Newport & Cincinnati Bridge Co. v. Douglass
| Decision Date | 06 March 1877 |
| Citation | 75 Ky. 673 |
| Parties | Newport & Cincinnati Bridge Co. v. Douglass, trustee, & c. Pittsburgh, Cincinnati & St. Louis Railroad Co. v. Douglass, trustee, & c. Pennsylvania R. R. v. Douglass, trustee, & c. J. P. Morton v. Douglass, trustee, & c. J. P. Morton & Co. v. Douglass, trustee, & c. Louisville Bridge Co. v. Douglass, trustee, & c. Western Bank v. Douglass, trustee, & c. Masonic Widows and Orphans' Home v. Douglass, trustee, & c. Farmers Bank of Kentucky v. Douglass, trustee, & c. Masonic Savings Bank v. Douglass, trustee, & c. Stout v. Douglass, trustee, & c. Elliston v. Douglass, trustee, & c. Leary v. Douglass, trustee, & c. Marksbury, & c. v. Douglass, trustee, & c. Cochran, & c. v. Douglass, trustee, & c. Louisville Transfer Co. v. Douglass, trustee, & c. Montgomery & Co. v. Douglass, trustee, & c. Cleveland, Mt. Vernon & Delaware R. Co. v. Douglass, trustee, & c. Harms v. Douglass, trustee, & c. Shea v. Douglass, trustee, & c. Louisville, Cincinnati & Lexington Railroad Co. v. Douglass, trustee, & c. Commonwealth of Kentucky v. Douglass, trustee, & c. |
| Court | Kentucky Court of Appeals |
APPEALS FROM LOUISVILLE CHANCERY COURT.
Action to foreclose railroad company mortgages.
July 25, 1874, George L. Douglass, trustee, etc., filed a petition in the Louisville Chancery Court against the Louisville Cincinnati & Lexington Railroad Company; Joseph Patterson James O. Harrison, and Augustus F. Hawkins, trustees; Norvin Green, trustee; Abram D. Hunt, trustee; the President Directors, and Company of the Bank of Louisville; the German Bank, and the Masonic Bank of Louisville, to foreclose the mortgage executed April 1, 1870, by said railroad company to said Douglass, trustee, etc.
By amended petition alleging the death of James Guthrie, Virgil McKnight, and Joshua B. Bowles, trustees named in one of the mortgages, and that Bowles survived the other two, the heirs of Bowles were made defendants. It was also therein alleged that Susan P. Lees was the sole devisee of James Lees deceased, the trustee in one of the mortgages executed by the railroad company, and that she was a nonresident.
On motion of the mortgagees, Douglass and Green, the railroads and the property of the railroad company were placed under the control and management of a receiver appointed by the court.
The employees of the railroad company asserted their right to be paid the wages due them at the time the railroads, etc., were placed in the hands of the receiver, to be paid out of the fund accumulated in his hands from the net earnings. The judgment of the Vice-Chan. ordering the " back pay" due the employees to be paid out of that fund was affirmed in Douglass, & c. v. Cline, & c., 75 Ky. 608.
At its commencement, and during the progress of the suit, the following classes of lien and non-lien creditors were made parties, and in the final judgment were adjudged to have priorities in the proceeds of the mortgaged property including the fund accumulated in the hands of the receiver after paying the back pay to the employees, etc., in the following order:
First. Taxes due the state as to the entire property.
Second. Taxes due the city of Louisville as to the property within the city.
Third. The several mortgagees as to the property embraced in each mortgage respectively, in the order in which they were executed.
Fourth. Judgment creditors who had instituted proceedings to enforce satisfaction of their judgments on returns of " no property," as provided in section 474 of the Civil Code, and by attachments levied upon the property, rights, and franchises of the company, and by garnishments served upon the officers of the company prior to the commencement of the foreclosure suit and prior to the appointment of the receiver.
Fifth. Judgment creditors, as in the fourth class, who sued out and caused their attachments and garnishments to be levied and served after the railroads and property of the company had been placed in the hands of the receiver.
Sixth. Judgment and non-judgment creditors who sued out attachments and sought to attach the funds accumulated in the hands of the receiver from the net earnings of the road, by causing their attachments to be served on the receiver, etc.
Seventh. Creditors who claimed to have equities superior to those of the mortgagees and all others, by virtue of the peculiar nature of their claims.
