Brierfield Coal & Iron Co. v. Gay

• Decision Date: 24 April 1895
• Court: Alabama Supreme Court
• Parties: BRIERFIELD COAL & IRON CO. ET AL. v. GAY ET AL.

17 So. 618

106 Ala. 615

BRIERFIELD COAL & IRON CO. ET AL. v. GAY ET AL.

Supreme Court of Alabama

April 24, 1895

Appeal from chancery court, Jefferson county; Thomas Cobbs Chancellor.

Bill by Gay, Hardie & Co. against the Brierfield Coal & Iron Company and others. From the judgment rendered, both complainants and defendants appeal. Reversed.

For former report, see 11 So. 353.

After the remandment of the cause, the complainants amended their bill by averments that after the filing of the original bill the property of the Brierfield Coal & Iron Company described in the mortgage and deed of further assurance had been sold under the decree of the federal court, a deed executed therefor, and the purchaser put into possession. The bill was also amended by making Thomas J. Peter and others, who were the holders of bonds secured by the deed to Plumb, parties defendant. After these amendments were filed, T. J. Peter filed a plea to the local jurisdiction of the chancery court of Jefferson county, on the ground that he did not reside in Jefferson county, that no other defendant resided there, and no part of the property was located in that county. W. L Chambers, by his pleas, which were supported by answer, set up the same grounds of defense relied upon by him in his demurrer to the original bill. The Brierfield Coal & Iron Company refiled the same demurrer which it had interposed to the original bill. The case was submitted on the demurrer and the sufficiency of the pleas of Peter and Chambers, and the chancellor overruled the demurrer and the plea of Chambers and sustained the plea of Peter. The complainants appeal, and assign as error the ruling on the plea of Peter, and the defendants appeal, and cross assign as error the rulings on the demurrer and on the plea of Chambers. The errors assigned by the defendants raise the same questions as were decided on the former appeal, but the amendments to the bill, as stated show that, since the original bill was filed, the decree of the federal court in the case of Chambers, Trustee, v. Brierfield Coal & Iron Co. has been fully executed, and the possession of all the property sought to be subjected was delivered to the purchaser, who had express notice of the pendency of this suit.

D. S. Troy and Alex. T. London, for complainants.

Pettus & Pettus, for defendants.

PER CURIAM.

When this cause was before this court at a former term (Gay v. Iron Co., 94 Ala. 303, 11 So. 353), there was a very elaborate discussion of all the questions now involved in the demurrer of the appellant the Brierfield Coal & Iron Company and the pleas of the appellant Chambers. The result and effect of the decision then made seem fully and clearly summarized in the first headnote of the reporter: "The pendency of a suit in a federal circuit court against an insolvent corporation and its mortgage bondholders, under a bill filed by the trustee in the mortgage and deed of further assurance, in which suit the succeeding trustee, by appointment of the court, has been allowed to issue receiver's certificates, declared to be a first lien on the property, and a decree of foreclosure and sale has been rendered, without any effort to collect the outstanding indebtedness of the stockholders, who are also the principal bondholders, does not oust the jurisdiction of a state chancery court to entertain a bill by simple contract creditors of the corporation, who were not parties to that suit, and could not properly assert their rights therein against the corporation and the trustee, assailing the mortgage bonds as having been issued without consideration in fraud and violation of constitutional provisions, and the judicial proceedings as fraudulent and collusive; but nothing is decided as to the character and extent of the relief which may be granted under such a bill, except that the court cannot interfere with the possession of the property by the trustee or receiver." The essential principle on which the decision depends and was rested is that by the decree of the foreclosure and sale no right or claim of the creditors of the corporation who were not parties was adjudicated, or could be adjudicated, for the reason that their rights or claims were not before the court, and they were without the opportunity to maintain them. Without expressing assent to or dissent from these conclusions, if they were res integra they are now conclusive on the court. It may be, as is argued, that they are in direct conflict with the later case of Hollins v. Iron Co., 150 U.S....