113 F. 531 | U.S. Circuit Court for the District of Western Wisconsin | 1902
(orally). The facts in the matter presented to the court are not greatly involved, and are _ substantially uncontradicted. The Washburn, Bayfield & Iron River Railway Company was incorporated in 1895, under the general laws of the state of Wisconsin, to construct a railroad from Iron River to Wash-burn, in the county of Bayfield. This road ran through timber land, and manifestly, from the evidence here, it depended for its profitable operation upon the timber to be gotten out of that country. Spur lines or branches were constructed from the main line into the woods, and used for the purpose of hauling timber. On or before the xst of January, 1898, the railroad company issued its trust deed to the complainant, to s'ecure its bonds to the amount of $535,-000, payable in 20 years, of which amount of bonds $237,000 were issued, put upon the market, and disposed of. The county of Bay-field also issued its bonds, and delivered them to the company, to aid in the construction and operation of the road. These bonds of the railway company were issued on the 1st of January, 1898, and ■default was made in the payment of the first installment of interest accruing thereon, July 1, 1898. In December, 1898, by reason of such default, and for the purpose of foreclosing the mortgage upon the road, the trustee in the trust deed filed its bill in this court for the foreclosure of the trust deed. A receiver was thereupon appointed, by the consent of all of the parties to the suit, to take possession for the court of this road, and to operate it in the interest of all parties concerned. The receiver and his successors in office have so operated that road from that date until nearly the present time, — a period of a little less than three years. During that period the court found it necessary, for the protection of the road and for the interest of the parties, to cause to be issued receiver’s notes and receiver’s certificates. It would seem that, aside from the debt which the road was under to the trustee and bondholders, it must have had quite a large floating debt at the time of this foreclosure, for receiver’s certificates and notes were issued to the amount of over $220,000 for obligations incurred by the receiver in the management and operation of the road during the time mentioned, and for preferred claims against the road. It would also seem that the country between the termini of this road had been largely, if not wholly, denuded of its timber, and that the road was operated at great loss, and that it has resulted that the bondholders, interested to the amount of over a quarter of a million of dollars, have abandoned all hope of receiving anything upon their debt, and that the road, in possession of this court, must be disposed of by the court merely in the hope to recover, if possible, the whole or a part of the obligations which the court, through its receiver, had incurred in the maintenance and operation of the road. On July 23d a decree of foreclosure was passed; the total obligations of the road at that time, including receiver’s certificates, being $546,857. The decree provided for the sale of the road at an upset price of $225,600, which was then the amount supposed to be due for the receiver’s obliga
As to the first objection, — that this decree was entered at a subsequent term, and was without authority, — assuming that any one but the parties to the suit and their privies may raise the objection, the court is of opinion that the objection is not well founded. A decree of foreclosure is, in a sense, a final decree, adjudging the
An interesting and important question is suggested by the proposition that, upon the abandonment of operation of a railroad, the property — the rails, the rolling stock, engines, and equipment — of the road passed to the state, upon the theory that it is a public highway. In support of that doctrine, — which at first blush seems startling and novel, because the state of Wisconsin has authorized railroad companies to mortgage their property and to issue their bonds, and.for the foreclosure of all such mortgages,_and for reorganization of the road by the owners of the bonds, — they insist that the doctrine is maintained by a decision of the supreme court of Pennsylvania, 'rendered by no less a distinguished jurist than Judge Black. Railroad Co. v. Casey, 26 Pa. 287. If that decision is fully applicable here, it certainly is entitled to great weight as the expression of a distinguished jurist, although it is proper to say that the decision was by a divided court, of three to two; one of the dissentients being a no less distinguished jurist than Judge Woodward. But there the road had, under the act, for one of its termini, the city of Erie, and it was sought in a way to pass by the city of Erie, and make the road a connecting link with a road to the West; and the legislature repealed its charter, and appointed an agent to take possession of the property and operate it as a public highway; and an injunction was sought, which injunction was denied; and finally an act of the legislature was passed restoring the railroad company to its former rights, under certain conditions; and the bill was still prosecuted, after the complainant had been put into possession under the act of the legislature, for the profits arising from the operation of the road by the agent of the state, and that right was denied by the court. There are some expressions by Mr. Justice Black in that opinion which are, as were most of his opinions, couched in strong and vigorous language, and which s.eem, in a measure, to support the contention of counsel. There are, however, other decisions, which have- more or less .bearing upon the proposition, to the effect that the courts would not undertake to compel a railroad company to operate a railroad at a loss
