Fidelity Insurance, Trust & Safe Deposit Co. v. Roanoke Iron Co.

• Citation: 84 F. 752
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)
• Decision Date: 22 July 1897
• Parties: FIDELITY INSURANCE, TRUST & SAFE DEPOSIT CO. v. ROANOKE IRON CO.

84 F. 752

FIDELITY INSURANCE, TRUST & SAFE DEPOSIT CO. v. ROANOKE IRON CO.

United States Circuit Court, W.D. Virginia.

July 22, 1897

Watts Robertson & Robertson, for purchaser.

Griffin & Glasgow, for certain creditors of defendant company.

PAUL District Judge.

Acting under a decree of sale entered in this cause on the 27th day of February, 1897, and a supplemental decree of April 14 1897, the special commissioners appointed to sell the property of the defendant company sold the same on the 28th day of June, 1897, and filed their report on the 30th of the same month. On the 8th day of July, 1897, on motion of Robert E. Tod, the purchaser, a decree nisi was entered on said report as follows:

'And now, this 8th day of July, 1897, at the city of Lynchburg this cause came on to be heard upon the papers formerly read, upon the report of Special Commissioners David W. Flickwir and H. Peyton Gray, of the sale of the plant of the Roanoke Iron Company, as directed by the decree entered herein on the 27th day of February, 1897, which said report was filed on the 30th day of June, 1897, and on motion of Robert E. Tod, by counsel, the purchaser of said property, to confirm the said sale. Thereupon the court doth adjudge, order, and decree that the sale of said property, as set out in the aforesaid report of Special Commissioners David W. Flickwir and H. Peyton Gray, filed herein on the 30th day of June, 1897, be, and the same is hereby, confirmed, unless good cause be shown why the same should not be confirmed on or before the 20th day of July, 1897; and the court doth fix the 20th day of July, 1897, as the time, and the United States court room at Harrisonburg, Virginia, as the place, for the consideration of any objection that may be made to the confirmation of said sale, within the time above specified.'

Exceptions were filed to the report of sale by Joseph L. Buery and others, creditors of said Roanoke Iron Company. The court will consider these objections to a confirmation of the sale in the order in which the exceptions are taken: First. 'Because the sale was made when a cloud rested upon the title to the property sold, created by a suit then pending in the supreme court of appeals of Virginia, in which a claim to the land on which said plant is located, adverse to said company, was made and undetermined. ' This objection to a sale of the property was raised before the decree of sale was entered, but the court did not think the objection would justify it in delaying a sale which was being actively urged by other creditors. This court had no control over the suit pending in a wholly different jurisdiction. It could take no step to hasten a decision of the questions involved in that case, and it might be years before they were settled; and, when settled, the court had no assurance that the conclusions would be favorable to the interests of the creditors in this cause. In the meantime the property was lying idle, deteriorating in value, and requiring constant expenditures to preserve it from damage and waste. The court, in the exercise of its best judgment in the premises, thought the interests of the creditors in this cause would be best conserved by a sale, and so decreed. If the court erred, its action is subject to appeal. But the court does not think this objection can be properly considered by it after the decree of sale has been carried into effect, and the only question before the court is the confirmation of the sale.

Second. 'Because the offer for said property by Robert E. Tod, whose bid is reported to the court, is a grossly inadequate price for the same. ' In support of this exception, the exceptants file the affidavit of one of their number, Joseph L. Buery, which is as follows:

'This day personally appeared before me, A. K. Fletcher, clerk of the circuit court of the United States for the Western district of Virginia, J. L. Buery, who made oath that he is a creditor of the Roanoke Iron Company, holding the bonds of said company to the amount of $12,000; that he is also a stockholder in the Mill Creek Coal & Coke Company, which is the owner of the bonds of the said Roanoke Iron Company to the amount of $24,000; that he is well acquainted with the property of the said Roanoke Iron Company, and that it appears by exhibit filed by the receiver in this cause that the plant of said company was valued at the sum of $534,546.21. This includes the real estate, furnace plant, rolling-mill plant, shops, stables, etc. Affiant further says that said plant was reported by said receiver as in good condition, except the lining of the stack of the furnace (which has since that time been relined and put in good condition), so that the whole property is now completely repaired, and in good condition; that the sale reported as having been made by the commissioners in this cause was made at a time when the iron industry had reached a condition of depression and uncertainty such as affiant believes has never before existed, and which affiant does not believe to be permanent. Affiant further says that before the biddings were opened at said sale it was publicly announced by the solicitor for the commissioners of sale that a suit was pending in which a claim was made to the land on which the plant is located, or a large part thereof; that said suit was decided adversely to said claimants in the lower court, and that an appeal had been taken to the supreme court of the state. This announcement was followed by a statement made by an attorney for said claimants that said appeal was pending in said court of appeals, and would probably be heard at the January term of said court. Affiant further says that the price obtained for said property is grossly inadequate, and, if the sale is confirmed at that price, affiant and other bondholders of said company will realize nothing from said sale.'

In support of the motion for confirmation the purchaser files the following affidavits:

'State of Pennsylvania, County of Allegheny-- ss.: Before me, a notary public in and for said county, personally appeared Minor Scovel, who, being duly sworn according to law, says that he is a resident of the city of Pittsburg, and a mechanical engineer by profession; that in the practice of his profession he has been engaged for a number of years in the repairing and constructing of blast furnaces and rolling mills, and is therefore thoroughly familiar with the construction, cost, and operation of the same; that in his opinion the improvements in manufacturing and construction, and the correspondingly largely increased output, has resulted injuriously to many establishments erected before said changes, and that

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