193 U.S. 93 (1904), 139, Julian v. Central Trust Company

Docket Nº:No. 139
Citation:193 U.S. 93, 24 S.Ct. 399, 48 L.Ed. 629
Party Name:Julian v. Central Trust Company
Case Date:February 23, 1904
Court:United States Supreme Court
 
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193 U.S. 93 (1904)

24 S.Ct. 399, 48 L.Ed. 629

Julian

v.

Central Trust Company

No. 139

United States Supreme Court

February 23, 1904

Argued January 21-22, 1904

CERTIORARI TO THE CIRCUIT COURT OF

APPEALS FOR THE FOURTH CIRCUIT

Syllabus

While the decision of the highest court of a state is entitled to the highest respect and consideration from, it is not conclusive upon, this Court in determining rights secured by a purchaser under a decree of foreclosure in a federal court at a sale made prior to the rendition of such decision.

Under the laws of North Carolina and the decisions of the highest court of that state rendered prior to 1894, there was nothing to prevent property of a railroad company sold under foreclosure passing to the purchaser free from any obligation for debts of the former owner arising thereafter, notwithstanding the purchaser was not a domestic railroad corporation.

Where the federal court acts in aid of its own jurisdiction and to render its decree effectual, it may, notwithstanding § 720, Rev.Stat., restrain all proceedings in a state court which have the effect of defeating or impairing its jurisdiction.

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A purchaser of property sold under a decree of foreclosure in a federal court, in cases where the federal court by its decree retains jurisdiction to settle all liens and claims upon the property and who is in possession of the property under an order confirming the sale, can maintain an action in the same court to restrain the holders of judgments obtained in the state courts against the former owner, in actions to which the purchaser was not a party, from levying upon and selling the property described in the decree of foreclosure and the order confirming the sale thereunder.

On May 2, 1894, a decree was entered in the Circuit Court of the United States for the Western District of North Carolina foreclosing a second mortgage of the Western North Carolina Railroad Company to the Central Trust Company of New York, trustee. The property was subject to a first mortgage to the same trustee which was not in default. The decree provided:

"The purchaser or purchasers of the property herein decreed to be sold," the Western North Carolina Railroad and its franchises,

shall be invested with and shall hold, possess, and enjoy the said mortgaged premises and property herein decreed to be sold, and all the rights, privileges, and franchises appertaining thereto, as fully and completely as the Western North Carolina Railroad now holds and enjoys, or has heretofore held and enjoyed the same, and further, the said purchaser or purchasers shall have and be entitled to hold the said railroad and property discharged of and from the lien of the mortgage foreclosed in this suit, and from the claims of the parties to this suit or any of them, except the first consolidated mortgage of September 1, 1884.

In pursuance of this decree the Southern Railway Company, a corporation of the State of Virginia, became the purchaser. On August 22, 1894, the sale was confirmed, the decree of confirmation providing, among other things:

It is further ordered and decreed that the special master is hereby authorized and directed, on the request of said purchaser, to sign, seal, execute, acknowledge, and deliver a proper deed of conveyance to the said Southern Railway Company, conveying to it, all and singular, the railroad, equipment, property, and franchises so as aforesaid sold under the decree

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of this court, free from any and all equity of redemption of the said Western North Carolina Railroad Company, or anyone claiming by, under, or through it, except the prior mortgage recited [24 S.Ct. 400] in such decree. Upon the delivery of such conveyance by the special master, the said Southern Railway Company shall fully possess and be invested with all of the estate, right, title, and interest in, to, and of such railroad, equipment, property, and franchises so sold under the decree of this Court as the absolute owner thereof, to have and to hold the same to it and its successors and assigns forever.

On August 31, 1894, on exhibition of the deed executed and delivered by the special master herein ordered, the defendant company is authorized, directed, and required forthwith to deliver over to the said Southern Railway Company the possession of all and singular the railroad and property described in and conveyed by such deed.

