City of Shelbyville, Ky., v. Glover

• Decision Date: 06 December 1910
• Docket Number: 2,071.
• Citation: 184 F. 234
• Parties: CITY OF SHELBYVILLE, KY., v. GLOVER.
• Court: U.S. Court of Appeals — Sixth Circuit

184 F. 234

CITY OF SHELBYVILLE, KY., v. GLOVER.

No. 2,071.

United States Court of Appeals, Sixth Circuit.

December 6, 1910

J. B Baskin and P. J. Beard, for appellant.

A. E Richards, for appellee.

Before SEVERENS, WARRINGTON, and KNAPPEN, Circuit Judges.

KNAPPEN Circuit Judge.

This is an appeal from an interlocutory order granting an injunction restraining the city of Shelbyville from interfering with the receiver of the Louisville & Eastern Railroad Company in the construction by that officer of a depot abutting upon Main street in the city of Shelbyville on which the railway track was laid, and in the construction of a Y from the track to the depot lot. The important facts are these:

The Louisville & Eastern Railroad Company was organized under the laws of Kentucky for the purpose of building and operating an electric railway from Louisville to Lagrange, with branches to Shelbyville and other places. On April 3, 1906, the Shelby county fiscal court gave said railroad a franchise in the following terms:

'The Louisville & Eastern R.R. Co. is hereby granted a right of way over the Shelbyville & Louisville pike, beginning in the middle of said pike at the western limits of the city of Shelbyville, Ky., thence running about west in the middle of said pike to a point opposite the western boundary of the yard of Mrs. Gordon Logan, thence W. on the north side of the said right of way of the Shelbyville & Louisville pike to the western boundary on the Agricultural & Mechanical Association Grounds. Said railroad not to obstruct the ditches or culverts along said pike. The part that is in the middle of the said pike shall conform to the present grade of the pike, the top of the rails not to extend above the metal of the pike next to them, and said track is to be laid as far from the center of pike as practicable, and to keep in repair and maintain road between tracks and three feet on either side thereof until they pass Mrs. Gordon Logan's residence, or the other end of her pavement.'

A month later, and on May 3, 1906, the city of Shelbyville gave the railroad company a right of way over Main street (which was a continuation of the Shelbyville & Louisville pike), upon condition that the railroad company should reconstruct certain parts of Main street and should extend its line to Eminence, Ky., by August 1, 1908, under an agreement to pay the city $2,000 for each year of default in making that extension, and with provision for the reverting of the right of way to the city of Shelbyville in case the road was not constructed to and through that place by August 1, 1907. The railroad company partially constructed its line through Shelbyville, but never completed any part of it. The city accordingly repudiated the franchise and ordered the ties, rails, poles, etc., removed from the streets, and on August 8, 1907, began suit in equity in the Shelby county circuit court, asking that the right of way be adjudged to have reverted to the city, that the company be required to remove the material, construction, and equipment from the streets, and for injunction restraining further construction through Shelbyville. Meanwhile, in June, 1907, the city limits of Shelbyville had been extended westerly so as to take in about 1,637 feet of the pike, being that part included within the franchise previously granted by the Shelby county fiscal court, the pike so taken in thus becoming a part of Main street. The line to Eminence was never built. The company began the construction of its line from Beechwood to Shelbyville, but never finished it. On October 23, 1908, in a suit brought by William Love in the Circuit Court of the United States for the Western District of Kentucky, in equity, appellee was appointed receiver over the railroad company. He took the position that it was impracticable for his insolvent road to build and operate through Shelbyville under the conditions of the ordinance of 1906, and negotiations for a satisfactory modification of those terms having failed, on June 11, 1909, the court instructed the receiver to complete and equip the extension from Beechwood to the old limits of Shelbyville, and thus on the part of the pike over which the right of way had been granted by the Shelby county fiscal court, the validity of which grant has never been questioned. The order directing such extension is not in the record, but it seems to be assumed that it contemplated establishing the old western limits of Shelbyville as a terminus (at least temporary) of the Shelbyville extension, and that terminal requirements included a depot and a Y for the switching of cars. The receiver bought a lot adjoining Main street (on the south), near the old western limits of Shelbyville. His request for permission from the city to construct a depot was refused, and the city having threatened to interfere with the building of the depot and Y, the receiver filed his petition in the original suit for an injunction against such interference. After the filing of said petition the city, on its own motion, discontinued its suit in the Shelby county circuit court for the cancellation of the city's franchise. The city's pleas to the jurisdiction of the court under the receiver's petition having been overruled, answer was filed accompanied by affidavits. Hearing on the motion for injunction was had upon the receiver's petition and the city's answer, and affidavits filed on both sides, no oral testimony being taken.

