In re Michigan Cent. R. Co.

• Decision Date: 20 July 1903
• Docket Number: 1,171.
• Citation: 124 F. 727
• Parties: In re MICHIGAN CENT. R. CO.
• Court: U.S. Court of Appeals — Sixth Circuit

124 F. 727

In re MICHIGAN CENT. R. CO.

No. 1,171.

United States Court of Appeals, Sixth Circuit.

July 20, 1903

Petition for Writ of Mandamus.

This is an application for a mandamus to the Circuit Court of the United States for the Eastern District of Michigan, to compel the allowance of an appeal from its decree. The facts necessary to be stated are as follows:

In 1881 the Farmers' Loan & Trust Company, as trustee under a mortgage made to secure bonds issued by the Detroit & Bay City Railway Company, obtained a decree for the sale of the mortgaged railroad for the satisfaction of the bonds so secured. One Addison Mandell was appointed master to sell and he did sell, the said railroad, and, by direction of the court, paid the proceeds of sale to the complainant, the Farmers' Loan & Trust Company, to be paid by it in payment and satisfaction of the bonds. The road was purchased for the Michigan Central Railroad Company, though that fact does not seem to have appeared on the record of the foreclosure proceedings. Certain of the bonds so secured did not mature until 1902 and 1903, and were guarantied, both as to principal and interest, by the Michigan Central Railroad Company. Holders of such bonds to the amount of $424,000 refused to surrender their bonds to the said trust company for payment, preferring to hold onto the investment. In 1882 the said Michigan Central Railroad Company filed in the foreclosure case, the title of which was 'The Farmers Loan & Trust Company et al., Trustees, v. The Detroit & Bay City Railway Company,' an intervening petition setting forth the situation in respect of the bonds which the holders refused to surrender for payment, and praying that the Farmers' Loan & Trust Company might be ordered to pay to it the sum of $424,000, so held by it for the ultimate redemption of the bonds maturing in 1902 and 1903, and offering to secure same. An order to show cause was made, and the trust company appeared and demurred. The demurrer was overruled, and an order made that the said trust company repay to the said master, Addison Mandell, the said sum of $424,000, and take his receipt for same. Payment was accordingly made, and deposited to the credit of the court in the National Bank of Commerce in New York, a designated depository of the United States in New York City, which was directed to hold same subject to the further order of the court. The master accordingly took a certificate of deposit and reported his action accordingly. Thereupon the Michigan Central Railroad Company filed a supplemental petition setting out the above facts, and praying that said money be paid over to it upon its giving security to repay same to the said master or into the registry of the court when so ordered. Thereupon an order was made directing the master to pay to said railroad the said sum upon the execution of a satisfactory bond in the sum of $800,000, conditioned 'to pay to the holders of said 424 Detroit & Bay City Railway Company bonds the interest thereon as it becomes due, and the principal thereof which the said court may direct, into the registry of said court at any time the said court may order or direct, and shall also deliver to the said master in chancery, in pledge for collateral security to the said bond the amount of $424,000 in registered bonds executed by the said company of a series of bonds, * * * and that the last-described bonds be registered in the name of the clerk of the Circuit Court of the United States for the Eastern District of Michigan, transferable only upon the order of the court, and that said $800,000 bond and said last-described bonds be deposited in a safe of the Trust, Security & Safe Deposit Company of Detroit, Michigan, under the control of and only to be opened upon the order of, this court, and that the use of said safe be furnished at the expense of said Michigan Central Railroad Company. ' In accordance with this order a bond conditioned as provided, and running to W. D. Harsha and his successor as clerk, etc., was made; and the collateral bonds were also duly registered in the name of said clerk, and the original and collateral bonds then delivered to said Addison Mandell, and were deposited in said safe, as required by the order, and the key delivered to the said clerk. In 1892 the Michigan Central Railroad Company paid off 266 bonds which matured in that year, as it was required to do, and then filed its petition, showing such payment, and exhibiting the canceled bonds, and prayed that its own bonds, held as collateral, to the amount of $266,000, be released and delivered to it, which, upon order of the court, was done.

