264 F. 798 | 8th Cir. | 1920
In a suit in equity pending in the court below, to which the Southern Trust Company, the trustee in the mortgage of January 1, 1907, securing bonds overdue to the amount of some $300,000 on certain railway iiroperty, J. E. Felker, W. R. Felker, and the Felker Construction Company, a co-partnership composed of J. E. Felker and W. R. Felker together, hereafter called the Felkers, claimants of some $210,000, and others, were parties, and in which suit by their pleadings and evidence the Southern Company, on the one hand, and the Felkers, on the other, had claimed the superior lien upon the mortgaged property, the court below rendered a decree of foreclosure of the mortgage and of a sale of the property dated March 8, 1918. The mortgaged property was sold under this decree to F. X. Queen, John J. Tyler, and James H. Morris, as the bondholders’ protective committee, for $275,000, and that sale was confirmed by the order of the court on October 4, 1918. In December, 1918, and January, 1919, the Felkers filed petitions and a statement of their election to stand on their statutory liens upon certain of their claims, and thereby again presented the same claims for a superior lien upon the mortgaged property which they had made at the hearing before the decree, and insisted that the court ought to allow these claims, to adjudge them to be secured by a lien superior to the lien of the
On the first page of his brief counsel for the Felkers, referring to the decree of March 8, 1918, writes:
“If this decree is a final adjudication of the rights of the plaintiffs in error [appellants], and the purchasers are not liable under it, it is then unnecessary to go further into the other questions involved in this controversy.”
Counsel here states the real issue to be determined in this court, and others, including that of the right of the Felkers to a determination of the amount of the indebtedness of the Kansas City & Memphis Railway Company, the owner of the mortgaged property subject to the mortgage, to them, will be disregarded, because they do not condition the decision of the only issue between the Felkers, on the one hand, and the Southern Company and the purchasers, on the other, that it is necessary to consider in this case. For the purposes of the discussion and the decision of that issue it will be assumed that the Kansas City Company is indebted to the Felkers upon their claims in the full amount that they claim, some $210,000. The Felkers admit that the purchasers are not liable for their claims, unless those claims are secured by a lien on the mortgaged property that is superior in equity to the lien of tire mortgage of 1907. They claim, ■and the Southern Company and the purchasers deny, that they are so secured, and the latter insist that the Felkers are estopped from asserting or maintaining the superiority of their alleged liens by the fact that, after full hearing upon pleadings and evidence, the lien of the mortgage of 1907 was adjudged superior to the alleged liens of the Felkers by the foreclosure decree of, March 8, 1918. That decree was: rendered on the amended complaint of the Southern Company for a foreclosure and sale of the railroad property to pay the debt secured by the mortgage of 1907, the answer and cross-complaint of the Felkers, and the evidence of each of these parties, and it adjudged the foreclosure and sale prayed by the Southern
The next question is: Did the decree of March 8, 1918, and the order of the confirmation of the sale thereunder, finally adjudge as between the Southern Company and the purchasers at the sale, on the one hand, and the Felkers, on the other, that the lien of the mortgage was superior in equity to the latters’ alleged liens, and that the purchasers should take and hold the mortgaged property free from their
Another paragraph provides that “all claims not hereby disposed of and determined are hereby reserved for further adjudication.” But the claims of the Felkers to a lien upon the mortgaged property superior to that of the Southern Company were disposed of by the adjudication of their classes and order of payment. In view of these considerations, the contention that the claims of the Felkers that were adjudged to be in the sixth class by the decree were also included or intended to be included in the provision that the purchasers should pay all claims filed in the case upon their subsequent adjudication superior to the mortgage cannot be sustained. The true construction of that provision is that it does not include claims for liens which by the other provisions of the decree were adjudged and disposed of, after a final hearing of the parties in interest on pleadings, evidence, and argument. If any doubt remains that this is the true construction of this decree, the order of confirmation of the sale would remove it. That order confirmed the foreclosure sale—
“on condition that the purchasers pay on demand all claims that have heretofore been allowed by the court, and classed prior and i)aramount to the lien of the first mortgage, and all claims not heretofore adjudged or classed by the court, but which are unadjudged, and that may be hereafter allowed by the court and so classed.”
The claims of the Felkers that were adjudged in the sixth class, and that are now presented here, do not fall within this condition. They were not among those “allowed by the court and classed prior and paramount to the lien of the first mortgage”; nor were they among the claims “not heretofore adjudged or classed by the court, but which were unadjudged,” for they had been adjudged to have no liens prior or paramount to the lien of the first mortgage, and had been classed in the sixth class. This condition in the order of confirmation became part of the contract of sale between the court, its officers, and the parties to the suit, on the one hand, and the purchasers, on the other, and in equity estopped the-former from maintaining any claim that the purchasers took the title subject to, or that they could be required to pay, these claims of the Felkers on any subsequent adjudication by the court of their superiority to the lien of the mortgage.
And the unavoidable conclusion is that the decree of March 8, 1918, was a final decree; that upon pleadings and evidence of the Southern Company and of the Felkers, which presented the issue whether the mortgage of the Southern Company or the claims of-the Felkers here in controversy constituted the superior lien upon the mortgaged
In a second litigation between the same parties, or those in privity with them, upon the same claims or demands, a judgment or decree upon the merits is conclusive, not only as to every matter offered, but as to every matter which might have been offered, in the first litigation, to sustain or defeat in whole or in part the claims or demands. Cromwell v. County of Sac, 94 U. S. 351, 352, 24 L. Ed. 195; St. Louis, K. C. & C. R. Co. v. Wabash R. Co., 152 Fed. 849, 861, 81 C. C. A. 643, 652; Bunch v. United States, 252 Fed. 673, 675, 164 C. C. A. 513, 515; Manhattan Trust Co. v. Trust Co. of North America, 107 Fed. 328, 332, 46 C. C. A. 322, 326; Southern Minn. Ry. Ext. Co. v. St. Paul & S. C. R. Co., 55 Fed. 690, 694, 5 C. C. A. 249, 253.
The decree of dismissal of the petitions and statement of election and claims of the Felkers, and of each of them, to a lien upon the mortgaged property superior to that of the mortgage of 1907, was right, and it is affirmed.
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