Merriam v. St. Louis, C. G. & Ft. S. Ry. Co.

• Decision Date: 23 June 1896
• Citation: 136 Mo. 145,36 S.W. 630
• Court: Missouri Supreme Court
• Parties: MERRIAM v. ST. LOUIS, C. G. & FT. S. RY. CO. et al.

36 S.W. 630

136 Mo. 145

MERRIAM v. ST. LOUIS, C. G. & FT. S. RY. CO. et al.

Supreme Court of Missouri.

June 23, 1896.

APPEALABLE ORDERS — RAILROAD COMPANIES — RECEIVERS — APPOINTMENT.

1. Under Act April 11, 1895, authorizing appeals from orders refusing to revoke or change an interlocutory order appointing a receiver, on appeal from an order refusing to revoke the appointment of a receiver the court is only restricted in its review to the record brought up for review.

2. The insolvency of a railroad company, and the default in the payment of interest on its mortgage bonds, do not, of themselves, authorize the appointment of a receiver for it without notice.

3. At the instance of a holder of railroad bonds secured by divisional mortgage on one-fourth of the mileage of the road, the appointment of a receiver for the whole road is unauthorized against the objection of persons holding mortgage liens on the other three-fourths of the road.

4. The holder of railroad bonds secured by a divisional mortgage on one-fourth of the mileage of the railroad filed a bill for the appointment of a receiver for the whole road. Subsequently the order appointing such a receiver was revoked, and the trustee, under mortgages covering the entire line, filed a bill in another court, praying a foreclosure of the mortgage, and appointment of a receiver for the whole road, and the latter court appointed a receiver, who took possession of the road. Afterwards the plaintiff in the first action filed an amended complaint, claiming that the mortgage by which his bonds were secured covered the entire road, and again petitioned for a receiver, and the trustee under another mortgage, who had not been served, voluntarily entered an appearance, and by cross bill sought the foreclosure of his mortgage and the appointment of a receiver. Held, that the appointment by the first court of a receiver for the whole road on the amended petition and cross bill was improper.

Brace, C. J., and Sherwood and Robinson, JJ., dissenting.

In banc. Appeal from circuit court, Iron county.

Bill by E. G. Merriam against the St. Louis, Cape Girardeau & Ft. Smith Railway Company and others. From an order refusing to revoke the appointment of a receiver for the defendant railway company it and certain other defendants appeal. Reversed.

M. R. Smith, R. B. Oliver, and A. N. Edwards, for appellants. Martin L. Clardy, for respondent.

GANTT, J.

This is an appeal from an order of the Iron county circuit court, made August 2, 1895, refusing to revoke and set aside an order made by said circuit court on August 1, 1895, appointing Eli Klotz receiver of the St. Louis, Cape Girardeau & Ft. Smith Railway Company. The appeal is prosecuted under the act of the general assembly of Missouri of April 11, 1895, entitled "An act to amend an act to repeal section 2246, Revised Statutes of 1889 and enact in lieu thereof a new section, approved April 18, 1891, relating to the taking of appeals from interlocutory orders." By this amendment an appeal is allowed from an "order refusing to revoke, modify, or change an interlocutory order appointing a receiver or receivers." Laws Mo. 1895, p. 91. The act is remedial, and must be liberally construed. It appears to have followed so closely the decisions of this court in Greeley v. Railway Co., 123 Mo. 157, 27 S. W. 613, and Merriam v. Railway Co., 126 Mo. 445, 29 S. W. 152, denying appeals in similar cases, that little doubt can exist of the legislative purpose. Some suggestions were made in the original brief of the respondent that it would not cover the appeal in this case, and that there might be some doubt of the constitutionality of the said act, for the reason that the amendment provided for the advancement of such appeals, and for their summary disposition in this court. That this appeal falls within the terms and spirit of the amendment admits of no serious doubt, nor does the suggestion of its unconstitutionality appear to be founded upon any sound basis, and the learned counsel, in his supplemental brief, abandons both suggestions, and contents himself with the reference to the terms of the amendment and asserting that the court in its consideration of the appeal should confine its inquiry within narrow limits. In the absence of any restrictive words it would be contrary to the general trend of construction of remedial statutes to adopt such a view. The plain purpose and intent of the legislature should always be effected by the courts when not in conflict with the organic law, and the universal rule for the construction of remedial statutes is that they should receive a liberal, not a strict, interpretation.

