Fortney v. Carter

• Decision Date: 08 March 1913
• Docket Number: 1,112.
• Citation: Fortney v. Carter, 203 F. 454 (4th Cir. 1913)
• Parties: FORTNEY et al. v. CARTER et al.
• Court: U.S. Court of Appeals — Fourth Circuit

203 F. 454

FORTNEY et al. v. CARTER et al.

No. 1,112.

United States Court of Appeals, Fourth Circuit.

March 8, 1913

Bill by Merville H. Carter and others against Osborne Fortney and others.From a decree perpetuating an injunction, defendants appeal.Affirmed on opinion of Dayton, District Judge, which was as follows:

In the first opinion filed by me in this cause, ruling upon the demurrer, I considered the questions of the bondholders' right, independent of the company, to ask for and secure an injunction, and held them to be entitled, and that neither the company nor the mortgage trustee were necessary parties.I adhere to these rulings for the reasons stated in that opinion.It seems clear to me that the verified copy of the mortgage, which I have permitted to be filed, clearly shows the existence of the mortgage lien and that the allegations of the bill that the plaintiffs are holders of bonds of the value of $24,000 under this mortgage is not denied in the answer in such way as to demand affirmative proof; that the value of these bonds, as shown by the evidence of Atkinson, was almost wholly dependent upon the ability of this coal company to operate its mine, whereby revenue could be derived with which to pay interest and principal of these bonds in accord with the provisions of the mortgage contract, and that the other source of revenue, that from the rent of mine houses, was small and immaterial.

I do not think, under the manifest agreement of counsel, whereby the taking of the testimony in this cause was extended over a period far in excess of that fixed by the equity rules, that objection can be made that this deposition of Atkinson was taken too late.Fairness requires, where counsel so agree to take testimony by consent regardless of the equity rule as to time, that the court should apply such consent agreement as relating to all the testimony so taken.

It would seem clear, therefore, that the technical amount in controversy here necessary to confer jurisdiction is the $24,000 of value of these bonds held by plaintiffs, which is being jeopardized by the acts of defendants in preventing the coal company from meeting the payment of interest and principal in accord with the mortgage contract relating thereto.Taking up the several questions discussed in the able and exhaustive brief of counsel filed in support of the motion to dissolve this injunction, I think it is clear (a) that the value of the coal company's property does depend upon its substantially continuous and uninterrupted operation of its coal plant, so far as its ability to comply with its mortgage contract with plaintiffs and its other bondholders is concerned, and that this is shown by the undisputed testimony of Atkinson; (b) that the pleadings and proofs in the case are sufficient to show plaintiffs to be lien creditors of this company; (c) that such pleadings and proofs are ample to show that irreparable injury to plaintiffs was threatened by the acts imputed to defendants; (d) that such acts did prevent the coal company from operating its plant in the usual manner and injunction was necessary; ...