The jurisdiction of the court to entertain the receiver's petition for injunction is denied by plaintiff upon the ground that the controversy arising under the petition was an independent and adverse controversy between the receiver and the city, first, over the validity of the city's ordinance requiring the city's permission to erect the depot, and, second, over the right of the receiver to occupy the portion of the street proposed to be taken for the Y, the adverse possession of which portion the city claims to have had prior to the receivership; and that such adverse controversy cannot be tried except in a plenary suit. Mueller v. Nugent, 184 U.S. 1, 22 Sup.Ct. 269, 46 L.Ed. 405, is relied upon as authority for this proposition. In our opinion the case before us is not ruled by considerations pertaining to the statutory proceeding in bankruptcy, and the case cited is not pertinent.

We think the objection under consideration was not properly raised in the court below. The plea which we understand to be relied upon for the purpose asserts--

'that the subject-matter of said petition lies in the county of Shelby and commonwealth of Kentucky, and is not situated in the jurisdiction of this court for the Western District of Kentucky; that this court had no jurisdiction, nor has it any jurisdiction, to appoint the said Henry Glover receiver, for the purpose and with directions to take possession of the subject-matter involved in said petition. Wherefore (the defendant) insisting upon its exemption from suit in this court, and upon its right to have the matter set forth in said petition adjudicated within the court having proper jurisdiction, it says that this court has not jurisdiction in the premises of this defendant.'

That the defense we are considering was waived unless properly presented below is clear. Lake Shore & M.S. Ry. Co. v. Felton (6th circuit) 103 F. 227, 229, 43 C.C.A. 189. But assuming that the objection to the jurisdiction of the court is still open: There was jurisdiction in the original suit over the property in the Eastern District of Kentucky by virtue of a suit brought in the Western District of that State, in which part of the defendant's property was situated. Horn v. Pere Marquette Ry. Co. (C.C.) 151 F. 626, 631. The petition is a dependent proceeding, and depends for its jurisdiction (so far as the citizenship of parties is concerned) not upon the conditions requisite to an independent suit, but upon the jurisdiction of the case in which it is filed. A proceeding by a receiver to enjoin another from interfering with his possession of property may properly be by petition in the suit in which he was appointed, although the proposed defendant is not a party to such suit, when his rights can be as fully protected in such proceeding as in a separate suit, which is a matter to be determined by the court in the exercise of its discretion. Lake Shore & M.S. Ry. Co. v. Felton, supra.

No reason was assigned below, so far as shown by the record, and none is suggested here, why the defendant's rights cannot be as well protected by a proceeding in the receivership suit as in a new and independent suit, nor under a dependent petition rather than a dependent bill. In our opinion the questions we are considering were not so far adverse, nor was the city's possession of the street not previously occupied by the Y so far of that nature, as to exclude the authority of the court to determine controversies respecting the right to use the street. As already said, the validity of the ordinance of the fiscal court, granting the right of way over the street, was not denied. The receiver was lawfully proceeding to construct the road thereunder, and in pursuance of the order of the court which appointed the receiver. Prior to the receivership no controversy existed either as to the right to build the Y or construct the depot. Those controversies arose simply in an attempt to construct the road under the interpretation placed by the receiver upon the grant. The subject-matter of the contract was merely the construction and interpretation of the grant under which the road itself (as distinguished from the Y) was being lawfully built. In our opinion the receiver had such concurrent possession of the street, growing out of his actual...