Woods to Use v. Pittsburgh, &C. Railway Co.
| Decision Date | 02 January 1882 |
| Citation | 99 Pa. 101 |
| Parties | Woods and McBroom to use, etc. <I>versus</I> The Pittsburgh, Cincinnati and St. Louis Railway Company. |
| Court | Pennsylvania Supreme Court |
Before SHARSWOOD, C. J., MERCUR, GORDON, TRUNKEY, STERRETT, and GREEN, JJ. PAXSON, J., absent
Error to the Court of Common Pleas No. 2 of Allegheny county: Of October and November Term 1881, No. 80.
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T.C. Lazear and S.A. McClung (with whom was John G. MacConnell), for the plaintiffs in error.—Plaintiffs were not estopped by the decree in McElrath v. The Pittsburgh and Steubenville Railroad Company, and the proceedings in pursuance thereof. By admitting the allegations of the bill as to the invalidity of their lien, they merely constituted those allegations evidence as against them: 1 Daniel's Chan. Pr. 531. Moreover, they were not bound by the clause of the decree deciding McElrath's mortgage to be a first lien. That clause must be construed with reference to the object of the bill itself, which was evidently to procure a foreclosure of the mortgage and effect a distribution of the proceeds of sale among the bondholders. This right Woods and McBroom could not resist or gainsay, for their claim was protected by the Resolution of 21st January 1843, and could in nowise be impaired or discharged by the sale under the mortgage, inasmuch as by the terms of the Resolution, "the mortgage was fraudulent, null and void as against such contractors." They could make no claim therefor upon the proceeds of the sale, and hence, as to them, it was true, as alleged in the bill (and which was established as against them by the decree pro confesso), that their claim "could in no wise affect the priority of the lien of the said first mortgage or the rights of any of the holders of the bonds secured thereby." If the mortgage was "fraudulent, null and void as against them," how could they be heard to object to any sale that might be made under it or to the application to it of the entire proceeds, so as to give it the effect of a first lien as regards such proceeds? Byrod's Appeal, 7 Casey 241; Fisher's Appeal, 9 Casey 294; Hoffman's Appeal, 8 Wright 95; Fisher v. Kurtz, 4 Casey 50.
The decisions under the Resolution of 1843, which, we maintain, make our claim perpetual as against mortgages and other transfers, until paid, are the following: Fox v. Seal, 22 Wallace 424; Tyrone and Clearfield R. R. Co. v. Jones, 29 P. F. Smith 60; Pennsylvania and Delaware R. R. Co. v. Leuffer, 3 Norris 168; Shamokin and Pottsville R. R. Co. v. Malone, 4 Norris 25; Pittsburgh, Cincinnati and St. Louis R. W. Co. v. Marshall, Ibid. 187.
The portion of the decree providing that in case of sale the purchaser should take free of all liens, was unwarranted, and, as regards plaintiffs, an utter nullity.
Plaintiffs were not properly joined as parties defendant: Michigan State Bank v. Gardiner, 3 Gray 308; Story's Eq. Pleading. And therefore, though served with process, were not bound to defend, and are not concluded by the decree: Gihon v. Belleville White Lead, 3 Halst. Ch. 531; Williamson v. Probasco 4 Ib. 571; Hogan v. Walker, 14 Howard 37; Jerome v. McCarter, 94 United States 735.
If the decree would have been of no benefit to Woods and McBroom in the McElrath case, had they gone on and obtained one in their favor, they are not estopped by the decree actually entered in the case: Work v. Work, 2 Harris 319; Fisher v. Kurtz, 4 Casey 50.
The other question in the case is whether the plaintiffs are entitled to recover for the stock equal with the cash portion of the decree. We maintain that, as the company did not deliver the stock according to their option, they must now pay its face value in money, and on this point we refer to 2 Parsons on Contracts 652; Roberts v. Beatty, 2 Penrose & Watts 63; Church v. Feterow, Ibid. 301.
Dalzell (with whom was Hampton), for defendant in error. —Plaintiffs were properly made parties to the bill in equity filed by McElrath: Story's Eq. Pleading 193; Finley v. Bk. U. S., 11 Wheaton 304; Bishop of Winchester v. Beavor, 3 Vesey 315-317; Haines v. Beach, 3 Johns. Ch. 459; Bishop v. Paine, 11 Vesey 198; Mondey v. Mondey, 1 Vesey & Beam. 223; Cockes v. Sherman, 2 Freeman 14; Sherman v. Cox, 3 Ch. Rep. 83 (46); Ensworth v. Lambert, 4 Johns. Ch. 604; McGown v. Yerks, 6 Johns. Ch. 450. And are therefore undoubtedly estopped by the decree in that cause and the proceedings thereon: Jerome v. McCarter, 94 United States, 735; Westcott v. Edmunds, 18 P. F. Smith 36; Taylor v. Cornelius, 10 P. F. Smith 198; Wilhelm's Appeal, 29 P. F. Smith 120; Giffard v. Hort, 1 Sch. & Lef. 408.
In P., C. & St. L. Ry. Co. v. Marshall, 4 Norris, a recovery was had upon a contractor's claim, for the reason that not having been made a party to the McElrath proceeding he was not bound by it. The converse of the proposition must be true in this case. The plaintiffs, having been parties, are concluded by the decree.
It is not to be questioned that the claim of the plaintiffs, as contractors of the Pittsburgh and Steubenville Railroad Company, under the resolution of the General Assembly of January 21st 1843, Pamph. L. 367, was paramount to the mortgage of McElrath under proceedings upon which the road was sold and the defendants claim title. The amount of their claim was ascertained by the decree of January 5th 1858, at least prima facie, though not conclusively as to McElrath, the mortgagee, who was not a party to it, though his mortgage was then in existence. It is clear also that if it had been paid in whole or in part when the decree of foreclosure and sale under the McElrath mortgage was made, the mortgagee and purchasers were entitled to the benefit of such payment.
It may also be that under the resolution no mere acquiescence or other acts in pais can operate as an estoppel. Nothing can avail but the written assent of the creditors to the mortgage first had and obtained: Shamokin Valley and Pottsville Railroad Co. v. Malone, 4...
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Hanhauser v. Pennsylvania & New England Railroad Co.
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