177 U.S. 51 (1900), 108, Farmers Loan and Trust Company v. Lake Street Elevated Railroad Co.
|Docket Nº:||No. 108|
|Citation:||177 U.S. 51, 20 S.Ct. 564, 44 L.Ed. 667|
|Party Name:||Farmers Loan and Trust Company v. Lake Street Elevated Railroad Co.|
|Case Date:||March 26, 1900|
|Court:||United States Supreme Court|
Argued January 19, 1900
ERROR TO THE SUPREME COURT
OF THE STATE OF ILLINOIS
A suit in equity is commenced by filing a bill of complaint, and this general rule prevails also by statute in Illinois.
As between the immediate parties in a proceeding, in rem jurisdiction attaches when the bill is filed and the process has issued, and when that process is duly served in accordance with the rules of practice of the court.
The possession of the res in case of conflict of jurisdiction vests the court which has first acquired jurisdiction with power to hear and determine all controversies relating thereto, and for the time being disables other courts of coordinate jurisdiction from exercising a like power.
This rule is not restricted in its application to cases where property has been actually seized under judicial process before a second suit is instituted in another court, but it applies as well where suits are brought to enforce liens against specific property, to marshal assets, administer trusts, liquidate insolvent estates, and in suits of a similar nature, and it is applicable to the present case.
The Lake Street Elevated Railroad Company was incorporated under the laws of the Illinois in the month of August, 1892, with a capital stock of five million dollars, which was increased in the month of April, 1893, to ten million dollars,
consisting of one hundred thousand shares of the par value of one hundred dollars each.
On April 7, 1893, the company made and delivered a certain mortgage or trust deed to the American Trust and Savings Bank, a corporation of the State of Illinois, and to the Farmers Loan and Trust Company, a corporation of the State of New York, as trustees, to secure the payment of bonds in the aggregate amount of six million five hundred thousand dollars. The said trust companies duly accepted said trust, and the mortgage was afterwards, on May 6, 1893, recorded in the recorder's office of Cook County, Illinois. The amount and number of said bonds were afterwards, in pursuance of provisions contained in the mortgage, increased to 7,574 bonds of the par value of $1,000 each, making the total mortgage indebtedness $7,574,000. The mortgage contained the usual provisions authorizing the trustees, in case of default in payment of the interest coupons for a period of six months, to declare the entire principal debt to have become due and payable, and to proceed by foreclosure or otherwise to enforce the terms of the mortgage.
On January 30, 1896 at ten o'clock and thirty-five minutes A.M., the Farmers' Loan and Trust Company, as a corporation of the State of New York, filed in the Circuit Court of the United States for the Northern District of Illinois a bill of complaint against the Lake Street Elevated Railroad Company, the Union Elevated Railroad Company, the Northwestern Elevated Railroad Company, the West Chicago Street Railroad Company, and the American Trust and Savings Bank, all corporations organized under the laws of the State of Illinois.
The bill alleged that default had been made by the Lake Street Elevated Company in the payment of all interest coupons payable on the 1st day of July, 1895, and on the [20 S.Ct. 565] 1st day of January, 1896; that the Lake Street Elevated Railroad Company had become insolvent, and was unable to pay its debts and obligations; that a foreclosure suit was necessary, and pending the proceeding that it was expedient and necessary to have a receiver appointed. The bill further alleged
that the Union Elevated Railroad Company, the West Chicago Street Railroad Company, and the Northwestern Elevated Railroad Company claimed to have acquired some interest, by lease or otherwise, in the mortgaged property, and that the American Trust and Savings Bank, named as co-trustee in the mortgage, had been requested to join with it as complainant in the bill of foreclosure, but had declined and refused so to do or to take any action in the premises, and was therefore made a party defendant. A subpoena was thereupon issued directed to the several defendants commanding them to appear and answer on the first Monday of March next thereafter.
On the same day, January 30, 1896, shortly after the said bill had been filed and process had issued, the Lake Street Elevated Railroad Company filed in the Superior Court of Cook County, State of Illinois, a bill of complaint against the Farmers' Loan and Trust Company, the American Trust and Savings Bank, and the Northern Trust Company.
The bill, after setting forth the facts attending the issue of the mortgage, alleged that, at the time said mortgage was executed and delivered, the Farmers' Loan and Trust Company, being a corporation under the laws of the State of New York, had not, and had not since, complied with the laws of the State of Illinois which required a deposit with the auditor of public accounts for the benefit of the creditors of said company of the sum of two hundred thousand dollars in stocks of the United States or municipal bonds of the State of Illinois, or in mortgages on improved and productive real estate of such state, being first liens thereon, and the real estate being worth at least twice the amount loaned thereon; that at the time of the execution and delivery and acceptance of said trust under said mortgage, the Lake Street Company, the complainant, did not know that the Farmers' Loan and Trust Company had not complied with the laws of the State of Illinois, and that, since the acceptance of said trust, the Farmers' Loan and Trust Company had been doing...
To continue readingFREE SIGN UP