It is also further ordered that, by way of further assurance and confirmation of title to such Southern Railway Company of the property so by it purchased under the decree of this Court, the said The Western North Carolina Railroad Company, by its proper officers and under its corporate seal, and the Central Trust Company of New York, trustee, shall, upon request of said Southern Railway Company, sign, seal, execute, acknowledge, and deliver to said Southern Railway Company all proper deeds of conveyance, transfer, release, and further assurance of all the railroad property and franchises so as aforesaid sold under the decree of this Court and embraced in the deed of the special master, so as fully and completely to transfer to, and invest in, the said Southern Railway Company the full legal and equitable title to all such railroad property and franchises sold or intended to be sold under the decree of this Court.

Afterwards, the master conveyed to the Southern Railway Company:

All and singular the railroad of the said Western North Carolina Railroad Company in the State of North Carolina, extending from Salisbury, in Rowan County, to and through Statesville, in Iredell County, to Asheville, on or near the

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French Broad River, in Buncombe County; thence along French Broad River to Paint Rock in Madison County, and also from said Asheville westward to the Tennessee River at or near the mouth of the Nantahala River, and thence westward to Murphy in Cherokee County, and all real estate now owned or acquired for the purpose of said railroad, including all station, depot, or other grounds held and used in connection therewith, and all rails, railway tracks, sidings, switches, bridges, fences, turntables, water tanks, viaducts, culverts, superstructures, passenger and other depots, station and freight houses, machine shops, buildings, fixtures, rolling stock, equipment, machinery, tools and implements whatsoever, now owned or acquired for the purposes or business of the said Western North Carolina Railroad Company in connection with the said railroad, and all the franchises, rights, privileges, easements, income, earnings, and profits of the said Western North Carolina Railroad Company connected with, issuing from, or relating to, the said above-described railroad.

The foregoing properties -- real, personal, choses in action, and franchises -- being embraced in the lien of the second mortgage of the Western North Carolina Railroad Company executed September 2, 1884, and being sold in foreclosure of the same.

A more full and particular description of the property intended to be conveyed by this instrument being contained in said decree of the 5th of May, 1894, to which reference is hereby made, together with all the corporate estate, equity of redemption, rights, privileges, immunities, and franchises of said Western North Carolina Railroad Company, and all the tolls, fares freights, rents, income, issues, and profits of the said railroad, and all interests and claims and demands of every nature and description, and all the reversion and reversions, remainder and remainders thereof, including all the said mortgaged premises and property in said decree directed to be sold at any time owned or acquired by, and now in the possession of, said Western North Carolina Railroad Company.

The deed of purchase was duly recorded, and in August, 1894, the purchaser took possession of the railroad property,

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and has ever since been in possession of the road, operating it as owner.

On March 20, 1897, Mrs. James, as administratrix of her deceased husband, W. A. James, brought an action in the Superior Court of Rowan County, North Carolina, against the Western North Carolina Railroad Company for damages for the wrongful killing of her husband. The Southern Railway Company was the employer of the deceased, and he was killed in its service while acting as a locomotive engineer. In the trial court, a judgment was rendered in favor of the railroad company. On appeal, the judgment was reversed, and the cause remanded to the superior court with directions to enter a judgment for the damages assessed in favor of the administratrix. James v. Railroad, 121 N.C. 523. Judgment was entered accordingly against the Western North Carolina Railroad Company for $15,000 on February 21, 1898.

On the same day that the James suit was begun, March 20, 1897, Fannie E. Howard, as administratrix of her husband, John H. A. Howard, deceased, commenced an action [24 S.Ct. 401] in the superior court to recover of the Western North Carolina Railroad Company damages sustained in the death, by wrongful act, of her husband, who was killed at the same time with James, being a fireman in the employ of the Southern Railway Company, and recovered damages in the sum of $5,000 on February 21, 1898. To neither of these suits was the Southern Railway Company made a party defendant. After the recovery of these judgments, Mrs. James and Mrs. Howard caused executions to be issued from the Superior Court of Rowan county and placed the same in the hands of D. R. Julian, sheriff, who proceeded to levy the same upon the property as belonging to the Western North Carolina Railroad Company, to-wit:

The Western North Carolina Railroad Company, existing in the State of North Carolina, including its corporate franchises, rights, privileges, immunities...

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