Texas Trunk Ry. Co. v. Lewis

• Decision Date: 05 May 1891
• Citation: 16 S.W. 647
• Court: Texas Supreme Court
• Parties: TEXAS TRUNK RY. CO. v. LEWIS, Sheriff, <I>et al.</I>

16 S.W. 647

TEXAS TRUNK RY. CO. v. LEWIS, Sheriff, et al.

Supreme Court of Texas.

May 5, 1891.

Appeal from district court, Dallas county; R. E. BURKE, Judge.

Fitzhugh & Wozencraft and Bassett & Muse, for appellant. Sawnie Robertson, for appellees.

STAYTON, C. J.

On December 5, 1881, W. F. Thompson instituted an action against the Texas Trunk Railway Company in the district court for Dallas county to recover a debt due him by the company, and to secure it he sued out and caused to be levied, at 12 o'clock M. of same day, a writ of attachment on the "road, road-bed, track, right of way, chartered rights, franchises, and privileges" of the company. The claim of Thompson having been transferred to John Wolston and Charles Vidor, a judgment was rendered in their favor against the company on March 15, 1887, with foreclosure of attachment lien, under which an order of sale issued, and this the sheriff was proceeding to execute by a sale of the attached property when this suit was brought by the Texas Trunk Railway Company to enjoin the sale of the property in obedience to the writ. On November 5, 1881, W. K. Snow and others brought a suit against the railway company in the district court for Kaufman to enforce claims for labor and material alleged to have been furnished by them, to secure which they asserted liens and sought the appointment of a receiver. Before noon on December 5, 1881, the district court for Kaufman county appointed Thomas M. Simpson receiver of the property of the company, but he had not qualified or taken possession of the property at the time the attachment sued out by Thompson was levied, though he subsequently did. Some time during the year 1880 the railway company had borrowed money to construct its road, and had issued bonds therefor, secured by mortgage on the property levied upon under the attachment sued out by Thompson, which were duly recorded in the counties of Dallas and Kaufman as early as June 2, 1880. This mortgage seems to have covered all the property seized under attachment, and to have provided that, in default of payment of interest as it fell due, the right of the mortgagee to enforce it for the entire principal and interest due should exist, and the entire sum secured by the mortgage be deemed due. Default was made on interest due May 1, 1882, and subsequently, and thereupon the mortgagee elected to declare the principal on the bonds to be due. The mortgage for the benefit of bondholders seems to have been made to the International Trust Company, as trustee. At the June term of the district court for Kaufman county for the year 1882, Charles Stepath and other holders of the bonds of the company sought to intervene in the suit filed in that court by Snow and others, but that court refused to permit this to be done; whereupon they filed in that court their petition for intervention, as well as their petition and bond to remove the cause to the circuit court of the United States for the northern district of Texas, after which they filed in that court a transcript of the proceedings in the cause pending in the district court for Kaufman county. At the December term of the circuit court of the United States, Snow and others moved that court to remand the cause to the state court, but the motion was overruled, (16 Fed. Rep. 1,) and the cause remained in that court until its January term, 1885, when it was dismissed, at the costs of plaintiffs therein. After that suit was removed to the circuit court of the United States, the district court for Kaufman county seems to have exercised jurisdiction therein, but what disposition, if any, that court ever made of the case does not appear, though the record before us tends to show that the demands of Snow and the other plaintiffs therein may have been settled in proceedings in the circuit court of the United States now to be referred to. On September 20, 1882, Charles Stepath and others holding bonds of the railway company, for themselves and all other bondholders, filed a bill in the circuit court of the United States, to which the case before referred to had been removed, praying the foreclosure of mortgage given to secure the bonds held by them, the appointment of a receiver and the sale of the mortgaged property; and to this suit the International Trust Company, the trustee, made itself a party. On January 5, 1883, the circuit court of the United States appointed a receiver, who took possession of the property, and operated it, until it was sold under a decree of that court, entered on January 31, 1883, foreclosing the mortgage to secure bondholders; but that decree required persons holding liens for labor to be notified to present their claims before the master for adjudication, with a view to their settlement out of the proceeds of sale. The sale was made as directed by the court, and a report thereof made, which was confirmed; but the decree of confirmation gave protection to claims of such lienholders as had not theretofore presented their claims, and had them acted upon by the master; and under this the inference is that the claims of Snow and others, who instituted the suit in Kaufman county, were settled. After the sale of the railway and other property covered by the mortgage, the purchasers at that sale reorganized the company, and incurred indebtedness to raise funds with which to complete such additional road as was necessary to preserve the charter, but failed to pay the money thus borrowed when it became due; and thereupon judgment was obtained against the company, and the property was again sold to satisfy an execution issued on that judgment. After that sale the purchasers thereat reorganized the company, and were conducting its business, when the order of sale now sought to be enjoined was issued and placed in the hands of the sheriff, who was proceeding to execute it when this suit was brought to restrain him. Neither Thompson nor Wolston and Vidor were made parties to the suit removed to the circuit court of the United States, nor to the suit instituted in that court; and it is conceded that the sale appellees were about to have made, in foreclosure of attachment lien adjudged to them, would cloud the title of appellant, if made. It is conceded that the mortgage under which foreclosure was had in the circuit court of the United States was to secure legal demands, and that the lien thus given was prior to any that could have been obtained through levy of attachment in the action brought by Thompson; but, in the...