Park v. New York, L.E. & W.R. Co.

• Decision Date: 11 November 1895
• Citation: 70 F. 641
• Parties: PARK v. NEW YORK, L.E. & W.R. CO., et al. FARMERS' LOAN & TRUST CO. v. SAME.
• Court: U.S. District Court — Southern District of New York

70 F. 641

PARK v. NEW YORK, L.E. & W.R. CO., et al.

FARMERS' LOAN & TRUST CO. v. SAME.

United States Circuit Court, S.D. New York.

November 11, 1895

Francis Lynde Stetson and David McClure, for motion.

W. W MacFarland, for New York, P. & O.R. Co.

LACOMBE Circuit Judge.

Motion is now made upon the report of the special master, filed November 7, 1895, to confirm and make absolute the sale of the railroad, property, and franchises of the New York, Lake Erie & Western Railroad Company, under foreclosure of the second consolidated mortgage, of which the Farmers' Loan & Trust Company is trustee. No opposition is made by any party to the record, but counsel appearing for the New York Pennsylvania & Ohio Railroad has been heard as amicus curiae and calls the attention of the court to what, it is suggested, may be a jurisdictional objection to the relief asked for. The suit does not present any federal question, and both the railroad company and the trust company are citizens of this state. Undoubtedly, if jurisdiction to sell the property were sought to be sustained solely by reason of a suit to foreclose, brought by the trustee against the railroad company, this identity of citizenship would be a fatal objection; but in the case at bar jurisdiction was not originally acquired by such a suit. Trenor L. Park, the complainant in the first of the above-entitled consolidated actions, was a creditor of the New York, Lake Erie & Western Railroad Company, demanding payment. The railroad company was his debtor, refusing to pay. Manifestly there was a controversy between them, and, as they were citizens, respectively, of Vermont and of New York, such diverse citizenship gave Park the right to take the controversy to the federal court. The fact that, after action was begun by service of process, the defendant railroad did not continue to resist complainant's demands, did not change the situation. There was a controversy when the court took jurisdiction, and jurisdiction was not ousted because subsequently defendant ceased to oppose the granting of the relief prayed for. To hold otherwise would be to deny to the federal courts the power to enter judgment on failure to answer.

Park claimed that by special contract, made when he loaned to the defendant railroad the money for which he sued, he was given an express lien upon accrued earnings and income. He did not seek to disturb any liens superior to his own, but it was competent for the court, by decree in his suit, to sell the property subject to all superior liens, and distribute the proceeds equitably among all entitled thereto. The jurisdiction of the federal courts to take possession of railroad property, and appoint receivers, under...