Grant v. East & West R. Co.

• Citation: 50 F. 795
• Decision Date: 30 May 1892
• Docket Number: 45.
• Parties: GRANT et al. v. EAST & WEST R. CO. et al.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

50 F. 795

GRANT et al. v. EAST & WEST R. CO. et al.

No. 45.

United States Court of Appeals, Fifth Circuit.

May 30, 1892

Wager Swayne, for the motion.

A. C King and J. J. Spalding, opposed.

Before McCORMICK, Circuit Judge, and LOCKE, District Judge.

McCORMICK Circuit Judge.

The American Loan & Trust Company of New York, in June, 1888 filed its bill to foreclose the consolidated first mortgage of the East & West Railroad Company of Alabama for the equal benefit of the holders of the bonds secured by said mortgage. To this bill the railroad company and James W. Schley and Joel Brown were made defendants. On the 26th of July, 1888 Grant Bros. had leave to file an auxiliary and dependent bill against the complainant in the original bill and the railroad and William C. Browning, Edward F. Browning, Eugene Kelly John Byrne, John Hull Browning, and Amos G. West. This auxiliary bill was presented in behalf of complainants therein, and all other bondholders similarly situated, and charged that complainants and others were the innocent purchasers for value before maturity, and without notice of any defect in said bonds, of a considerable number thereof, and that 966 bonds, in which the defendants named in their bill claimed some interest or ownership, were invalid and illegal, and not entitled to benefit under said first consolidated mortgage. The defendants to the auxiliary bill answered individually, and the whole suit proceeded in the usual manner, and came on to be heard on the 22d of October, 1891, 'upon all of the proceedings and pleadings, including the original bill of foreclosure, and the auxiliary and dependent bill of Grant Brothers, and the intervention of James W. Schley, and the several answers thereto, and upon the proofs taken in said several causes, and was argued by counsel. ' And on the 13th of January, 1892, the decree of the circuit court thereon was filed therein, which, after the usual findings, covering every material issue made by the parties, concluded in these words:

'It is now ordered, adjudged, and decreed that the auxiliary and dependent bill of James and Frederick Grant be, and the same is hereby, dismissed, with costs; that the intervention of James W. Schley be, and the same, is, maintained, so far as to recognize the validity of the judgment obtained by him in the circuit court of Cherokee county, in the state of Alabama, as a valid and binding judgment, with a lien upon the property of the said railroad company, but subject and inferior to the lien given by the first consolidated mortgage of the East & West Railroad Company of Alabama, herein declared foreclosed; and as to all other matters said claims and interventions of James W. Schley be, and the same are hereby, dismissed. And it is now further ordered, adjudged, and decreed that this cause be referred to the special master pro hac vice, F. S. Ferguson, to ascertain and schedule the mortgaged premises now in the hands of the receiver, under the orders of this court, and to report and determine with all convenient speed the validity and the amount of the liens on the mortgaged premises, and their relative priority, but in marshaling all conflicting claims to said bonds the said special master shall proceed according to this decree and in conformity therewith. And let it likewise be referred to the said master to take an account of what is due to the complainant, or or to those for whom complainant claims, for principal and interest on the said mortgage and bonds so found outstanding, and entitled to the benefits of the lien of the said mortgage, and for complainant's disbursements and allowances to counsel for the mortgage, and costs to be taxed. And said master shall, in furtherance of this end, cause advertisements to be published in two newspapers, published one in Alabama and the other in Georgia, which he may think most fit, to the effect that such lien claimants as have hitherto failed to do so shall come in and file their interventions within thirty days thereafter, or, in default thereof, they will be excluded from the benefits of any decree in this suit, and from participation in the proceeds of any sale. And upon the coming in and confirmation of said report, let a decree nisi be entered that the defendant the East & West Railroad Company of Alabama have thirty days thereafter in which to pay into the registry of the court, to the credit of the cause, the amount so found due for principal and interest on the said mortgage; but, in default of such defendant's paying what shall

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