Thereupon W. D. Harsha, the clerk of said court, mentioned above, filed his petition, entitled as of the original foreclosure case, reciting the above facts, and, among other things, stating (1) that he is the clerk of said court, and has been continuously since January 6, 1811; (2) that since December 11, 1882, the said $800,000 bond and the said $424,000 Michigan Central Railroad Company bonds collateral thereto were continuously in the care, custody, and control of petitioner as clerk; (3) that by order of the court he had opened the safe deposit box, and, after proper identification of the 266 bonds presented by the railroad company, he had 'assigned and delivered to the said Michigan Central Railroad Company $266,000 of the registered bonds deposited December 11, 1882,' and had reported his action to the court.

The said petitioner then concluded as follows:

'That your petitioner claims compensation for the receiving, keeping, and paying out of the $424,000 aforesaid paid back to the master, Addison Mandell, by the Farmers' Loan & Trust Company, and subsequently deposited in a designated United States depositary subject to the order of the court, which was subsequently withdrawn from the court and paid to the Michigan Central Railroad Company as above set forth; that he claims compensation, also, for other special services as clerk in identifying, canceling, transferring, and assigning said bonds, and for clerk's fees, as follows: One (1) per cent. on $266,000 . . . . . . . . . . $2,660 00 For special services in examining, identifying, checking, canceling, and assigning bonds . . . . . . 50 00 For other services as clerk above referred to, for filing papers and entering orders . . . . . . . . . . 85

$2,710 85

'That your petitioner is chargeable as clerk with the above-mentioned fees, and is accountable for the same to the United States.

'Therefore, your petitioner prays that the Michigan Central Railroad Company be directed to show cause on Monday, November 3, 1902, why it should not forthwith pay to your petitioner the sum of $2,710.85 for services as above set forth, together with costs of this proceeding.'

The Michigan Central Railroad Company appeared and demurred to so much of the petition as related to the claim for $2,600 for 1 per cent. commission upon $266,000, the items of $50 and 85 cents, respectively, being admitted. This demurrer was overruled, and an order in these words entered:

'The Farmers Loan & Trust Company, James H. Blake, and Charles Merriam v. The Detroit & Bay City Railway Co.

'In the Matter of the Petition of W. S. Harsha, Clerk, etc.

'Upon the petition of Walter S. Harsha, Clerk, for compensation from the Michigan Central Railroad Company. Walter S. Harsha, the clerk of this court, having heretofore filed his petition for compensation from the Michigan Central Railroad Company, and the said Michigan Central Railroad Company having filed its demurrer to said petition on the 24th inst., and the matter having been argued and submitted, after mature deliberation thereon said demurrer is by the court now here overruled; and it is ordered, adjudged, and decreed that the said petitioner do recover against the said Michigan Central Railroad Company for the services mentioned in said petition the full sum of two thousand seven hundred ten and 85/100 ($2,710.85) dollars, as prayed, and that said petitioner have execution therefor.'

A petition praying for an appeal was thereupon filed by the said railroad company. Upon this the following indorsement was made: 'The foregoing petition on appeal is denied, and the claim therein made is disallowed, on the ground that no appeal lies from an order or decree allowing costs only. Henry H. Swan, District Judge Presiding. ' Thereupon this application for a mandamus to compel the allowance of the appeal so prayed and denied was made, and a rule made to show cause entered at a former day of this term. To this a full answer has been filed, setting out more fully the proceedings in the old foreclosure suit, and somewhat broadening the grounds upon which the appeal was denied.

George E. Tegart, for petitioner.

Walter S. Harsha, in pro. per.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

LURTON Circuit Judge, after making the foregoing statement of the case, .

The appeal in this case should have been allowed. It may be that the Michigan Central Railroad Company, was not originally a party to the foreclosure suit of the Farmers' Loan &amp Trust Company against the Detroit & Bay City Railroad Company. That it subsequently became a party by intervention for the purpose of obtaining relief in respect of a part of the purchase price of the railroad sold under the decree in that cause is undeniable. Under that intervention the petitioner made the bond and gave the collateral security out of which has grown the clerk's claim for the compensation adjudged by the decree complained of. The proceeding thus grafted upon the old foreclosure suit constituted a properly related ancillary suit, the parties to which were the petitioner and the Farmers' Loan & Trust Company. In the...