage, or their equity be barred and foreclosed, and for such other relief as the plaintiffs' case may require."

A demurrer to this bill had been filed by the railway company, and, after the Farmers' Loan and Trust Company was added as a party defendant, it joined in the demurrer.

The several trustees in the Milwaukee extension mortgage and the Muscatine extension mortgage likewise filed in the same court foreclosure bills, in which, by amendment, the Farmers' Loan and Trust Company was made a party defendant, and as to which the same relief was prayed as that contained in the bill filed by Frost, trustee.

Page 159 U. S. 280

On June 23, 1875, the Farmers' Loan and Trust Company, as trustee in the mortgage on the Pacific division, and as trustee in the income and equipment mortgage, filed an original bill against the railway company, praying a foreclosure of both of said mortgages. In that portion of the bill that dealt with the income and equipment mortgage it was alleged that said mortgage was a first lien on two engines, known as Nos. 30 and 31, and upon one hundred and thirty boxcars, known as the even numbers from 882 to 1140. An answer was filed by the railway company not traversing or denying the allegations of the bill as respected the mortgage on the Pacific division, but denying that as many equipment or income bonds had been sold as were averred to have been sold. On the 30th of October, 1875, the case came on for hearing, and a final decree was entered ordering that the property covered by the Pacific division mortgage be sold without appraisement or redemption at public auction, etc., but ordering that

"that portion of complainants' bill relating to the 'income and equipment mortgage,

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