Ex Parte Railroad Company - 95 U.S. 221 (1877)


U.S. Supreme Court

Ex Parte Railroad Company, 95 U.S. 221 (1877)

Ex Parte Railroad Company

95 U.S. 221

Syllabus

1. Where the final decree of the circuit court is inconsistent with an interlocutory decree granting affirmative relief upon a cross-bill in the same suit, a party adversely affected by such final decree, where the matter in dispute is sufficient, has a right to appeal to this Court, which, if withheld, may be enforced by mandamus.

2. An assignment by a defendant of his interest in the subject matter of a pending suit does not necessarily defeat the suit. The assignee is bound by what is done against the assignor; and may either come in and assume the burden of the litigation in his own name, or act in the name of his assignor.

The facts important to the determination of this case are as follows:

The Montgomery and Eufaula Railroad Company, in 1860, borrowed $30,000 from the State of Alabama, and executed a mortgage upon its property and franchises to secure the payment. Afterwards, the state endorsed bonds of the company to the amount of $1,280,000, and a statutory lien was created upon the same property and franchises as further security for the bonds. In 1870, the company issued a series of bonds to the amount of $500,000, and secured the payment of them by a deed of trust upon the same property.

Default having been made in the payment of the interest upon the last-named bonds, Samuel A. Strang, claiming to be the holder of some of them, filed May 10, 1872, a bill for the foreclosure of the mortgage, in the District Court of the United states for the Middle District of Alabama, then possessing circuit court powers. To this bill, the trustees named in the mortgage, the railroad company, and one of its judgment creditors, were alone made parties. No mention was made of the

Page 95 U. S. 222

first mortgage to the state. On the 17th January, 1874, the South and North Alabama Railroad Company was, upon its own petition, admitted as a defendant in the suit, with leave to answer and file a cross-bill. In its answer it set forth its ownership of the $30,000 mortgage to the state and insisted upon the priority of its security, and, in the cross-bill, prayed a sale of the mortgaged property for the purpose of paying the debt.

On the 1st of April, 1875, Mason Young and others, claiming to be the owners of certain of the bonds secured by the statutory lien, filed a bill in the Circuit Court of the United states for the Middle District of Alabama to enforce that lien. To this bill the Montgomery and Eufaula Railroad Company, the South and North Alabama Railroad Company, and the trustees under the Strang mortgage, were made parties. The South and North Alabama Railroad Company answered, setting up its lien and asking that it might be enforced as superior to that of any other claimants. In the answer, it was stated that on the 20th April, 1876, the company had transferred its claim to the Louisville and Nashville Railroad Company. In June, 1876, the Strang suit was, by operation of law, transferred to the Circuit Court of the United states for the Middle District of Alabama.

After this transfer, the Strang and Young suits, with the cross-bill, were submitted to the court upon the pleadings, proof, and admissions of the solicitors for the determination of the question, whether the mortgage claim of the South and North Alabama Railroad Company was paramount and superior to the other claims and liens asserted and disclosed in the pleadings of the other parties to the several causes, and, upon this submission, the court decided in favor of that company, finding the amount due to be $61,212, and entered an interlocutory decree to that effect, reserving all further questions. At a subsequent term, on the 6th of June, 1877, each of the several causes came on to be heard upon the prayer of the cross-bill of the South and North Alabama Company for an order to sell the mortgaged property, and pay its debt out of the proceeds, and upon the motion of the several complainants in the original bills for a reference to ascertain the amount due for costs, solicitors' fees, and outstanding unpaid receiver's certificates. Upon

Page 95 U. S. 223

this hearing, a decree was entered in each of the suits directing the sale, as asked for, and the application of the proceeds to the payment of the claim of the Alabama Company in preference to that of the other mortgage creditors. From these decrees Young and his co-complainants appealed and filed the necessary bond for a supersedeas; but at the same term, and the next day after the appeal was taken, the court again considered the cause, upon the motion of those holding claims adverse to that company for a decree settling their equities as between themselves, and directing a sale of the property subject to the claim or lien of that company, "to the end that this litigation, except in so far as it concerns the South and North Alabama Railroad Company, may be terminated," and it appearing to the court that the parties to such motion were entitled to a decree as to their several equities as between each other, the two suits of Strang and Young were consolidated and a decree was rendered July 3, 1877, settling the equities of the parties, exclusive of the Alabama Company, ordering a sale of the property, subject to the lien of that company, and directing that the purchaser take title subject to such lien as the same might finally be adjudicated and determined. It was also adjudged that all the rights and equities of that company should remain the same in all respects as if that decree had not been rendered, such company

"not being a party to the submission, and, in the opinion of the court, as a matter of law, not a party to the decree, although appearing and claiming to be a party, and insisting upon the right as a party to object thereto."

On the same day with the rendition of this decree, the South and North Alabama Company prayed an appeal to this Court to operate as a supersedeas upon the filing of the necessary bond, but the court refused to grant the appeal or accept a bond, being of the opinion that the company had no right to appeal, or to supersede the execution of the decree.

The South and North Alabama Railroad Company now petitions for a mandamus requiring the circuit court to grant the appeal and accept a good and sufficient supersedeas bond.

Page 95 U. S. 224



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