The third class as above stated embraces the following:
1. The deed of trust to Harrison & Hawkins, executed May 29, 1854, under act of February 11, 1854, by the Lexington & Frankfort Railroad Company, conveyed the property " now held or hereafter to be acquired" by the company, to secure the payment of $130,000 of coupon bonds, $25,000 of which remained unpaid, and for which judgment was rendered with interest and costs; for $1,000 as a compensation for their services as trustees; and also for $1,000 for the expense incurred by the employment of an attorney in this case, to be paid over to him.
2. The mortgage to the city of Louisville, executed November 20, 1854, by the Louisville & Frankfort Railroad Company, conveyed the property of the company " now in use or which may hereafter be acquired" by the company, to secure the payment of $275,000 of coupon bonds, $100,000 of which maturing in 1881 remained unpaid, on account whereof, and unpaid interest thereon, judgment was rendered for various sums amounting to $114,070.
3. The mortgage to James Guthrie, Virgil McKnight, and Joshua B. Bowles as trustees, executed March 12, 1857, by the Louisville & Frankfort Railroad Company, conveyed the property owned, " or which may hereafter be acquired," to secure certain bonds of the company, on account whereof, and unpaid interest thereon, judgment was rendered for $38,110, with interest and costs, and also for $1,500 as compensation to Joseph Patterson, who represented himself and other beneficiaries, to be paid to the attorneys employed by him for services in this suit.
4. The deed of trust to Norvin Green, executed January 1, 1867, under act of February 2, 1866, by the Louisville & Frankfort Railroad Company and the Lexington & Frankfort Railroad Company, conveyed the railroad " and all other properties, rights, and franchises now held and hereafter to be acquired" by each of said companies respectively, to secure $3,000,000 of the joint bonds of the two companies and interest thereon, on account whereof, and unpaid interest thereon, judgment was rendered for various sums amounting to $3,615,195 and costs, and also for $5,000 for compensation to the trustee, and also for $5,000 additional compensation to be paid to the attorneys employed by him for services in this case.
5. The mortgage to George L. Douglass, trustee, executed April 1, 1870, under acts of February 9 and March 21, 1870, by the Louisville, Cincinnati & Lexington Railroad Company, conveyed the railroad from Louisville to Lexington and from the junction near Lagrange to the Cincinnati & Newport Bridge over the Ohio River at Newport, Ky., and all the property " now on hand or acquired hereafter, and generally the property and franchises" of the company, to secure $1,000,000 of thirty-year coupon bonds of the company, on account whereof, and unpaid interest, judgment was rendered for various sums amounting to $1,200,840, with interest and costs, and for $500 as compensation to the trustee, and also for $2,000 additional to be paid to the attorney employed by him for services in this case.
6. The mortgage to Abram D. Hunt, executed October 1, 1872, under act of March 27, 1872, by the Louisville, Cincinnati & Lexington Railroad Company after it had made the contract for the purchase of the Shelby Railroad, conveyed the " Shelby Railroad, leading from Anchorage to Shelbyville," and all the other roads and property and " rights and franchises" of the company, to secure $725,000 Shelby cut-off bonds at thirty years, with interest coupons of the company; and on account of such of these bonds as were disposed of by the company, and unpaid interest thereon, judgment was rendered for various sums amounting to $440,040, with interest and costs.
7. The consolidated mortgage or deed of trust to James Lees, trustee, executed April 1, 1873, under act of January 23, 1873, by the Louisville, Cincinnati & Lexington Railroad Company, conveyed all the railways and property owned by the company, " and also all the tolls, income, rents, issues, and profits, and alienable franchises" of the company, to secure $10,000,000 of coupon thirty-year bonds which the company proposed to issue and dispose of, to take up all previous bonds and extend the road; but which scheme was not carried into effect. On account of bonds issued under this mortgage and unpaid interest thereon judgment, in favor of Gavin H. Cochran, for himself and as representative for parties holding bonds and coupons, was rendered for various sums amounting to $1,718,475 and interest and costs; and also for $5,000 as compensation to said Cochran, to be paid to the attorney employed by him for services in this case.
The Louisville & Frankfort Railroad Company, incorporated by act of March 1, 1847, owned the railroad, etc., from Louisville to Frankfort.
The Lexington & Frankfort Railroad Company, incorporated by the act of February 28, 1848, owned the railroad, etc., from Lexington to Frankfort.
These two railroads were managed and operated as one road from July 30, 1859, until the two companies were consolidated, and while they were so being operated and managed the two companies under act of February 2, 1866, jointly constructed and owned the branch road from the junction near Lagrange to the bridge over the Ohio River at Newport.
The two companies were...
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