Federal Trust Co. v. East Hartford Fire Dist.

• Decision Date: 03 April 1922
• Docket Number: 234.
• Citation: 283 F. 95
• Parties: FEDERAL TRUST CO. v. EAST HARTFORD FIRE DIST.
• Court: U.S. Court of Appeals — Second Circuit

283 F. 95

FEDERAL TRUST CO. v. EAST HARTFORD FIRE DIST.

No. 234.

United States Court of Appeals, Second Circuit.

April 3, 1922

Charles J. McLaughlin, of Hartford, Conn., and Joseph P. Fagan and Cotter & Fagan, all of Boston, Mass., for plaintiff in error.

Percy S. Bryant and Morris S. Falk, both of Hartford, Conn., for defendant in error.

The defendant fire district is a minor municipal corporation of Connecticut, created in 1889 (10 Sp.Laws Conn.p. 1316). This act of incorporation was amended from time to time, always by 'special laws' duly passed by the Connecticut Legislature, until in 1899 (13 Sp.Laws, p. 492, Sec. 14) the district was given the power and authority to make and maintain waterworks, and to do so by lawfully obtaining 'the same rights, powers, and duties as were conferred and imposed upon the East Hartford Water Company by its charter approved May 10, 1887, and the amendments thereto.'

Defendant thus became entitled to procure by eminent domain the watersheds necessary for its waterworks in like manner as the East Hartford Water Company had been entitled so to do. That water company had, by virtue of certain 'special laws,' 'full power * * * to take water from any brook in (certain enumerated towns including Glastonbury) or from any other source as said company may desire. * * * '

The method of exercising this right of taking water is prescribed by special law (10 Sp.Laws, p. 729, Sec. 8) thus: 'Said corporation (district) shall pay all damages that shall be sustained by any person or persons or corporation in their property or estate by the taking of any real estate or easement, or by the taking the water from any brook,' etc.

The statute then declares that, if the damages shall not be agreed upon, they shall be assessed under the supervision of the superior court, upon an application made to that court either by the condemning corporation or by the person sustaining damages, 'which application shall be accompanied by a summons served upon the owner of the property as in the case of civil process before said court.'

Another proviso of this series of special laws declares: 'Said court may make any order necessary for the protection of the rights of all persons or corporations interested in said property or sustaining such damages: but said property shall not be taken or interfered with by said corporation until the amount of said judgment shall be paid to the person to whom it is due, or deposited for his use with the treasurer of Hartford county. ' Section 10.

By virtue of this conference of the power of eminent domain the fire district in December, 1916, began proceedings in the superior court against the Glastonbury Power Company et al to condemn 'the waters of Cold brook' in the town of Glastonbury. After appeal to the Supreme Court of the state (East Hartford Fire District v. Glastonbury Power Co., 92 Conn. 217, 102 A. 592), the proceeding succeeded, and on December 12, 1918, judgment was entered in said superior court awarding to the Glastonbury Power Company damages for the taking of Cold brook in the sum of $7,500.

In 1904 said power company had duly made a mortgage affecting all its property including the Cold brook lands. Plaintiff, Federal Trust Company, is the mortgagee as trustee for bondholders. The mortgage was duly recorded and was in full force during the whole of the above referred to condemnation proceeding but (as averred in the complaint) plaintiff had 'no notice of said condemnation proceedings, nor was it cited as a party defendant in' the same. The amount of plaintiff's mortgage was $57,000. The complaint does not aver that it had matured when complaint was filed (December, 1920), or that the mortgagor was down to that date in default. But (continues the complaint) 'as such mortgagee plaintiff was entitled to payment of said award to the extent of the amount due upon the mortgage before any sum was paid to the owner of the property. No payment of any amount has been made to the plaintiff on account of said award of damages, although plaintiff requested defendant to pay said sum over to the plaintiff. ' Complaint concludes with a prayer for general damages, viz. $100,000.

To this complaint defendant demurred, assigning for cause of demurrer that at the time of action begun no 'sum of money was due and payable from defendant to plaintiff,' and that it was not alleged that 'defendant is indebted to plaintiff.' This in substance was a general demurrer.

At all times during the pendency of the condemnation proceeding above referred to, and since 1895, there had been and was in force in Connecticut a general statute (Gen. Stat. Conn. Revision of 1918, Sec. 5192), reading as follows: 'Whenever any real estate, or any interest in real estate, is taken by right of eminent domain under any statute, notice shall be given to all persons appearing of record to hold any mortgage, lien or other incumbrance on the property to be taken, and the amount due to such mortgagee, lienor or other incumbrancer, not exceeding the amount to be paid for the property taken, shall be paid to them in the order of their respective rights before any sum is paid to the owners of the property.'

The trial court sustained the demurrer and gave judgment absolute for defendant, whereupon plaintiff brought this writ.

Before HOUGH, MANTON, and MAYER, Circuit Judges.

HOUGH Circuit Judge (after stating the facts as above).

Plaintiff certainly had an interest in the lands condemned, and its action is for damages to that interest. It rests on the alleged unlawful act of defendant in failing to give notice or opportunity to assert its right to the...