48 F. 351 | U.S. Circuit Court for the District of Texas | 1890
(ora//y.) 'Wo have given this application our attentive consideration, and, as there is no difference of opinion among the four judges who have been asked to consider the case, there is no reason
It is denied by the petitioner in this case that it had the power or authority to make such a sale, and it is denied that the Missouri, Kansas
Take these principales as applied to the case before us. The Missouri, Kansas & Texas Railway Compmiy has had possession of the road for many years. It mortgaged that road. The parties to whom it was mortgaged advanced their money on it. They seek to get their money hack by a suit for foreclosure of that mortgage. The Missouri, Kansas & Texas Railway Company docs not deny the jurisdiction of the court. The East Line <S: Red River Railway Compiany does not deny the jurisdiction. But a third person comes here and says, “You have no jurisdiction over this case because the Missouri, Kansas & Texas Railway Company never owned this road.” The reply is, “That is the very question to he tried; that is the thing in issue here. If the Missouri, Kansas & Texas Railway Company, or auv one else interested in it, or anybody having a right to represent it, chooses to contest it, hero is the place to contest it.” The plaintiffs say, “We have taken a valid mort
There is another objection to the application which is clearer than that. Whatever may be the difficulty about the sale of the road and its effect upon the jurisdiction of the court, there is no question that the Fidelity Insurance, Trust & Safe-Deposit Company of Philadelphia had a valid mortgage on this piece of road before it came into the hands of the Missouri, Kansas & Texas Railroad Company, and, as the first mortgagee, has the first equitable right to that road or to have it disposed of for the payment of its debt. It is shown that that debt has all become due— First, because the interest was not paid according to the contract, and, second, because the trustees or owners of the bonds exercised their privilege of declaring that all the principal was due for non-payment of interest, so that the whole sum is now due; and that road, if it stood alone, is liable to the proceeding instituted by the Fidelity Company to foreclose its mortgage and secure its debt. That company, finding itself in that position, with its debt due, none of its interest paid, and its property about to be sold under another mortgage later in date, bestirs'itself to protect its rights. It finds the railroad, which is its security, in the hands of the receivers of the circuit court of the United States. It finds that the company which made the mortgage to it is insolvent. It is useless to sue that company. Its remedy is a proceeding to hold that road which the petitioner is seeking to have placed in his hands for the debt due to the Fidelity Company. Not one of us has any doubt as to the proper course. They cannot fly in the face of authority. They do not want to sue the Missouri, Kansas & Texas Railway Company; it lias nothing. They do not want to sue anybody who has no control of or interest in the company. So we must say the present petitioners wisely come to the court which has possession of the property, and ask to be permitted to intervene for the protection of their rights. The Fidelity Company do not want the property taken out of the possession of this court, and turned over to Mr. Giles, the receiver in the state court suit.
Under the judicial proceedings in the state courts against the corporation called the “East Line & Rod River Railroad Company,” in a quasi criminal proceeding to forfeit its charter rights, to clear it away as an in-cumbrance of the ground, we regard it as having no longer the authority which the state had once given it to build a line of railroad. Mr. Robertson’s language may be as strong as lie chooses to put it, so far as that railroad company is concerned, to show that it has been rendered as dead as possible, and we have no doubt that has been done. But when it is urged that under the statutes of Texas, which give this right to pursue a corporation, and take away its charter, and put an end to its corporate existence, there is also coupled with that right some instruction about what is to be done with the property of the company, and what is to be done about its debts, and that, therefore, that jurisdiction with regard to those debts, with regard to the disposition of its property and with regard to the rights of its stockholders and of its creditors, is an exclusive jurisdiction, — when all this is urged, you cannot, there-lore, oust other courts that have jurisdiction, and especially if they have commenced proceedings anil taken possession of the property, because we may also, in addition to declaring the charter forfeited, dispose of its assets. With regard to questions of that kind, cases have been before us so often that it is hardly worth while to cite authorities. There is hardly a state in the Union that does not provide for the administration of a dead man’s assets in a particular court, an orphans’ court, a surrogate’s court, or under whatever name the court may he established. Those are the courts invested with the jiowcr of administering upon the estates of decedents, and there is never any difficulty about them, with reference to anjr other court having jurisdiction, except that in some cases chancery lias ancillary jurisdiction. But suppose a man who lives outside of the state where these surrogates’ courts are established says, “I am the owner of that piece of property which you are seeking to administer upon; I bought it and paid my money for it; and, although
Of course it is proper to say that-, while four judges have taken part in this hearing, this was done by request of counsel, and that the decree of judgment can only become valid upon its being entered by the judge holding the proper court in the circuit court of the United States for the district of Texas. It seemed, however, to be the wish of counsel, and of Judge Pardee and of Judge Caldwell, that they should have the benefit of the judgment of all the judges in the two circuits (the fifth and eighth) where this property is found and in whose courts it is held, and that they should all unite in hearing this ease. We are glad to say that our opinion is unanimous, and at the proper time that Judge Pardee will properly have entered an order denying the prayer of this petition.