Metropolitan Nat Bank of New York v. St Louis Dispatch Co

• Decision Date: 10 May 1893
• Docket Number: No. 224,224
• Citation: 37 L.Ed. 799,13 S.Ct. 944,149 U.S. 436
• Parties: METROPOLITAN NAT. BANK OF NEW YORK v. ST. LOUIS DISPATCH CO. et al
• Court: U.S. Supreme Court

149 U.S. 436

13 S.Ct. 944

37 L.Ed. 799

METROPOLITAN NAT. BANK OF NEW YORK

v ST. LOUIS DISPATCH CO. et al.

No. 224.

May 10, 1893.

This was a suit by the Metropolitan National Bank of New York against the St. Louis Dispatch Company, the Dispatch Publishing Company, and Henry L. Sutton, trustee, to foreclose a mortgage. The court below dismissed the bill, (36 Fed. Rep. 722,) and complainant appeals. Affirmed.

Statement by Mr. Chief Justice FULLER:

The Metropolitan National Bank of New York filed its bill of complaint against the St. Louis Dispatch Company, a cor- poration organized under the laws of the state of Missouri; the Dispatch Publishing Company. a corporation likewise organized under the laws of that state; and H. L. Sutton, trustee, a citizen of Missouri,—July 1, 1887, and an amended bill April 21, 1888, which averred:

'That on or about the 1st day of June, A. D. 1877, the said the St. Louis Dispatch Company owned a certain daily evening newspaper in the city of St. Louis, known as the 'St. Louis Dispatch,' and no other property whatsoever, unconnected with, and not appurtenant to the publication and operation of, said newspaper. That the said the St. Louis Dispatch, a newspaper, had been published continuously and daily for many years, to wit, since on or about the year 1852, and continued to be published daily, excepting Sundays, up to the date hereinafter mentioned. That the said the St. Louis Dispatch, a newspaper, was on the 1st day of June, A. D. 1877, a fully-equipped journal, having a building under lease; all the machinery, type, presses, cases, forms, paper, furniture, and tools useful or necessary for the printing and publishing of the same; a good circulation and advertising patronage, (known as its good will;) and a share of stock in the Western Associated Press, under which it was entitled to receive telegraphic news and dispatches collected from all parts of the world, as hereinafter more particularly set forth.'

That on said 1st day of June the St. Louis Dispatch Company, by deed of trust in the nature of a mortgage, duly recorded, conveyed to Henry L. Sutton, as trustee, the following deseribed property: The machinery, type, presses, cases, furniture, paper, forms, and tools, together with the good will, of the St. Louis Dispatch Company, and its franchises, of every kind and description, rights, privileges, and property, including its interest in the Western Associated Press, and any and all shares by it owned in the Western Associated Press, as also all accounts and choses in action or other valuable things by it owned, or to it belonging, wherever situated; as 'also all other property, of every other nature and charcter, which the said party of the first part may acquire during the existence of this deed of trust,' to secure the payment of a note, dated that day, to the order of Frank J. Bowman, for the sum of $15,000, payable two years and six months after date, with interest at 9 per cent. per annum, payable 1 1/2 per cent. on the 1st days of August, October, December, February, April, and June of each year until the payment of the principal sum, which note, so secured, was negotiated for value, and complainant became the legal holder thereof, for value, before maturity.

That at the time of the execution of said mortgage the Western Associated Press was a corporation organized under the laws of the state of Michigan, the sole purpose and object of its existence being 'to procure intelligence for the newspaper press from all parts of the world, by telegraph, express, mail, or otherwise; and membership in said association was and is limited generally and specifically to owners and proprietors of newspapers and publishers of periodicals.'

That at that date, and prior thereto, the St. Louis Dispatch Company was the legal owner, on the books of the Western Associated Press, of one share of stock, so called, in said association, which was of great value, represented by a certificate of membership, No. 38, which was, upon the execution of the mortgage, placed in the possession of the trustee, with the following indorsement: 'The within certificate of stock is hereby assigned and transferred to Henry L. Sutton, trustee in deed of trust bearing date June 1st, 1877, for like purposes as other property therein named is transferred, being the certificate of stock in the Western Associated Press therein referred to.'

