Railroad Company v. Swasey
90 U.S. 405 (1874)

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U.S. Supreme Court

Railroad Company v. Swasey, 90 U.S. 23 Wall. 405 405 (1874)

Railroad Company v. Swasey

90 U.S. (23 Wall.) 405

Syllabus

1. A decree of foreclosure and sale is not "final" in the sense which allows an appeal from it so long as the amount due upon the debt must be determined and the property to be sold ascertained and defined.

2. Hence a decree is not "final" in such sense where the court, by an interlocutory order, declares than certain shares in a railroad held by a state are pledged for the payment of certain interest bearing bonds of the state and the interest on them, and that the plaintiff and others whom he represents, as holders of such bonds, are entitled to have their respective proportions of the stock, or so much thereof as may be necessary, sold in order to pay the interest which is due to them, and orders a master to take an account of such unpaid interest and of what will be due by a day named, and also of the proportion of stock that may be equitably applicable to the payment of said interest found due to each plaintiff and make report to the court. And orders further that unless by a day named it be made to appear to the court that the state has levied and provided for the collection of a tax sufficient to pay, or have otherwise secured the payment of, its arrears of interest, then so much of the stock of the state in the road, apportioned to the plaintiff and those he represents as may be necessary to pay off and discharge said arrears of interest, shall be sold to the highest bidder for cash. And after giving directions as to the manner in which a sale is to be made, at the end of all adds "And this cause is held for further directions."

3. This is but an interlocutory order announcing the opinion which the Court has formed as to the rights of the parties and the principles of the decree it would finally render, leaving the entry of the final decree in form to be made when the amount due has been ascertained and an apportionment of the stock made.

Page 90 U. S. 406

4. This Court calls the attention of the circuit courts to what was said by Taney, C.J., in Forgay v. Conrad, 6 How. 201, as to the care which ought to be exercised in the preparation of decrees of foreclosure, and observes that much time of this Court and expense of litigants will be saved if more attention is given to the form of decrees when entered.

On motion to dismiss for want of jurisdiction as not "final" an appeal from the Circuit Court for the Eastern District of North Carolina.

The case was thus:

The State of North Carolina by acts of her legislature passed in January, 1849, and 1855, subscribed for stock in the North Carolina Railroad Company, of the par value of $3,000,000. To pay for this stock, she borrowed money and issued her bonds and certificates of debt with coupons for interest, redeemable in thirty years, with interest payable semiannually. In the laws authorizing these subscriptions and loans, she pledged and appropriated for the payment of the bonds or certificates the faith of the state, the stock and all dividends which might be declared thereon.

Of a large amount of these bonds one Swasey became the holder.

From the year 1869, the state received the dividends upon the stock, and appropriated the money to purposes other than the payment of the interest. A large amount of interest coupons being unpaid, a bill in equity was now filed by Swasey for himself and on behalf of several other bondholders, praying the Circuit Court of the United States for the Fourth District,

1st. to restrain the treasurer of the railroad company from paying any future dividends to the state treasurer.

2d. to restrain the state treasurer from receiving any future dividends.

3d. for the appointment of a receiver &c.

After argument before the circuit judge, June 19, 1871, he awarded the injunction and appointed Mr. J. B. Batcheler a receiver.

Several dividends were accordingly paid to the receiver, and by him distributed, under various orders of the court

Page 90 U. S. 407

It becoming evident that the arrears of interest could not be paid without a sale of the stock, a motion for a sale was made by the plaintiffs, and on that motion the court entered a decree as follows:

"This cause coming on for further order, the court doth declare:"

"1st. That by the terms of the charter of the North Carolina Railroad Company, and the amendments thereto, the shares of the stock in said company, belonging to the State of North Carolina, meaning thereby the shares and all dividends thereon, are pledged as security for the payment of the certificates of debt in such charter and amendments provided for, and for every part of such certificates, meaning thereby the interest accruing upon the principal thereof, as well as the principal."

"2d. That the plaintiff and those he represents, as owners of such certificates of debt or bonds or of coupons detached therefrom, now hold large amounts of the past due coupons of said certificates of debt or bonds, and that they are entitled to have their respective proportions of the stock, or so much thereof as may be necessary, sold in order to pay such past due interest."

"Upon motion of counsel for the plaintiffs, it is therefore ORDERED and DECREED, that J. B. Batcheler, the commissioner heretofore appointed in this suit, take an account of such unpaid interest, and of such further interest as will be due on or before the 1st day of April, 1875, and also of such proportion of the said stock of the State of North Carolina, in said North Carolina Railroad Company, as may be equitably applicable to the payment of said interest found due to each of the said plaintiffs respectively, and that he make report to the next term of this Court."

"It is further ordered and decreed that unless on or before the 1st day of April, 1875, it shall be made to appear to this court that the said State of North Carolina has levied a tax sufficient to pay the said arrears of interest, and has provided for its collection, or shall otherwise have paid or secured the payment of the said past due interest, then so much of the said stock of the state in the said North Carolina Railroad Company, apportioned to the plaintiff, and those he represents as may be necessary to pay off and discharge said arrears of interest shall be sold to the highest bidder for cash. "

Page 90 U. S. 408

Directions are then given as to the manner in which the sale is to be made, and at the end of all are these words:

"And this cause is held for further directions."

From this decree the North Carolina Railroad Company took an appeal, and this appeal it was which it was now moved to dismiss as not being "final," and therefore not within the expressions of the Act of March 2d, 1803, which gives an appeal to this Court only from "final judgments or decrees."

Page 90 U. S. 409

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