Whitehead v. Farmers' Loan & Trust Co.

• Decision Date: 06 November 1899
• Docket Number: 1,075.
• Parties: WHITEHEAD et al. v. FARMERS' LOAN & TRUST CO.
• Court: U.S. Court of Appeals — Eighth Circuit

98 F. 10

WHITEHEAD et al. v. FARMERS' LOAN & TRUST CO.

No. 1,075.

United States Court of Appeals, Eighth Circuit.

November 6, 1899

The Lakewood & Golden Railroad Company, a corpora of the state of Colorado, being the owner of a line of railroad extending from Denver, through Arapahoe county, to Golden, in the adjoining county of Jefferson, on November 1, 1890, executed a mortgage conveying its entire property to the Farmers' Loan & Trust Company, the appellee, as trustee, to secure the payment of an issue of bonds. In July, 1896, this trustee instituted a suit in the United States circuit court for the district of Colorado to foreclose the mortgage. A receiver was appointed, and took provisional possession of the property. The taxes assessed by the county of Jefferson against the railroad company for the year 1893 were not paid and on November 26, 1894, the taxes still remaining unpaid and delinquent, the treasurer of the county sold that portion of the railroad track located within the confines of Jefferson county to one M. G. Palmer for $1,665.59, and issued a certificate of purchase therefor to him, who soon thereafter assigned the same to W. H. Whitehead, one of the appellants. The taxes for the year 1894 not having been paid by the railroad company when due, Whitehead, on August 28 1895, paid the same, amounting then to $1,374.37, and an entry showing such payment was made on the certificate of purchase then held by him. In due course of time, Whitehead demanded from the treasurer of Jefferson county a tax deed based on his alleged right thereto as holder of the certificate of purchase. Thereupon this suit was instituted by the appellee to enjoin the execution of such a deed. The bill sets out the facts already stated, and further alleges, in substance, that Whitehead is claiming and demanding from the receiver appointed in the main case the sum of $5,002.47, as the amount due under and by virtue of his ownership of the certificate of purchase and subsequent payment of taxes by him; that the sale by the treasurer of Jefferson county in 1894 was void, because it was an attempt to segregate and sell a part of an entire line of railroad, instead of the whole thereof; that Whitehead was a volunteer in paying the taxes to the county of Jefferson, and well knew the facts above stated; that the execution of the deed, as demanded by Whitehead, would be an interference with the property in the custody of the court through its receiver, and would constitute a cloud upon the title of the railroad property. The prayer of the bill is for an injunction restraining the treasurer of the county from executing and delivering the tax deed to Whitehead, and restraining Whitehead from demanding such deed, as well as for other and general relief. To this bill a demurrer was interposed, for the reason, among others, that the allegations of the bill were insufficient to entitle complainant to any relief. This demurrer was heard by the trial court, and overruled. An interlocutory injunction was awarded restraining the treasurer of the county and Whitehead, as prayed for. From this order an appeal has been duly prosecuted to this court.

Gustave C. Bartels (James H. Blood, on the brief), for appellants.

Charles W. Waterman (Edward O. Wolcott, Joel F. Vaile, Herbert B. Turner, David McClure, and Louis B. Rolston, on the brief), for appellee.

Before CALDWELL and SANBORN, Circuit Judges, and ADAMS, District Judge.

ADAMS District Judge, after stating the case as above, .

The only question presented for our determination is whether the order for an interlocutory injunction was warranted by the averments of the bill. Counsel for appellee, in argument and brief, disclaim any contention that there was any irregularity in the assessment of the property of the railroad company, and admit that the taxes for the year 1893, as well as for the year 1894, were legally assessed, and never paid by the railroad. The bill in no way challenges the regularity of the sale of the railroad to Palmer, except that there was an attempt to segregate a part of the railroad track from the entire line, as well as from the franchise of the railroad company, and to sell the same substantially as real estate is sold under execution in the state of Colorado. The bill does not aver that the amount demanded by Whitehead as due him by virtue of his ownership of the certificate of purchase and subsequent payment was in excess of the amounts paid by him, with the accumulated statutory interest. There are no averments showing that the appellee, or any one else, prior to the institution of this suit, ever offered to refund to Whitehead the amount due him, or that the appellee was ready to pay the same to Whitehead as a condition to obtaining the relief sued for. The order for the interlocutory injunction appears to have been made without imposing any such condition upon the appellee. The serious contention presented by counsel for the appellee is that the sale of the track of railroad situated in Jefferson county, segregated from the balance of the line and from the franchise of the company, was not warranted by law, and this court is asked to declare such a sale void, and, as a result thereof, to affirm the unconditional order awarding an interlocutory injunction in this case. Counsel for appellants take issue with this main contention of the appellee, and further insist that the appellee's bill is without equity, because unattended with any payment or offer to pay the amount of taxes conceded to have been paid by Palmer and the appellant Whitehead for the years 1893 and 1894, with the accumulated interest thereon. In the view we have taken of this case, the last question is the only one which at the present time demands attention.

The appellee, the complainant below, being the...