Harris v. Youngstown Bridge Co.

• Citation: 90 F. 322
• Decision Date: 09 November 1898
• Docket Number: 519.,503-506
• Parties: HARRIS v. YOUNGSTOWN BRIDGE CO. et al. LOUISVILLE TRUST CO. v. SAME. COLUMBIA FINANCE & TRUST CO. v. SAME. GAULBERT et al. v. SAME. CENTRAL THOMSON-HOUSTON CO. v. SAME.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

90 F. 322

HARRIS v. YOUNGSTOWN BRIDGE CO. et al. LOUISVILLE TRUST CO. v. SAME. COLUMBIA FINANCE & TRUST CO. v. SAME. GAULBERT et al. v. SAME. CENTRAL THOMSON-HOUSTON CO. v. SAME.

Nos. 503-506, 519.

United States Court of Appeals, Sixth Circuit.

November 9, 1898

[Copyrighted Material Omitted]

Judson Harmon and Thos. W. Bullitt, for Theo. Harris.

St John Boyle, for Louisville Trust Co.

W. O Harris, for Kentucky Nat. Bank.

A. P. Humphrey, for Youngstown Bridge Co.

E. T. Trabue, for Columbia Finance & Trust Co.

W. M. Bullitt, for Gaulbert and others.

Helm Bruce, for Central Trust Co.

Before TAFT and LURTON, Circuit Judges, and CLARK, District Judge.

TAFT Circuit Judge.

This action in equity was begun in the circuit court for the district of Kentucky by the complainant the Youngstown Bridge Company to foreclose a mechanic's lien asserted by it upon the bridge and approaches of the Kentucky & Indiana Bridge Company. The parties defendant to the bill included the Kentucky & Indiana Bridge Company; John H. Stotsonberg and Alexander Dowling, trustees under a first mortgage given by the company upon the bridge; the Louisville Trust Comapny, trustee under a second mortgage; Theodore Harris, trustee under a terminal deed of trust; and the Columbia Finance & Trust Company, claiming a lien upon a part of the bridge under another deed of trust. J. W. Gaulbert and others by intervening petition claimed a lien under the same deed of trust as that upon which the claim of the Columbia Finance & Trust Company was founded; and the Central Thomson-Houston Company, by intervening petition, claimed a mechanic's lien for the furnishing of an electric railway plant to the bridge company. The decree for sale by the circuit court directed the sale of the bridge and its approaches as an entirety, and marshaled the liens. This appeal questions the action of the circuit court in its adjustment of the priorities of the various liens, in its denying the existence of one of the asserted liens, and in its ordering the sale of the bridge and its approaches as an entirety.

The Kentucky & Indiana Bridge Company was the result of a consolidation of an Indiana company and a Kentucky company bearing the same name. In 1881 the consolidated and the two constituent companies issued a mortgage upon the bridge and its approaches, and upon all its after-acquired property, to secure $1,000,000 of bonds of the consolidated company. The bridge was built to connect the cities of New Albany, Ind., and Louisville, Ky., and was intended for steam-railway, street-railway, and wagon transportation, and foot passengers. The original construction included an approach on the Kentucky side, built of wood, and a railway extending from the south end of the bridge, west of Louisville, to Fourteenth street, in that city, where a connection was made with the line of the Short-Route Transfer Railway Company. The bridge as thus constructed is known as 'the bridge and the main line. ' In 1886, for the purpose of securing the Ohio & Mississippi Railway Company as a tenant, the bridge company agreed to connect the bridge with other railroads in the city of Louisville, and to reconstruct the wooden approach by a steel structure. The company had no funds, but succeeded in procuring these additions and improvements to the bridge and railway by two trust deeds hereafter described. Under a so-called 'terminal trust deed' to Theodore Harris, trustee, land was purchased, and a track was built several miles in length, connecting the bridge with the Chesapeake & Ohio Southwestern and the Louisville & Nashville Railroads, and a freight yard was established on the line. Another track was built, connecting the main line of the bridge with the Monon and Ohio & Mississippi Railway terminals. Under this deed an indebtedness of $400,000, evidenced by negotiable bonds, was contracted, for which a lien prior to the first mortgage bonds is claimed upon the railway, the freight-yard structures, and the approaches built in accordance with its provisions. Under the trust contract with the Columbia Finance & Trust Company, land was bought, and a new steel approach substituted for the old wooden one, in the main line. In the construction of this steel approach the debt was contracted for which the Youngstown Bridge Company claims a mechanic's lien. The claim of the Columbia Finance & Trust Company arises out of the money advanced to buy the land for this approach, and a lien upon the land bought is asserted, prior in right to that of the first mortgage upon the bridge. The property has been ordered to be sold, subject to the lien of the first mortgage, but the trustees under that mortgage were made parties in order to be heard on the question of priority between them and the trustee under the terminal trust deed.

