Farmers Loan Trust Company v. Lake Street Elevated Railroad Company, No. 108

CourtUnited States Supreme Court
Writing for the CourtShiras
Citation44 L.Ed. 667,177 U.S. 51,20 S.Ct. 564
Docket NumberNo. 108
Decision Date26 March 1900
PartiesFARMERS' LOAN & TRUST COMPANY, Plff. in Err., v. LAKE STREET ELEVATED RAILROAD COMPANY, American Trust & Savings Bank, and Northern Trust Company

177 U.S. 51
20 S.Ct. 564
44 L.Ed. 667
FARMERS' LOAN & TRUST COMPANY, Plff. in Err.,

v.

LAKE STREET ELEVATED RAILROAD COMPANY, American Trust & Savings Bank, and Northern Trust Company.

No. 108.
Argued January 19, 1900.
Decided March 26, 1900.

Page 51

The Lake Street Elevated Railroad Company was incorporated under the laws of the State of Illinois in the month of August, 1892, with a capital stock of $5,000,000, which was increased in the month of April, 1893, to $10,000,000,

Page 52

consisting of 100,000 shares of the par value of $100 each.

On April 7, 1893, the company made and delivered a certain mortgage or trust deed to the American Trust & Savings Bank, a corporation of the state of Illinois, and to the Farmers Loan & Trust Company, a corporation of the state of New York, as trustees, to secure the payment of bonds in the aggregate amount of $6,500,000. The said trust companies duly accepted said trust, and the mortgage was afterwards, on May 6, 1893, recorded in the recorder's office of Cook county, Illinois. The amount and number of said bonds were afterwards, in pursuance of provisions contained in the mortgage, increased to 7,574 bonds of the par value of $1,000 each, making the total mortgage indebtedness $7,574,000. The mortgage contained the usual provisions authorizing the trustees, in case of default in payment of the interest coupons for a period of six months, to declare the entire principal debt to have become due and payable, and to proceed by foreclosure or otherwise to enforce the terms of the mortgage.

On January 30, 1896, at ten o'clock and thirty-five minutes A. M., the Farmers' Loan & Trust Company, as a corporation of the state of New York, filed in the circuit court of the United States for the northern district of Illinois a bill of complaint against the Lake Street Elevated Railroad Company, the Union Elevated Railroad Company, the Northwestern Elevated Railroad Company, the West Chicago Street Railroad Company, and the American Trust and Savings Bank, all corporations organized under the laws of the state of Illinois.

The bill alleged that default had been made by the Lake Street Elevated Company in the payment of all interest coupons payable on the 1st day of July, 1895, and on the 1st day of January, 1896; that the Lake Street Elevated Railroad Company had become insolvent, and was unable to pay its debts and obligations; that a foreclosure suit was necessary, and pending the proceeding that it was expedient and necessary to have a receiver appointed. The bill further alleged

Page 53

that the Union Elevated Railroad Company, the West Chicago Street Railroad Company, and the Northwestern Elevated Railroad Company claimed to have acquired some interest, by lease or otherwise, in the mortgaged property, and that the American Trust & Savings Bank, named as cotrustee in the mortgage, had been requested to join with it as complainant in the bill of foreclosure, but had declined and refused so to do or to take any action in the premises, and was therefore made a party defendant. A subpoena was thereupon issued directed to the several defendants, commanding them to appear and answer on the first Monday of March next thereafter.

On the same day, January 30, 1896, shortly after the said bill had been filed and process had issued, the Lake Street Eievated Railroad Company filed in the superior court of Cook county, state of Illinois, a bill of complaint against the Farmers' Loan & Trust Company, the American Trust & Savings Bank, and the Northern Trust Company.

The bill, after setting forth the facts attending the issue of the mortgage, alleged that at the time said mortgage was executed and delivered the Farmers' Loan & Trust Company, being a corporation under the laws of the state of New York, had not, and had not since, complied with the laws of the state of Illinois, which required a deposit with the auditor of public accounts for the benefit of the creditors of said company of the sum of $200,000 in stocks of the United States or municipal bonds of the state of Illinois, or in mortgages on improved and productive real estate of such state, being first liens thereon, and the real estate being worth at least twice the amount loaned thereon; that, at the time of the execution and delivery and acceptance of said trust under said mortgage, the Lake Street Company, the complainant, did not know that the Farmers' Loan & Trust Company had not complied with the laws of the state of Illinois; and that since the acceptance of said trust the Farmers' Loan & Trust Company had been doing business in the state of Illinois, and had appointed one William Burry as its agent to enforce compliance by the Lake Street Elevated Company with the trusts reposed

Page 54

in the Farmers' Loan & Trust Company, under said mortgage or deed of trust, and that said Burry, as such agent, had acted and still was acting by virtue of the authority claimed to be vested in the Farmers' Loan & Trust Company under said mortgage.

This bill further alleged that the Lake Street Elevated Railroad Company had been unable to earn sufficient money in operating its railroad to pay the interest upon the bonded indebtedness secured by the said mortgage or deed of trust; that, notwithstanding such fact, one William Ziegler, of New York city, conspiring and confederating with various persons, and altogether representing 610 bonds of the total issue of 7,574 bonds, made a demand upon the Farmers' Loan & Trust Company and the American Trust & Savings Bank that they proceed to foreclose said mortgage, and take possession under and by virtue of the powers contained in said mortgage and the authority vested in said trustees, or to file a bill to foreclose such mortgage; that the complainant, the Lake Street Elevated Railroad Company, filed on December 30, 1895, a bill in the circuit court of Cook county, Illinois, against said William Ziegler and others, seeking to enjoin them, and each of them, and the Farmers' Loan & Trust Company and the American Trust & Savings Bank, from instituting any proceedings to foreclose said mortgage, and, for reasons set forth, an injunction immediately and without notice was prayed for.

