Weed v. Central of Ga. Ry. Co.
| Decision Date | 23 January 1900 |
| Docket Number | 877. |
| Citation | 100 F. 162 |
| Parties | WEED et al. v. CENTRAL OF GEORGIA RY. CO. et al. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Walter G. Charlton, for appellants.
A. H Lawton and T. M. Cunningham, for appellees.
Before McCORMICK and SHELBY, Circuit Judges, and BOARMAN, District judge.
The appellants claim $15,000 as an allowance for solicitors' fees due to them, as they contend, for services rendered in the prosecution of the intervention of their client John S Tilney, in a suit pending in the circuit court of the United States for the Southern district of Georgia, which involved the properties of the Central Railroad & Banking Company of Georgia. They seek to have the allowance claimed paid out of the fund arising from litigation in said suit, and the settlement thereof, a part of which fund is yet in the registry of the court awaiting further consideration. The matter of the appellants' claim was passed on by a master, who reported in favor of allowing them $5,000. The defendant company filed exceptions to the master's findings, and on the hearing thereof the circuit court holding that the fund was not liable for the appellants' claim, refused to allow them anything. From this decision the appellants prosecute this appeal.
The transcript shows a stipulation as to the facts, in which appears an historical recital of the numerous bills and pleadings under or in which a long contested litigation was prosecuted to a final adjustment of the several conflicting interests in a reorganization of the defendant companies. For the purpose of this inquiry, it is not necessary to set out in detail the several suits which were filed or considered in the circuit and in the circuit court of appeals for this circuit. In further considering the appellants' claim, we will recite some of the matters out of which they contend that their right to be paid out of the fund arises. The appellants' claim is founded on two distinct grounds which may be stated as follows: (1) That the intervention filed in the main cause by John S. Tilney, who was represented by them as counsel, first raised the question, which was subsequently adjudicated in favor of the position taken by him, that the Southwestern Railroad Company was a joint obligor, and not a surety, of the Central Railroad & Banking Company of Georgia upon the tripartite bonds; (2) that, as counsel representing John S. Tilney and other security holders, they filed an intervention in the cause, asking for the appointment of a receiver with H. M. Comer, which intervention resulted in the appointment of R. Sommers Hayes as a co-receiver. The parent or original suit of the numerous suits which we are considering was begun in equity under a bill filed by Rowena Clark on March 4, 1892, against the Central Railroad & Banking Company of Georgia. That company, on July 4, 1892, filed its bill in equity, dependent on the bill of Rowena Clark, against all of its creditors. Among its creditors was the Farmers' Loan & Trust Company, trustee for the second mortgage bonds. Under these several bills the properties of the Central Railroad & Banking Company of Georgia, afterwards known as the 'Central System,' passed into the hands of H. M. Comer, as the sole receiver. The bonds for which the Farmers' Loan & Trust Company of New York was trustee were known as the 'Tripartite Bonds.' The tripartite mortgage consisted of three separate mortgages executed by the Southwestern Railroad Company, the Central Railroad & Banking Company of Georgia, and the Macon Western Railroad Company; each of the three mortgages being a first lien upon the railroad and properties of said three companies. The Farmers' Loan & Trust Company of New York was the trustee under each of these three mortgages, and that company instituted suit in January, 1893, to foreclose on the tripartite bonds; this becoming the main or leading suit in all the subsequent litigations. This bill, as against the parties defendant, namely, the Central Railroad & Banking Company of Georgia, the Southwestern Railroad Company, and the Central Trust Company of New York, representing the second mortgage bonds, sought to have the Southwestern Railroad and the Macon Western Railroad sold as an entirety to satisfy the tripartite bonds. On May 1, 1893, the Central Trust Company of New York filed its answer to the foreclosure bill of the Farmers' Loan & Trust Company, answering the protesting that the sale sought to be had under the bill of the Farmers' Loan & Trust Company should not include the property of the Georgia Central Company from Savannah to Atlanta, but that a sale should be had of the railroad and properties of the Southwestern Railroad Company; contending, further, in its answer, that the holders of the bonds secured under the first mortgage represented by the complainant in the bill should be required to resort, first, to the fund arising from the sale of the railroad and properties of the Southwestern Railroad Company before resort should be had to any of the fund arising from the sale of the main line of the Georgia Central Railroad Company, as aforesaid. At this period of the litigation, on May 25, 1893, Tilney was allowed to intervene in the pending suits. Tilney in his intervention represented himself as a stockholder of the Central Railroad & Banking Company of Georgia, and the owner of certain unsecured certificates, showing an indebtedness of that company to him. The appellants say that while the numerous bills in the litigation, involving the properties of the Central Railroad & Banking Company of Georgia, were pending in the circuit court, it became a material and important question to all the creditors, who may be beneficiaries of the trust fund, as to whether the Southwestern Railroad Company was, and should in law be held as, a surety, or as a co-obligor on the tripartite bonds. Looking at the litigation from the present standpoint, it seems clear, as appellants contend, that Tilney and other stockholders and creditors of the Central Company, as well as the said company itself, were materially interested in securing an adjudication in the several suits which would hold the Southwestern Railroad liable on the tripartite bonds as a co-obligor. They are correct, too, in saying that Tilney's intervention raised a question of vital importance to the properties of the Central System, which was then in the hands of the receiver, because, if the court should hold that the Southwestern Railroad Company was only a surety, and not a co-obligor, the fund arising, or to arise, from the administration of the property of the Central System, would to that extent be diminished. In the absence of any effort on the part of the Central System to secure such final adjudication, the intervention of Tilney should, or would, be considered as timely, and aidful, essentially, in the protection of the common interest of all the beneficiaries of the resulting fund, because, at the time of Tilney's intervention, it is apparent from the subsequent...
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