As our jurisdiction is appellate, we are necessarily restricted to the record brought up for review. With that limitation only, it is not only our prerogative, but obvious duty, to review the action of the circuit court, and determine from the law and the facts of the case whether the circuit court exercised a sound judicial discretion in refusing to revoke the appointment of the receiver. Unquestionably, the propriety of the appointment itself is involved in this inquiry, for on this record it is evident no change had occurred in the meantime in the relation of the parties, as the order was entered on one day and the motion to revoke was filed on the next day. The motion itself was most carefully drawn, and brought before the court substantially the whole record of the case from its inception, on March 3, 1893, in the circuit court of Stoddard county down to and including the order of August 1, 1895, made in the Iron circuit court, and all the evidence offered has been duly preserved in the record brought to this court on this appeal, so that every fact upon which the circuit court based its action is before us for review. On the 3d day of March, 1893, Edwin G. Merriam instituted an action in the circuit court of Stoddard county against the St. Louis, Cape Girardeau & Ft. Smith Railway Company, Leo Doyle, trustee, and the Mercantile Trust Company of New York, trustee, and Edward Hidden, trustee. His petition alleged that the defendant railway company ran from the city of Cape Girardeau, through the counties of Cape Girardeau, Bollinger, Stoddard, Wayne, and Carter, to Hunter, in the last-named county; that said company, on September 1, 1880, executed its deed of trust to the defendant Leo Doyle as trustee, and thereby conveyed to him all and singular the railroad of said company as it was then constructed and was being constructed from the city of Cape Girardeau to Delta, a point on the St. Louis, Iron Mountain & Southern Railway Company, in said county, a distance of about 15 miles, together with rights of way, depot grounds, railway engines, and other property belonging to said railway company, a copy of which mortgage was made a part of said petition, to secure the payment of 100 bonds of $1,000 each, and numbered from 1 to 100, inclusive, payable to bearer on the 1st day of September, A. D. 1900, with interest at the rate of 6 per cent. per annum, payable semiannually, a copy of which said bond is set forth in said mortgage. It is further averred that the said railway company afterwards, on July 18, 1881, made a second mortgage, whereby it conveyed to said Doyle all and singular the following property and premises, to wit: "All and singular its said railroad as the same was then constructed or being constructed from Delta, a town or point on the Belmont branch of the St. Louis, Iron Mountain and Southern Railway Company, to a point at or near Lakeville, in Stoddard county, Missouri, a distance of ten or eleven miles, together with rights of way, depot grounds, railway fences, bridges, station houses, engine houses, machine shops, etc., to secure the payment of 170 bonds of that date, of two series, respectively, series A and B; series A being from 1 to 70, and for $1,000 each, and series B from 1 to 100, for $100 each; all payable to bearer September 1, 1901, with interest at 6 per cent., payable semiannually." It is then averred that said plaintiff, Merriam, was the owner and holder of 27 of said bonds secured by the mortgage of September 1, 1880, for $1,000 each, and 48 of said bonds for $1,000 each of series A, secured by the mortgage of July 18, 1881, and 12 of the bonds of series B, secured by said mortgage of July 18, 1881, for $100 each, aggregating bonds to the number of 87, of the par value of $76,200. It is further alleged that in 1885 the said railway company, under the name of Cape Girardeau Southwestern Railway Company, on the 1st day of December, 1885, made still another mortgage to said Leo Doyle, the same property conveyed in the two last-described mortgages, to secure 250 bonds of $1,000 each, therein named, series D, and 200 bonds of $100 each, denominated series E, aggregating $270,000. It is further averred that on the 26th day of May, 1888, the said Cape Girardeau Southwestern Railway Company conveyed to the Mercantile Trust Company, among other property, a part of that conveyed by said two first-described mortgages, and subject to the last-named mortgages, to secure an indebtedness evidenced by bonds to the amount of $1,000,000, of the denomination of $1,000 each, for the purpose in part of redeeming or exchanging the bonds theretofore issued by said railway company, and for the purpose of extinguishing the floating debt of said railway company, said mortgage being designated the "consolidated mortgage"; that some of said divisional mortgage bonds had been exchanged for said consolidated bonds. Still another mortgage, for $200,000, is alleged to have been executed to said Leo Doyle, May 27, 1882. Default in the payment of the interest on Merriam's bonds on March 1, 1892, September 1, 1892, and March 1, 1893, is then alleged, and that the interest upon all of said bonds is due and unpaid, and the company greatly indebted for wages and current expenses; also taxes and judgments. It is then...