The bill then stated that on February 2, 1878, the St. Louis Dispatch Company made a second mortgage, conveying all of the property described in the first, and other property subsequently acquired, to a trustee in trust to secure another loan made by it, which was duly recorded, and under which a sale of the property took place December 9, 1878, (the sale so made being subject to the first mortgage;) one Arnold being the purchaser, who on the same day transferred it to Joseph Pulitzer.

That, at the time of the sale, John A. Dillon was the owner and publisher of a certain newspaper known as the 'Evening Post,' and was printing and publishing the same in the city of St. Louis. That the Post was the rival and competing newspaper with the Dispatch, and did not, nor did Dillon, own a membership in the Western Associated Press, nor any right to the telegraphic news and dispatches thereof. That neither the Post nor Dillon, in the business of carrying on and publishing the Post, had any presses, type, or paraphernalia for the printing or publication of a newspaper. That the Post had been established but a few months before the said sale of the Dispatch newspaper, and had nothing of value, nor had the said Dillon, in connection with said publication, excepting a small circulation and advertising patronage, and the name of the 'Post.'

That on December 10, 1878, the said Dillon and the said Pulitzer consolidated the Post and the Dispatch, and on that day published a consolidated paper under the name of the 'Post-Dispatch,' and that Dillon acquired whatever interest in the Dispatch property came to him with full notice of the lien of the first mortgage, and subject thereto.

It was further averred that on December 11, 1878, the Dispatch Publishing Company was organized as a corporation under the laws of Missouri, the object of which was the publication of a newspaper to be known and called the 'Post and Dispatch.' That, on that day, Pulitzer and Dillon, having consolidated the two papers, transferred the same to the Dispatch Publishing Company, which took the same subject to the mortgage on all the property of the St. Louis Dispatch Company, and with full knowledge thereof. That thereupon, on the same day, the defendant the Dispatch Publishing Company entered into the possession of the building theretofore occupied by the St. Louis Dispatch Company in the publication of the St. Louis Dispatch, and of the good will of that newspaper, with the presses, type, etc., and all the rights, property, and franchises thereof, including the membership in the Western Associated Press represented then by certificate No. 38. That the Dispatch Publishing Company has ever since had the good will of the Dispatch Company, and the name 'Dispatch,' and used the same building formerly occupied by the St. Louis Dispatch Company. The bill further alleges that the Dispatch Publishing Company paid the interest on the Bowman note on the 1st days of February, April, June, and October, 1879, but the remaining installment, payable on December 1, 1879, being the date on which the principal became due, they refused to pay, as also the principal. That upon such refusal the trustee, Sutton, demanded of the Dispatch Publishing Company the property of the St. Louis Dispatch Company, including its good will, and all the property recited in the first mortgage, which the Dispatch Publishing Company wholly refused to surrender. That at that time the Dispatch Publishing Company had alienated, destroyed, or gradually used up all the machinery, type, presses, and property of a perishable nature, of the St. Louis Dispatch Company.

The bill also averred that the good will of the St. Louis Dispatch newspaper was its chief element of value. That the good will so acquired by the Dispatch Publishing Company of the St. Louis Dispatch Company has been in the constant use and control of the first-named company, and has never been alienated. That the name of a newspaper is valuable and salable, and that the Dispatch Publishing Company acquired its name under the second mortgage, subject to the lien existing upon it, and still retains the name 'Dispatch' in the publication of its newspaper.

That the machinery, presses, etc., acquired by the purchase under the second mortgage by the Dispatch Publishing Company, it continued to use for a long time, but substituted new paraphernalia for publication from time to time, and that on the date of the maturity of the note the Dispatch Publishing Company had none of the original paraphernalia described in the first deed of mortgage. That the effect of the acquisition of the two properties known as the 'Evening Post' and the 'St. Louis Dispatch' was that the lien of the first mortgage attached to all the property of the Dispatch Publishing Company, and that the latter recognized the validity of the mortgage lien by paying the interest on the mortgage debt, and the assessment on the membership in the Western Associated Press. That the complainant and the trustee were induced by its conduct to believe that the Dispatch Publishing Company would pay the debt or surrender the property in case of a failure of compliance with the conditions of the trust deed. That the Dispatch Company continued to recognize the mortgage as a lien on said property, including the membership, up to the maturity of the note, when it refused to pay the same, or surrender the property. That for the reason that the good will and other property of the mortgagors was confused and intermingled with the property of the ...