Connor v. Tennessee Cent. Ry. Co.

• Decision Date: 04 June 1901
• Docket Number: 893.
• Citation: 109 F. 931
• Court: U.S. Court of Appeals — Sixth Circuit
• Parties: CONNOR v. TENNESSEE CENT. RY. CO.

109 F. 931

CONNOR v. TENNESSEE CENT. RY. CO.

No. 893.

United States Court of Appeals, Sixth Circuit.

June 4, 1901

The Tennessee Central Railroad Company is a Tennessee corporation, authorized to construct and operate about 60 miles of railroad beginning at Monterey, in Putnam county Tenn., and extending to a junction with the Cincinnati Southern Railway at or near Glen Mary. In September, 1893 said railroad company entered into a contract with the appellant, J. H. Connor, for the complete construction of said railroad, including the ironing of its road and the construction of depots, water tanks, switches, etc.; Connor to furnish all materials and obtain necessary rights of way. For this he was to receive a fixed sum, partly in money and partly in first mortgage bonds, both payable in installments as the work progressed. After grading a section of about 10 miles, beginning at Monterey, and extending east, he threw up his contract in April, 1894, claiming that the company had made default in payments, and was insolvent. May 25, 1894, he filed an original bill in equity in the circuit court of the United States at Nashville against the railroad company claiming a balance due him for work done, and a lien therefor under the Tennessee statute giving to contractors a lien for work done in construction of any railroad. That bill averred that the said company was proceeding with the construction under contracts with other contractors, and asserted a lien for the balance due, not only upon the roadbed, bridges trestles, culverts, etc., constructed by the complainant, but a lien upon the entire railroad, that constructed as well as that under construction, its franchises and property of every description. The bill prayed that the said railroad, including its franchises, should be sold for the payment of his debt and the enforcement of his statutory lien. It was not filed as a creditors' bill, and the only defendant was the railroad company. The railroad company answered and defended, and such proceedings were had as resulted on May 28, 1896, in a decree fixing the liability of the railroad company at $21,421.78. The decree then proceeded as follows: 'The court is further of opinion that the foregoing judgment is a lien upon portion of the defendant railroad company commencing with the town of Monterey, in the county of Putnam, and continuing in a southeasterly direction for ten miles; said strip of land being one hundred feet wide, upon which there has been constructed a roadbed for said railroad, fourteen feet wide at its crest; and that there are also within and upon said property various cuts, trestles, and bridges,-- upon all of which said judgment constitutes a lien, the court being of opinion that complainant is entitled to have so much of said railroad sold for the satisfaction of the aforesaid judgment. It is therefore adjudged and decreed by the court that H. M. Doak, in his character as special commissioner under appointment heretofore made, will proceed at once to sell the above-described property after advertising the same as required by law or rule of this court. He will make said sale at the custom house in the city of Nashville, and will sell said property to the highest bidder for cash, free from any equity of redemption or repurchase. Said commissioner will make his report to the next term of this court how he has executed this decree. ' No step in execution of this decree was taken until October 28, 1899, when the order of sale was revived. On November 11, 1899, it was again revived, and the decree amended so as to require the property to be sold at the custom-house door in the town of Cookeville, in the county of Putnam, instead of at the custom house in Nashville. Before that decree of sale had been executed, the Tennessee Central Railway Company intervened, and by leave of the court filed a petition praying that the court would perpetually stay the execution of said order of sale, and protect its rights against the cloud which would thereby be thrown upon its title as the purchaser of the property and franchises of the Tennessee Central Railroad Company. A temporary injunction was granted, and Connor answered said petition, denying that he was ever a party to the Walker suit, and setting out that he was a nonresident of the state when that bill was filed, had never appeared in said suit, and was still a nonresident of Tennessee. He also took issue upon every material matter set up as a ground for restraining the execution of his decree. Upon the issues thus made up and the evidence the circuit court, upon final hearing, perpetually enjoined Connor from the enforcement of his lien by a sale of the roadbed described in his decree, but otherwise permitted the decree to stand unaffected. From this decree Connor has appealed.

