Pittsburgh, C., C. & St. L. Ry. Co. v. L.I. Loan & Trust Co. - 172 U.S. 493 (1899)
U.S. Supreme Court
Pittsburgh, C., C. & St. L. Ry. Co. v. L.I. Loan & Trust Co., 172 U.S. 493 (1899)
Pittsburgh, Cincinnati, Chicago and St. Louis Railway
Company v. Long Island Loan and Trust Company
Argued April 11-12, 1898
Decided January 9, 1899
172 U.S. 493
In view of the statute giving this Court authority to reexamine the final judgment of the highest court of a state, denying a right specially set up or claimed under an authority exercised under the United States, this Court has jurisdiction to inquire whether due effect was accorded to the
foreclosure proceedings in the circuit courts of the United States under which the plaintiff in error claims title to the lands and property in question in this suit.
Under the circumstances stated in the finding of facts, Lynde acquired a good title (as between himself and the mortgagor company and the companies which succeeded it by consolidation) to the thirty-six bonds purchased by him, as well as the right to claim the benefit of the mortgage executed to Parkhurst.
The state court having adjudged that there was no rule of law arising out of the public policy of the state, as manifested by state legislation, that required it to deny to the holders of those bonds the rights and privileges pertaining to commercial paper, purchased in good faith in the ordinary course of business, and in view of the fact that the lien attending the thirty-six bonds purchased by Lynde did not arise after the institution of the foreclosure suits, but had its origin in the execution and delivery of the Parkhurst mortgage and the authentication by the trustee of the bonds named in it, and in view of the further fact that the trustee in the prior mortgage was not made a party to the foreclosure suits, and was not bound by the decree, under the well settled rule that a sale of real estate under judicial proceedings concludes no one who is not, in some form, a party to such proceedings, this Court holds that the pendency of the foreclosure suits did not interfere with the negotiation or transfer of the bonds secured by the prior Parkhurst mortgage; that the decree in those suits did not impair in any degree the lien created by that mortgage; that the purchase of the bonds by Lynde could not be regarded as hostile to the possession taken of the property embraced by the Roosevelt mortgage for the purpose of selling it in satisfaction of the debts secured thereby, and that the state court did not fail to give due effect to the several decrees in the Circuit Courts in the Roosevelt foreclosure suits when it held that those decrees did not prevent the defendant in error from claiming the benefit of the lien created by the mortgage to Parkhurst to secure the payment of the bonds purchased by Lynde.
The case is stated in the opinion.