Farmers' Loan & Trust Co. v. McClure, 786.

• Decision Date: 25 January 1897
• Docket Number: 786.
• Citation: 78 F. 211
• Parties: FARMERS' LOAN & TRUST CO. v. McCLURE.
• Court: U.S. Court of Appeals — Eighth Circuit

78 F. 211

FARMERS' LOAN & TRUST CO. v. McCLURE.

No. 786.

United States Court of Appeals, Eighth Circuit.

January 25, 1897

J. G Taylor, for appellant.

John McClure, for appellee.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

SANBORN Circuit Judge.

On July 20, 1895, the Farmers' Loan & Trust Company, as trustee for the bondholders under a mortgage made by the Stuttgart &amp Arkansas River Railroad Company on March 1, 1890, filed a bill in the circuit court for the Eastern district of Arkansas to foreclose that mortgage. The only defendant in that suit was the railroad company. On August 20, 1895, on the motion of the trust company, a receiver of the mortgaged property was appointed. On October 12, 1895, John McClure the appellee, filed a petition of intervention in that suit in which he prayed that an allowance of $2,500 might be made to him as compensation for services as attorney for the complainant in the suit, and that $500 might be allowed to the estate of Amos C. Barstow. On January 7, 1896, the court decreed that the appellee should recover of the Stuttgart & Arkansas River Railroad Company $2,500 and his costs, that the estate of Amos C. Barstow should recover $250 from the railroad company, that these amounts constituted liens secured upon the mortgaged property superior to the lien of the mortgage debt, that the receiver should issue certificates to these two creditors for the amounts so found to be due to them, and that he should ultimately pay the certificates out of the proceeds of the sale of the mortgaged property before he paid the mortgage debt. On February 1, 1896, J. M. & J. G. Taylor, as attorneys of the Farmers' Loan & Trust Company, and as attorneys of the Stuttgart & Arkansas River Railroad Company, prayed and were allowed an appeal to this court from this decree. On April 11, 1896, the circuit court made the following order:

'Now on this day, a day of the October term, 1895, it being made to appear to the court that the defendant the Stuttgart & Arkansas River Railroad Company hath not prayed an appeal in this cause, and that said defendant never authorized J. M. & J. G. Taylor, as solicitors, to pray an appeal on its behalf, the order granting said appeal at the present term on the 1st day of February, 1896, is set aside, and held for naught, in so far as it grants an appeal to the Stuttgart & Arkansas River Railroad Company.'

Upon this state of facts the appellee moved to dismiss the appeal in this case on the ground that the Stuttgart & Arkansas River Railroad Company is interested in the ruling and decree in issue, and is not before the court. The rule that all the parties to the record who appear to have an interest in the decree or order challenged must be given an opportunity to be heard on an appeal from it is too well settled to warrant discussion. The reasons for the rule are stated in Masterson v. Herndon, 10 Wall. 416, and in Hardee v. Wilson, 146 U.S. 179, 181, 13 Sup.Ct. 39. Two of them are: (1) 'That the successful party may be at liberty to proceed in the enforcement of his judgment or decree against the parties who do not desire to have it reviewed;' and (2) 'that the appellate tribunal shall not be required to decide a second or third time the same question on the same record. ' The fact that a mortgagor who is a party to a record in a suit to foreclose his mortgage, is interested in every order or decree in such a suit which gives the claim of an intervener a priority over the mortgage, or a right to priority of payment out of the proceeds of the sale of the mortgaged property, seems obvious, because such an order or decree necessarily increases by the amount so paid the deficiency for which the mortgagor will remain personally liable after the sale of the property. This is clearly demonstrated in the opinion of Judge Shiras in Gray v. Havemeyer, 10 U.S.App. 456, 3 C.C.A. 497, and 53 F. 174, 178, and in Davis v. Trust Co., 152 U.S. 595, 14 Sup.Ct. 693. The Stuttgart & Arkansas River Railroad Company is personally liable for the mortgage debt under the bonds and mortgage in this suit. If the property mortgaged does not realize at the sale the necessary amount to pay the mortgage debt, the railroad company will remain indebted for the deficiency, which will doubtless ultimately be evidenced by a judgment against it. If the interlocutory decree, which allows and gives priority over the mortgage debt to the claims of the...