65 F. 336 | U.S. Circuit Court for the Northern District of Georgia | 1894
The intervention of John S. Hissong in the above-stated case was filed on May 14, 1894, in the clerk’s office of this court, and on the same day the intervention was allowed, and referred to W. D. Ellis, Esq., special master, to determine all questions of law and fact therein, and report to the court. This intervention is filed both in the case of the Central Trust Company of New York against the Richmond & Danville Railroad Company, and in the case of Clyde et al. v. The Richmond & Danville Railroad Company. In the first-named case, the bill is brought by William P. Clyde and others on behalf of themselves and other creditors and stockholders, and on this bill, in June, 1892, F. W. Huidekoper and Reuben Foster were appointed receivers. On the 29th day of July, under a bill filed by the Central Trust Company of New York against the Richmond & Danville Railroad Company, Samuel Spencer, F. W. Huidekoper, and Reuben Foster were appointed receivers. This bill of the Central Trust Company was brought for the purpose of foreclosing a mortgage against the defendant corporation. The order appointing Spencer, Huidekoper, and Foster receivers under the Central Trust Company bill provided that Huidekoper and Foster, receivers under the Clyde bill, should, on the 1st day of August, 1893, turn over to the three receivers appointed under the Central Trust Company bill all the property of the Richmond & Danville Railroad Company in their possession and under their control. On the 20 th day of July, 1898, Spencer, Huidekoper, and Foster were, under a bill filed by the Central Trust Company of New York against the Georgia Pacific Railway Company, appointed receivers of all the property and assets of that company, so that after that date the property of the Georgia Pacific Railway Company, which had been, prior to the receivership, operated by the Richmond & Danville Railroad Company, was controlled by the same receivers under a separate bill against the Georgia Pacific Railway Company which was filed originally in the circuit court for this district. The intervening petition shows that John S. Hissong, who is a citizen of the state of Alabama, obtained a judgment in the circuit court of Jefferson county, Ala., on the 20th day of April, 1891, against the Richmond & Danville Railroad Company for the sum of $1,000, for which he prays judgment as an intervening petitioner in the case named against the Richmond & Danville Railroad Company. The petition was referred formally, and in connection with a number of other petitions, to the special master, as stated, without considera
The question raised is somewhat novel and peculiar. The original bill in this case of Clyde and others against the Richmond & Danville Railroad Company was filed in the circuit court for the Eastern district of Virginia, and ancillary bills, or what were called “original bills,” — but were bills in aid of the first suit in Virginia, — were filed in the circuit courts of the various states through which the line of the Richmond & Danville Railroad Company ran, which were Rorth Carolina, South Carolina, Georgia, Alabama, and Mississippi. The primary litigation as to the Richmond & Danville Railroad Company, however, is all in Virginia. The bill filed in this district, while it was called, as stated, an “original bill,” was really subordinate to the Virginia proceeding. It was filed here for the purpose of obtaining the aid of this court in preserving the assets of the defendant corporation so far as the same were in the jurisdiction of this court; and while this court has not questioned its right to pass upon and determine the rights of creditors here, claiming an interest in or asserting a lien against the property of the corporation in this district, it has not gone further than that. The petitioner, Hissong, obtained a judgment in the state courts of .Alabama prior to the time that the property was placed, by order of the circuit court of Virginia and the other circuit courts, in the hands of receivers. The lien of his judgment was confined to property in the state of Alabama. A bill of the-same character as the one filed in this district, as has been stated, was filed in Alabama, and no reason appears why petitioner could not as ’well present his claim of the right to share in the assets of the Richmond & Danville Railroad Company to the circuit court in Alabama as to the circuit court here. Some reason might exist for his taking his claim to the circuit court of Virginia to assert his right to participate in the property where the principal assets of the defendant are being administered, but it is difficult to see by
But there is another objection to this proceeding and the prayer of this petition, which seems to be fatal. The petitioner asks for a judgment against the Richmond & Danville Railroad Company. To he effectual for any purpose, it must amount to a general Georgia judgment against the defendant corporation, and such, I understand, it is claimed to be, if the report of the special master is confirmed. The assets of the Richmond & Danville Railroad Company within this jurisdiction have been in the hands of this court, under the character of proceedings named, for some time; that is, in the hands of receivers of the court, for the benefit of those interested therein. At the time of the sequestration of this property by the courts of the various states before mentioned the petitioner had a good Alabama judgment, with such lien and rank as it might give him against the property of the Richmond & Danville Railroad Company. Now' he comes into this court, and asks by bis petition, not that his rights by virtue of his judgment lien may be ascertained and determined as against the property of the defendant in the hands of the courts, but he asks for a judgment against the defendant, — a new judgment, which, as stated, is claimed to be, and will be, if anything, a general judgment. The defendant is a Virginia corporation, the petitioner a citizen of Alabama. Neither the defendant nor the petitioner resides in this state, so that no suit could be brought originally in this court between the parties, even if the necessary jurisdictional amount was involved; and it is not. So that the court in an original proceeding would have jurisdiction neither of the parties nor of the subject-matter. Expressing it differently, the petitioner comes into court by intervention, in a proceeding to administer such assets in accordance witli the rights of these interested therein, and under cover of this intervening petition obtains a general judgment in a court which could have no jurisdiction of the case otherwise. The rule well established in practice,
Necessarily, the purpose and scope of the intervening petitions in receivership cases are the ascertainment and adjudication of rights connected with the property in the hands of the court. Such interventions may come in various shapes, but they look to the one result. Numerous petitions by way of intervention have been allowed in this cause where the claims were against the defendant corporation. These petitions have all gone, as a rule, to the special master appointed in this case. Suits for damages have been, by consent usually, so referred, and the special master directed to hear evidence, and report the amount which the petitioner was entitled to recover, if anything. All these interventions, however, had the one ultimate object of participating in the distribution of the property of the defendant corporation, if a sufficient amount should be realized to justify such participation; and for that purpose, if the claim is unliquidated, it would be necessary, of course, to ascertain its amount. The character of this petition, however, is different from any presented, so far as the attention of the court has been specially called to them. The petitioner elected his forum for suit originally in the state court of Alabama, and obtained his judgment. As to his right to participate in the assets of the defendant in the hands of the court by coming into this equity cause, he must be content to abide by the lien of that judgment, and such rights as he may have by virtue thereof. This, of course, interferes in no way with his right to bring suit against the defendant in a court of competent jurisdiction on his judgment, and to have such rights as that judgment will give him determined; but he is not entitled to do this by intervention in the equity cause in this jurisdiction. Of course, a case might exist where property on which a creditor had a judgment lien had been removed from the jurisdiction in which his lien had attached into another jurisdiction, and it would be necessary for him to follow it up for the purpose of having his rights enforced; but no such case as that is made, or even intimated, here. The proceeding is manifestly wrong, and the report of the special master allowing the intervener judgment against the Richmond & Danville Railroad Company is clearly erroneous. This conclusion is reached upon both grounds which have been discussed. In the first place, the petitioner has sought the wrong jurisdiction. He should have either remained in Alabama, and presented his claim to the circuit court of that state, or, if he left that district, he should have gone to the court of primary jurisdiction in this case, namely, the circuit