The essential facts established and necessary to be regarded in the judgment to be pronounced are these:

Connor's bill was filed in the circuit court May 25, 1894. The bill was not a creditors' bill, and its sole purpose was to enforce the statutory lien of a railroad constructor for his exclusive benefit. While the bill prayed for the appointment of a receiver, none was in fact ever appointed, and the property against which he asserted his lien was never attached or otherwise taken into the actual custody of the court. On April 3, 1895, and before any final decree under Connor's bill, J. C. Walker and others, claiming to be creditors of the said railroad company, filed a general creditors' bill in the state chancery court for Cumberland county. The object of that suit was to set aside certain mortgages made by the company as fraudulent, and to have the company would up as an insolvent corporation. The bill was filed for the benefit of all creditors, and sought to have all debts ascertained, all liens and priorities declared, and the property sold free from all liens and incumbrances, and the proceeds applied to the payment of debts in the order of their rank. October 23, 1895, the chancellor ordered the bill to stand as a creditors' bill, and that the clerk and master should make publication requiring all creditors to come in and make themselves parties on or before the first Monday in April, 1896, on penalty of being deprived of all the benefits of the suit. It was further ordered that the institution of any other suits against the said company be enjoined. On the same day a receiver was appointed, who was ordered to take into his possession all the property and effects of the said company. At the date of the filing of this creditors' bill about 23 miles of the roadway of said company had been graded, and it is inferable that some bridge and trestle work had been constructed. Aside from this incomplete roadway and some cross-ties, bridge timbers, and commissary stores, it does not appear that said company owned any other property whatever, save certain conditional subscriptions to the stock of the company, dependent upon the construction of the railroad into or through certain mountain counties. The defendants named in the caption of the bill, other than the railroad company, included J. H. Connor & Co., described as 'contractors of the defendant' railroad company 'operating in Cumberland county.' A final decree was rendered in the suit of Connor, May 28, 1896. Connor stood by and took no step to enforce this decree for a period of more than three years. In the meantime the creditors' suit in the state court was proceeding. General publication for four successive weeks was made in November and December, 1865, requiring all creditors to file their claims by April 1, 1896. January 12, 1897, an alias subpoena to answer issued to the sheriff of Cumberland county, requiring him to summon J. H. Connor & Co. to appear and plead to the February rules. This was returned January 15, 1897, 'Search made, and the defendant not to be found in my county. ' On the day of this return an order was made on the rule docket by the clerk and master in these words:

'J. H. Walker et al. vs. Tennessee Central Railroad.

'In the Chancery Court at Crossville, Tennessee.

'In this cause it appearing by the sheriff's return that J. H. Connor & Co., one of the defendants, is not to be found in the county, and that search has been duly made by such sheriff, they are therefore hereby required to appear on or before the first Monday of March next before the clerk and master of said court at his office in Crossville, Tennessee, and make defense to the bill filed against them in said court by J. C. Walker et al., or otherwise the bill will be taken for confessed. It is further ordered that this notice be published for four consecutive weeks in the Crossville Chronicle.

'This January 15, 1897. H. G. Dunbar, C. & M.'

Publication was duly made as required by this order, and in the mode and manner required by the statute of the state. It is further shown by the clear weight of evidence that the firm of J. H Connor & Co. consisted of J. H. Connor and B. L. Jett. Whether Connor and Jett were partners at the date of the construction contract between the railroad company and J. H. Connor is not very clear. But it does appear that very shortly after that contract was signed Jett became jointly interested with Connor as a partner, and that the work was thereafter carried on by them as partners under the name of J. H. Connor & Co. The written contract stood in the name of J. H. Connor, and the suit in the circuit court was conducted in Connor's name alone, and the decree is in the name of J. H. Connor, but the decree is for and upon a partnership claim. The railroad company, in its answer, stated that B. L. Jett was associated with J. H. Connor, and should be a party. But no plea in abatement or bar was filed, and the issue seems to...