Moran v. Hagerman

• Decision Date: 23 October 1894
• Docket Number: 86.
• Citation: Moran v. Hagerman, 64 F. 499 (9th Cir. 1894)
• Parties: MORAN et al. v. HAGERMAN et al.
• Court: U.S. Court of Appeals — Ninth Circuit

64 F. 499

MORAN et al. v. HAGERMAN et al.

No. 86.

United States Court of Appeals, Ninth Circuit.

October 23, 1894

Robert M. Clarke, for appellants.

W. E F. Deal and Edmund Tauszky, for appellees.

Before McKENNA and GILBERT, Circuit Judges.

GILBERT Circuit Judge.

In the year 1881, Moran Bros., the appellants in this case, were the owners of 310 bonds of $1,000 each of the Oregon & Nevada Railroad Company, which bonds were secured by a mortgage deed of trust to the Union Trust Company of New York. The total issue of the bonds was 600, but the validity of the remaining 290 was denied by Moran Bros. In March, 1883, the trust company began a suit in the United States circuit court for Nevada to foreclose the deed of trust and sell the mortgaged property, and to have the proceeds of the sale applied to the 310 bonds held by Moran Bros., and such other bonds, if any as had been legally issued. The trust company and the railroad company were the only parties to the suit. On April 14, 1883, and while that suit was pending, Moran Bros., as complainants, brought, in the same court, a second suit, which is the suit now before this court on appeal, alleging in their bill that the 290 bonds above referred to were fraudulent, and praying for a decree that the holders thereof be not entitled to share in the proceeds of the foreclosure sale. To this suit the holders of the 290 bonds and the railroad company were made parties defendant. On May 19, 1883, the answer of certain of the holders of the 290 bonds was filed, denying the charge of fraud, and alleging that the bonds held by them-- 147 in all-- were valid, and were acquired by them for a valuable consideration, and praying for a decree in accordance with such facts. The railroad company answered, admitting the allegations of the bill. On August 7, 1883, the circuit court made an interlocutory decree in the first suit, which may be called the 'foreclosure suit,' finding the averments of the bill to be true, and ordering a sale of the mortgaged property, and a return of the proceeds into court to await the order of distribution to be thereafter made. The property was sold April 17, 1884, for $372,534.21, to Moran Bros which sum was the amount due them upon their 310 bonds, together with the costs. After the entry of the order of sale in the foreclosure suit, testimony was taken in that suit upon the question of the validity of the 290 bonds, but the holders of those bonds were not present or notified of that proceeding. Testimony was also taken at about the same time in the present suit. On March 29, 1884, the circuit court rendered its decision in both suits, and on May 6th following entered a decree in the foreclosure suit adjudging that said 147 bonds were not entitled to participate in the proceeds of the sale of the property, except as to the surplus remaining after the payment of the 310 bonds of Moran Bros. No appeal was taken from that decree. On May 13, 1883, the circuit court made its decree in the second suit,-- which is this suit,-- to the same effect as in the foreclosure suit. On March 23, 1886, an appeal was taken to the supreme court from the decree of the circuit court in this cause, and on March 3, 1890, the supreme court reversed the decree of the circuit court as to the appellees herein, who are the holders of 31 of said 147 bonds, holding that they entitled to share in the proceeds of the sale upon terms of equality with Moran Bros. McMurray v. Moran, 134 U.S. 150, 10 Sup.Ct. 427. The mandate of the supreme court was issued July 19, 1890, and was filed in the circuit court November 3, 1890. It directed that 'such execution and further proceedings be had in said cause, in conformity to the decree and opinion of this court, as, according to right and justice and the laws of the United States, ought to be had. ' On February 2, 1891, the circuit court, for the purpose of carrying out said mandate, rendered a decree in this cause, adjudging that the appellees 'share in the proceeds of the said sale in proportion to the amount of bonds held by them respectively, and upon terms of equality with the complainants. ' On October 24, 1891, Watkins, one of the appellees, filed a notice of a motion and petition for an order amending and modifying the decree of February 2, 1891, so that there be inserted therein an order directing the master to ascertain the amount due on the 341 bonds, and the amount of the proceeds of the foreclosure sale, and the costs of that suit and sale, and the proportion of the proceeds properly applicable to the payment of Moran Bros.' 310 bonds and the 31 bonds owned by the appellees, and that upon ascertainment and determination of said matters the appellees have judgment and execution against Moran Bros. for their proportionate amount of said proceeds, 'and for such other or further order in the premises as is consistent and in conformity with the opinion, decree, and mandate of the supreme court of the United States, in this cause. ' The notice stated that the motion would be made upon the ground that said matters were omitted from the decree by oversight, inadvertence, and mistake. It was stated in the petition that the proceeds of the sale after payment of the costs had been paid to Moran Bros. in the sum of $367,234.55. Objection was made by Moran Bros. to the motion and petition upon the ground, among other objections, that the term at which the decree of February 2, 1891, was entered, had expired before the motion and petition were filed, and that, therefore, the court had no jurisdiction or control of the decree, or power to modify the same. The court overruled the objections, and upon the 9th day of May, 1892, made an order granting the prayer of the petition, modifying the decree accordingly, and directing the master to ascertain and report to the court concerning the matters alleged in the petition. On September 6, 1892, a final decree ^[1] was made, affirming the report of the master, and awarding the appellees their proportion of said proceeds in the sum of $33,419.57, with interest from the date of the sale, amounting in the aggregate to $51,659.44, and decreeing that the appellees recover the same of and from Moran Bros. The appeal is taken from the final decree, and the only error assigned is that the circuit court had lost jurisdiction of the cause, and had no power to modify the decree of February 2, 1891, for the reason that the term of the court at which that decree was rendered had expired before application was made for its amendment.

Whether there was error in entering the order and decree subsequent to the decree of February 2, 1891, depends upon whether or not the decree of that date was final, and was such as to carry out in all respects the decree and mandate of the supreme court. The decision of the supreme court was that the appellees herein were entitled to their pro rata share of the proceeds of the sale, and the mandate required that such execution and proceedings be had in the circuit court as ought to be had in conformity with the decree and the opinion of the supreme court. In short, the mandate directed the circuit court to take such steps as should be necessary to place the appellees in possession of their proportion of the proceeds of the mortgaged property. The decree of February 2, 1891, fell short of doing this. It was but a repetition of the terms of the mandate. It decreed that the appellees, together with Moran Bros., should have their 341 bonds paid pro rata out of the proceeds, but it contained no order of distribution; indeed, the proceeds were no longer in the possession of the court, and it contained no statement of the amount of the proceeds, or the amount due the appellees. It did not direct the payment by Moran Bros. to the appellees of any sum whatever. The mandate remained in force until its behests were complied with. A decree which fell short of a fulfillment of the decision of the supreme court, and failed to secure to the successful litigant the relief to which he was decreed to be entitled, was not a final decree, and did not preclude the court from further action, even at a subsequent term. The circuit court could not, by a partial compliance, lose the power to obey the mandate to its full extent. The suit had been begun by Moran Bros. for the purpose of obtaining a decree directing the payment of their bonds to the exclusion of the bonds held by the bondholders whom they brought into court...