It is to my mind — and I regret to be compelled to refer to the subject — a matter of astonishment that the distinguished jurist who presides over the circuit court for the county of Bayfield could by any possibility have issued such a judgment and writ and order of injunction as are here presented. I cannot but believe that he was either deceived in the issuance of the writ and order, or labored under gross misapprehension of his duty. If there is one principle of the law which should be known to all lawyers, which is absolutely essential to the preservation of order in society, and to the enforcement of the rights of parties, it is that the final decree of a court having jurisdiction shall not be interfered with by any other court. These parties saw fit to invoke the supposed aid of that court. With the exception of Mr. McLeod, they were all laymen. They claimed to be interested, as taxpayers of Bayfield county, and as merchants, in having that road maintained. I do rot know if they supposed they had a right to have the railroad company or its bondholders or its receiver operate, the road at a loss for their benefit; but, whatever their motive, the saw fit to invoke the supposed aid of that court, and to obstruct and hinder and resist the receiver in the execution of the decree of this court. It is said that they had a right to sue the receiver in that court, and they base their right upon section 3 of the act of congress of August 13, 1888 (25 Stat. 436), which is;
*538 “That every receiver of any property appointed hy any court of the United States may be sued in respect of any act or transaction of his in carrying on the business connected with such property, without the previous leave of the court in which such receiver was appointed; but such suit shall be subject to the general equity jurisdiction of the court in which such receiver was appointed, so far as the same shall be necessary to the ends of justice.”
As I remarked during the argument, the history of that provision is well known. Before that act the receiver of a railroad, standing in the shoes of the railroad corporation, operating the road, incurring indebtedness, incurring obligations with respect to the carriage of property and persons, and subject to liability for accidents upon the road, could not be sued, except by leave of the court, even in the court which appointed him. The • consequence was that, with respect to a road running through a great extent of country, persons having lawful and just claims against the receiver, either for property sold him,’ or for wrongs suffered through' the operation of the road, were obliged to go to a great distance, and to resort to the court having jurisdiction of the matter. That was found to be burdensome to litigants, and so it .was provided that, with respect to such claims (for you will observe the language of the act, “may be sued in respect of any act or transaction of his in carrying on the business connected with such property”), he may be sued in any court of any jurisdiction which could properly assume jurisdiction under any circumstances, and have his right determined. The execution of that judgment was not according to the ordinary forms of execution' of judgments rendered by such court, but that judgment must be brought into the court of original jurisdiction, and satisfied by that court out of the funds in the possession of that court; courts of original jurisdiction recognizing, by comity, the action of other courts in adjudging the claims. But the statute most certainly has no reference to a suit brought to direct the receiver or special master to disobey the decree of the court which specifically directed him to do certain things. It most certainly was not designed to permit a state court to render nugatory the decree of the federal court having.jurisdiction, by enjoining the officer of the federal court from executing the decree of the court under whom he was acting; for that is simply to bring about anarchy, and to render the administration of justice a travesty. I cannot but think, therefore, that the action of these parties in instituting these proceedings was a resistance to the decree of the court. They knew of it. They set the entire proceedings forth in their petition for this writ. They say to this circuit court of Bayfield county:
“Tbe circuit court of tbe United States for tbe Western district of Wisconsin has decreed thus and so. We insist the decree is void, and we ask you to prevent and enjoin tbe officers of tbe federal court from carrying out the instructions of tbe federal court, and tbe decree of that court”