It appears that such an injunction was issued, but that subsequently said cause was, on petition of Ziegler and other bondholders, removed into the circuit court of the United States for the northern district of Illinois.

The bill in the present case proceeded to allege that no other persons than Ziegler and those associated with him as holders of the 610 bonds were asking or demanding of the Farmers' Loan & Trust Company any action or proceeding, but notwithstanding it proposed and would file a bill to foreclose the said mortgage for failure to pay the interest upon the bonded indebtedness; that the holders of 6,574 bonds, issued under said mortgage, had requested the trustees to take no action whatsoever under said mortgage or trust deed with reference to the

Page 55

failure of said company to provide for or pay the interest due July 1, 1895, and January 1, 1896; that the American Trust & Savings Bank, in compliance with said request, declined and refused on January 28, 1896, to join with the Farmers' Loan & Trust Company in any proceedings whatsoever to enforce the provisions or conditions of said mortgage on account of the failure of the company to...

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264 practice notes
  • Tucker v. Specialized Loan Servicing, LLC, Case No. PWG–14–813.
    • United States
    • U.S. District Court — District of Maryland
    • 3 Febrero 2015
    ...(1935) ; Palmer v. Texas, 212 U.S. 118, 129, 29 S.Ct. 230, 53 L.Ed. 435 (1909) ; Farmers' Loan & Trust Co. v. Lake Street Elevated R.R., 177 U.S. 51, 61, 20 S.Ct. 564, 44 L.Ed. 667 (1900) ; see also Sexton v. NDEX West, LLC, 713 F.3d 533, 537 (9th Cir.2013) (“The doctrine of prior exclusive......
  • Brooklyn Trust Co. v. Kelby, No. 163.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • 7 Junio 1943
    ...States v. Bank of New York, 296 U.S. 463, 477, 56 S.Ct. 343, 347, 80 L.Ed. 331; Farmers' Loan & Trust Co. v. Lake St. Elevated R. Co., 177 U. S. 51, 61, 20 S.Ct. 564, 44 L.Ed. 667; Kline v. Burke Construction Co., 260 U. S. 226, 230, 43 S.Ct. 79, 67 L.Ed. 226, 24 A.L.R. 1077; Continental Il......
  • Propper v. Clark, No. 390
    • United States
    • United States Supreme Court
    • 20 Junio 1949
    ...24 A.L.R. 1077; Princess Lida v. Thompson, 305 U.S. 456, 466, 59 S.Ct. 275, 83 L.Ed. 285; and Farmers' Loan, etc., co. v. Lake St. R. Co., 177 U.S. 51, 61, 20 S.Ct. 564, 568, 44 L.Ed. 667. The rule declared by these cases is that when one court has taken possession and control of a res, a s......
  • New Haven Inclusion Cases 8212 917, 920 921, 1038 1057, Nos. 914
    • United States
    • United States Supreme Court
    • 29 Junio 1970
    ...Adelbert College, 208 U.S. 38, 54, 28 S.Ct. 182, 187, 52 L.Ed. 379; Farmers' Loan & Trust Co. of New York v. Lake Street Elevated R. Co., 177 U.S. 51, 61, 20 S.Ct. 564, 568, 44 L.Ed. 667. We recognize that that principle has commonly applied in cases where both courts assert in rem jurisdic......
  • Request a trial to view additional results
264 cases
  • Tucker v. Specialized Loan Servicing, LLC, Case No. PWG–14–813.
    • United States
    • U.S. District Court — District of Maryland
    • 3 Febrero 2015
    ...(1935) ; Palmer v. Texas, 212 U.S. 118, 129, 29 S.Ct. 230, 53 L.Ed. 435 (1909) ; Farmers' Loan & Trust Co. v. Lake Street Elevated R.R., 177 U.S. 51, 61, 20 S.Ct. 564, 44 L.Ed. 667 (1900) ; see also Sexton v. NDEX West, LLC, 713 F.3d 533, 537 (9th Cir.2013) (“The doctrine of prior exclusive......
  • Brooklyn Trust Co. v. Kelby, No. 163.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • 7 Junio 1943
    ...States v. Bank of New York, 296 U.S. 463, 477, 56 S.Ct. 343, 347, 80 L.Ed. 331; Farmers' Loan & Trust Co. v. Lake St. Elevated R. Co., 177 U. S. 51, 61, 20 S.Ct. 564, 44 L.Ed. 667; Kline v. Burke Construction Co., 260 U. S. 226, 230, 43 S.Ct. 79, 67 L.Ed. 226, 24 A.L.R. 1077; Continental Il......
  • Propper v. Clark, No. 390
    • United States
    • United States Supreme Court
    • 20 Junio 1949
    ...24 A.L.R. 1077; Princess Lida v. Thompson, 305 U.S. 456, 466, 59 S.Ct. 275, 83 L.Ed. 285; and Farmers' Loan, etc., co. v. Lake St. R. Co., 177 U.S. 51, 61, 20 S.Ct. 564, 568, 44 L.Ed. 667. The rule declared by these cases is that when one court has taken possession and control of a res, a s......
  • New Haven Inclusion Cases 8212 917, 920 921, 1038 1057, Nos. 914
    • United States
    • United States Supreme Court
    • 29 Junio 1970
    ...Adelbert College, 208 U.S. 38, 54, 28 S.Ct. 182, 187, 52 L.Ed. 379; Farmers' Loan & Trust Co. of New York v. Lake Street Elevated R. Co., 177 U.S. 51, 61, 20 S.Ct. 564, 568, 44 L.Ed. 667. We recognize that that principle has commonly applied in cases where both courts assert in rem jurisdic......
  • Request a trial to view additional results

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