The issues which arise for decision are: (1) Is the lien of Theodore Harris, trustee under the terminal trust mortgage upon the new approaches and connections described therein, prior in right to that which the first mortgage bondholders have upon the same property by virtue of the after-acquired property clause in their mortgage? (2) Is the lien of the Columbia Finance & Trust Company upon the land and structure upon which the new steel approach in the main line was built prior in right to that of the first mortgage? (3) Is the lien of J. W. Gaulbert and others upon the steel approach prior to the first mortgage? (4) Is the lien of the Youngstown Bridge Company prior in right to that of Gaulbert and other? (5) Has the Thomson-Houston Company any mechanic's lien whatever upon the property of the bridge? (6) Should the circuit court have ordered the bridge and all the approaches and terminals sold as an entirety? We shall consider these questions in their order.

1. The first mortgage conveyed the bridge of the company to Dowling and Stotsonberg, trustees, by the following description:

'Its lands, bridge piers, abutments, toll houses, approaches, and all the property, real, personal, and mixed, wherever situated, and all its rights, privileges, franchises, immunities, owned or possessed, or which may be hereafter acquired, by it, * * * and which may be acquired by further legislation, or in any manner whatever.'

The bonds issued under this mortgage had been sold and were all outstanding prior to October, 1886. The bridge and its main line were completed in the summer of 1886. The railway and approaches acquired under the terminal trust deed for the purpose of complying with the Ohio & Mississippi Railway contract were secured and constructed in the fall of 1886 and the spring of 1887. This was done in accordance with a contract between the bridge company and the Southwestern Contract & Construction Company, in which the contract company undertook, with the bridge company, by purchase or otherwise: To acquire the right of way for a connection with the Chesapeake, Ohio & Southwestern Railway and the Louisville & Nashville Railroad at points south of Maple street; the precise location within the limits named to be fixed by the bridge company. To acquire in fee, for the use and benefit of the bridge company, such amount of land as might be esteemed by the bridge company necessary for its yards, yarding, machine shops, repair shops, roundhouses, station buildings, and other terminal facilities, not exceeding 30 acres; the same to be upon the line of railroad already provided for, and upon such points of the line as the bridge company might direct. To grade the roadway, and construct thereon a double-track railroad, making its connection with said railroads at such points, and of such lengths, as might be designated by the bridge company, not exceeding in the aggregate one mile in length; the entire work to be done in accordance with the specifications mentioned in the contract. To acquire the right of way for a double-track railroad from a point between Fifteenth and Seventeenth streets, on the line of said bridge company's existing railway, in the city of Louisville, to a connection of the tracks of the Louisville, New Albany & Chicago Railroad Company and the Ohio & Mississippi Railroad Company, on or near Fourteenth street, and south of Portland avenue, together with such switches as might be required by the bridge company, and to construct thereon a double-track railroad. The entire construction was to be in accordance with the plans and under the supervision of the chief engineer of said bridge company. The bridge company, on its part, agreed to permit the use of its name for the condemnation of any property necessary to the acquisition of such rights of way. The contract company agreed to pay for all the necessary rights of way and land condemned or purchased, and all labor and material, and to cause the same to be conveyed to the bridge company free from lien or claim thereon by any person, excepting only the lien of the terminal deed of trust, hereafter described; and in consideration of the promise the bridge company bound itself to deliver to the contract company, immediately upon the execution of the contract, its negotiable coupon bonds, 400 in number, aggregating in amount $400,000.

The contract provided that the payment of the bonds should be secured by a terminal deed of trust, in which the lands rights of way, buildings, and all the appurtenances thereto, should be conveyed to Theodore Harris, as trustee, and should be further secured by a similar deed of trust to be executed by the bridge company, conveying by mortgage to Theodore Harris, trustee, the main-line approach of the bridge company, and all other branch lines extending therefrom, to connect with other railroads or depots in the city of Louisville, and all terminal facilities connected therewith. The...