But they say that they were advised that this decree was void, —
The action of the other two respondents, the sheriff and Mr. McLeod, stands upon different footing. The sheriff made actual, forcible resistance to the execution of this decree. He seeks to justify his conduct, but he seems somewhat doubtful upon what ground to justify it, for he first pleads justification under the peremptory writ of mandamus; secondly, under an order of injunction that was in, his hands for service; and, thirdly, under a statute of the slate of Wisconsin which forbids a person from taking up a spike or rail or in any way injuring any railroad. As to his first excuse, lie had no more to do with that peremptory writ of mandamus, as it was called, than a child, and it was a matter with which he was not concerned. He liad no more to do with that order of injunction, except to serve it upon the parties, than a child. He had no right to set himself up as judge and executioner. He had no right to determine whether these parties were violating the orders of the circuit court of Bayfield county. He had no writ from any court commanding him to interfere witli the execution of the decree of this court. This writ — this order of injunction— ran to this receiver. If he violated the lawful order of the circuit court of Bayfield county, he was responsible to that court, and the sheriff had no right of interference. Nor does the statute invoked have any reference to any such case as the present. It seeks to punish one who for a wicked purpose should interfere with the operation of a railway, and make possible the destruction of life or property, by maliciously taking up a spike or rail, seeking to destroy life or property. It had no reference to the act of an owner, or one lawfully talcing up a rail. The conduct of the sheriff is without justification or mitigation, except that he says he acted upon the advice of Mr. McLeod; and that, as I have said with reference to the other respondents, is no justification. Whether in his case it may lie considered even in mitigation is to my mind extremely doubtful. Here was an officer of the law, bound to respect and to execute the law, — bound to confine himself to the legitimate exercise of his powers, — -undertaking, without writ and without warrant, to obstruct and resist the process of the law issued from this court; of his own motion, except as he acted under the advice of the district attorney, surrounding himself with a posse of deputy sheriffs to prevent the execution of the decree of this court. He knew- — he was bound to know — that he ought not to follow such advice. He was bound to know that no advice to resist the law could shield him in tlie performance of the acts which he did. He arrested the servants of tliis receiver, — carried them 30 miles away, — as he asserts, for violation of the injunction, of which they had not been convicted, with which they had not been charged in court, and held them to bail. Who held them, and for what they were held, and under what sort of statute or law, the answer is silent, and the fact does not appear.
With respect to these men who, so far as the record shows, simply attempted to resist the decree of this court by undertaking to annul its decree by applying to.another court, I have doubted somewhat as to the extent of the punishment which would be adequate. I have sought to look at their conduct leniently. I have considered they were laymen. I have considered that they were, in a sense, interested as taxpayers, and had, perhaps, a strong interest that this road should be maintained. I have sought to consider and to recognize the weakness of human nature, and that they have allowed their feelings to’ run away with their judgment. I have come to the conclusion, as to them, that a fine of not a large amount would be sufficient in the present case. And'the judgment of the court as to them will be that each of them — there are six of them— be fined, for the contempt it is found they have committed, in the sum of $250, and that each of them be imprisoned in the county jail of the county of Dane until such fine be paid.
With respect to Mr. McLeod and the sheriff, Mr. Lien, the court cannot deal with them upon the same basis.' There has been in their case flagrant and unwarranted resistance to the decree of this court, and that by parties who knew better, whose education taught them better, whose position demanded of them respect of the judgment of the court, not forcible resistance to it. It is a very sorry sight for a district attorney of a county, and a member
_ I trust that this will be the end of forcible resistance to this decree. I trust that those who recognize the situation will see to it that the time for forcible resistance to the law is passed, — will see to it that, whatever rights the state of Wisconsin may have, and whatever rights these parties may have, they are not to be obtained by defiance of a decree of the court. If any error has intervened in the proceedings of this court, there are methods in the courts of the land by which such error may be corrected, but it cannot be tolerated that there shall be forcible resistance to a decree of a court.