Hassall v. Wilcox

• Decision Date: 22 April 1889
• Parties: HASSALL v. WILCOX
• Court: U.S. Supreme Court

130 U.S. 493

9 S.Ct. 590

32 L.Ed. 1001

HASSALL v. WILCOX.

April 22, 1889.

Silas W. Pettit, for appellant.

W. Hallett Phillips, for appellee.

BLATCHFORD, J.

On the 18th of February, 1879, an act was passed by the state of Texas, (Gen. Laws 1879, c. 12,) entitled 'An act to protect mechanics, laborers, and operatives on railroads against the failure of owners, contractors, and subcontractors or agents to pay their wages when due, and provide a lien for such wages,' which provided as follows: 'Section 1. Be it enacted by the legislature of the state of Texas, that all mechanics, laborers, and operatives who may have performed labor in the construction or repair of any railroad, locomotive, car, or other equipment to a railroad, or who may have performed labor in the operating of a railroad and to whom wages are due or owing, shall hereafter have a lien prior to all others upon such railroad and its equipment for such wages as are unpaid. Sec. 2. In all suits for wages due by a railroad company for such labor as heretofore mentioned, upon proof being satisfactorily made that such labor had been performed, either at the instance of said company, a contractor, or subcontractor, or agent of said company, and that such wages are due, and the lien given by this act is sought to be enforced, it shall be the duty of the court having jurisdiction to try the same to render judgment for the amount of wages found to be due, and to adjudge and order said railroad and equipments, or so much thereof as may be necessary, to be sold to satisfy said judgment. In all suits of this kind it shall not be necessary for the plaintiff to make other lienholders defendants thereto, but such lienholders may intervene and become parties thereto, and have their respective rights adjusted and determined by the court. Sec. 3. Suits by mechanics, laborers, and operatives, for their wages due by railroad companies, may be instituted and prosecuted in any county in this state where such labor was performed, or in which the cause of action or part thereof accrued, or in the county in which the principal office of such railroad company is situated, and in all such suits service of process may be made in the manner now required by law. Sec. 4. The lien created by this act shall cease to be operative in twelve months after the creation of the lien, if no step be sooner taken to enforce it.'

On the 15th of May, 1882, the Rio Grande & Pecos Railway Company, a Texas corporation, made a mortgage to the Mercantile Trust Company of the state of New York, a New York corporation, covering all the property, real and personal, of the Texas corporation, including its franchises, lands, railways, and other property, to secure $600,000 of coupon bonds issued by it, dated June 1, 1882, payable in 30 years, and bearing semiannual annual interest at the rate of 6 per cent. per annum. On or prior to the 27th of March, 1884, A. W. Wilcox pre- sented a petition to the district court of the county of Webb, in the state of Texas, subscribed and sworn to by him before the clerk of that court, in the words following: 'The State of Texas, County of Webb. To the Hon. the District Court of Webb County: The petition of A. W. Wilcox, who resides in the county of Webb and state of Texas, complaining of the Rio Grande & Pecos R. R. Co., a corporation duly incorporated under the laws of the state of Texas, and operating its lines through the county of Webb, where it has its principal offices, represents that heretofore, to-wit, on the 12th day of January, 1884, the said defendant, in consideration of the payment of claims for labor on said defendant's R. R., executed and delivered to your petitioner a certain promissory note (see note) for the sum of fifty-five hundred and twenty-six 78-100 dollars, with interest, 10 per cent., whereby defendant promised and became liable to pay your petitioner the said note, with interest, according to the tenor thereof. Your petitioner represents that he is the owner and holder of said note, and that defendant has failed and refused to pay the said note, though thereto requested, to petitioner's damage. Wherefore he prays for judgment for his debt and interest, and damages, and foreclosure of his lien on defendant's railroad and equipments.' The promissory note referred to in said petition was as follows: 'Laredo, Texas, January 12th, 1884. The Rio Grande and Pecos Railway Company, for value received, hereby promises to pay A. W. Wilcox, or bearer, on demand, the sum of fifty-five hundred and twenty-six 78-100 dollars for services, and for amounts advanced on claims for labor performed in the construction and maintenance of the Rio Grande and Pecos Railroad, with interest at ten per cent. per annum until paid, and upon default in payment A. S. McLane is hereby authorized, in the name of the said Rio Grande and Pecos Railroad Company, to confess judgment in any court of competent jurisdiction, hereby waiving citation and service thereof. THE RIO GRANDE AND PECOS RAILWAY COMPANY. By A. C. HUNT, The President. [Corporate Seal of The Rio Grande and Pecos Railway Company.]'

On the 27th of March, 1884, the district court rendered the following judgment: 'A. W. Wilcox vs. The Rio Grande & Pecos Ry. Co. (435.) This day came plaintiff, and the defendant, by attorney in fact, A. S. McLane, comes and says that he cannot deny the action of the said A. W. Wilcox, and that he is justly indebted to plaintiff in the sum of fifty-five hundred and twenty-six and 78-100 dollars, with ten per cent. interest thereon from the 12th day of January, 1884, and it appearing to the court that a sufficient power of attorney has been filed in this cause authorizing A. S. McLane, in default of payment, to confess judgment before any court of competent jurisdiction, and waiving citation and service, it is therefore ordered, adjudged, and decreed that the plaintiff, A. W. Wilcox, have and recover of the defendant, the Rio Grande & Pecos Railroad Company, the sum of fifty-five hundred and twenty-six 78-100 dollars, with ten per cent. interest thereon from the 12th day of January, 1884, for which execution may issue. It is further ordered by the court that the plaintiff have a lien on the said Rio Grande & Pecos Railroad Company and its equipments to secure the payment of this judgment, and that said railroad and its equipments, or so much thereof as may be necessary, be sold to satisfy this judgment.'

On the 14th of April, 1884, C. B. Wright, a citizen of Pennsylvania and a holder of $121,000 of the bonds, the interest on which, due December 1, 1883, had not been paid, filed a bill in equity in the circuit court of the United States for the Western district of Texas, against the railway company and the Mercantile Trust Company, setting forth that the railway company was the owner of valuable coal lands in the county of Webb, and had recently constructed a railroad from Santo Tomas to Laredo; that the business of the railway was that of a railway and transportation company, and of a miner of coal; that recently there had been expended a large amount of money in opening the coal-beds, and erecting appliances for mining the coal and transporting it to market; that the principal business of the railroad was the transportation of the coal thus mined; that the value of the assets of the company consisted largely in the fact that the coal-mines and the railroad were owned by the same corporation; and that any separation of the two properties would be disastrous to the creditors of the company, and would lessen materially the aggregate value of the two properties. The bill then set forth the making of the bonds and the mortgage, and the interest of the plaintiff in the bonds; that the company had recently incurred a debt of between $20,000 and $40,000, in constructing and equipping the railroad; that, under the laws of Texas, such debt was entitled to a first lien on the road and its franchises and property, in preference to the first mortgage bondholders, for a period of 12 months after its completion; that, long before the expiration of 12 months from such completion, suits were brought upon many, if not upon all, 'of the labor and material claims above mentioned,' and judgment in some instances had been had thereon, on...