Beers v. Equitable Trust Co. of New York

• Decision Date: 15 February 1923
• Docket Number: 6002.
• Citation: 286 F. 878
• Parties: BEERS et al. v. EQUITABLE TRUST CO. OF NEW YORK et al.
• Court: U.S. Court of Appeals — Eighth Circuit

286 F. 878

BEERS et al. v. EQUITABLE TRUST CO. OF NEW YORK et al.

No. 6002.

United States Court of Appeals, Eighth Circuit.

February 15, 1923

John Lee Webster, of Omaha, Neb. (Arthur M. Wickwire and Daniel W Blumenthal, both of New York City, and Arthur Berenson, of Boston, Mass., on the brief), for appellants.

George Welwood Murray and John F. Bowie, both of New York City (Franklin W. M. Cutcheon and William Roberts, both of New York City, on the brief), for appellees.

Before KENYON, Circuit Judge, and POLLOCK and VAN VALKENBURGH District Judges.

PER CURIAM.

Certain stockholders of the Denver & Rio Grande Railroad Company appeal from the action of the United States District Court for the District of Colorado, refusing them leave to intervene in a suit pending of 'Equitable Trust Company of New York, as Trustee, Intervener and Substituted Plaintiff, v. Denver & Rio Grande Railroad Company Defendant,' for the purpose of objecting to a confirmation of the sale of the properties of the Denver &amp Rio Grande Railroad Company. Appellants are representatives of a stockholders' protective committee.

At the threshold of this case we are met with the claim on the part of appellees that the appeal is from a decree in a proceeding to which appellants were not parties. It is apparent that the intention of the appeal is to secure a review here of the action of the trial court in refusing to permit the petition of said stockholders to be filed for the purpose of making objection to confirmation of the sale to be made under the order of the United States District Court of Colorado.

While from a strictly technical consideration of the entire proceedings there is foundation for the argument that the appeal is from the decree confirming the sale in proceedings to which appellants were not parties, yet we think assignment of error No. 5 does raise the question as to the action of the court in refusing permission to said stockholders of the Denver & Rio Grande Railroad Company, appellants herein, to file their petition of intervention for the purposes therein stated, and we shall so treat it.

The questions presented in brief and argument are numerous. However, in our judgment, the decisions of the courts, to which reference will be made, on these questions, amounting to an estoppel as to many of them, limit our consideration to rather a narrow compass.

This case and its companion cases, No. 5934, 286 F. 886, and No. 6003, 286 F. 883, opinions in which are this day filed, are the culmination of a long series of transactions more or less intricate between a number of railroad companies, to wit, the Missouri Pacific Railway Company, the Western Pacific Railway Company, the Western Pacific Railroad Company, the Denver & Rio Grande Western Railroad Company, and the Denver & Rio Grande Railroad Company.

In 1908, the Denver & Rio Grande Railroad Company and the Rio Grande Western Railroad Company were consolidated under the name of 'the Denver & Rio Grande Railroad Company' (the consolidated company being generally referred to as the 'Denver Company'); the consolidated company assuming the obligations of what is known as contract B, hereinafter referred to, and being the basis of the subsequent litigation. We do not deem it necessary to enter into a long history of these transactions. They are set out fully in the decision of this court in Levy et al. v. Equitable Trust Co. et al., 271 F. 49. The various matters involved are also fully discussed in other cases, viz.: Equitable Trust Co. v. Western Pac. Ry. Co. (D.C.) 231 F. 478; Equitable Trust Co. of New York et al. v. Western Pacific Ry. Co. et al., 231 F. 571, 145 C.C.A. 457; Equitable Trust Co. of New York v. Western Pac. Ry. Co. et al. (D.C.) 233 F. 335; Equitable Trust Co. of New York v. Western Pac. Ry. Co. et al. (D.C.) 236 F. 814; Equitable Trust Co. of New York v. Western Pac. Ry. Co. (D.C.) 244 F. 485; Equitable Trust Co. of New York v. Denver & Rio Grande R.R. Co., 250 F. 327, 162 C.C.A. 397; Denver & Rio Grande R. Co. v. Equitable Trust Co. of New York, as Trustee, etc., 246 U.S. 672, 38 Sup.Ct. 423, 62 L.Ed. 932; and Equitable Trust Co. v. Denver & Rio Grande Railroad Co. (D.C.) 269 F. 987.

The following matters, however, should, as an aid to a clear understanding of the case, be briefly stated: June 14, 1917, appellee the Equitable Trust Company of New York secured judgment in the District Court of the United States for the Southern District of New York against the Denver Company in the sum of $38,270,343.17. The liability of the said Railroad Company arose out of what was known as contract B, which was a contract made and entered into between the Denver & Rio Grande Railroad Company and the Rio Grande Western Company, parties of the first part, the Western Pacific Railway Company, party of the second part, and the Bowling Green Trust Company, as trustee, party of the third part; such contract being, in brief an effort to place the credit of the Denver & Rio Grande Railroad Company behind the Western Pacific Railway Company in its efforts to build from Salt Lake City to San Francisco. The Trust Company which was trustee in the mortgage of the Western Pacific Railway Company and the third party in contract B, was succeeded by the Equitable Trust Company of New York, appellee in this case. Prior to the New York judgment there had been a foreclosure in California against the Western Pacific, and the judgment in the United States District Court in New York represented the deficiency after the proceeds of the California foreclosure had been applied to the indebtedness. The New York case was appealed to the Circuit Court of Appeals in the Second Circuit, which court remanded the same, with instructions to transfer to the law side of the court, and, the case being so transferred, the judgment was affirmed. Equitable Trust Co. of New York v. Denver & R.G.R. Co., 250 F. 327, 162 C.C.A. 397.

August 23, 1917, an action was brought in the United States District Court of Colorado by the Equitable Trust Company...