CF)NTRAL TRUST CO. "'; EAST fi:NNESSEE, V. &: G. R. CO.
case, for I think be improper to assume, in any respect, theattitude of a court of error; I have simply mentioned these matters to show, that there were questions to be decided, and that only intensity of, personal feeling could lead to the assertion that the judgment was so grossly and manifestly erroneous and unjust as to be evidence of corrup.tion. I haveno hesitation in saying that there is nothing in the case before me that justifies a declaration that this judgment was a corrupt one. I think this ends the case; Counsel, it is true, insists that, although this judgment might be conclusive in favor of,JosHn, it would not be conclusive in favor of Lamb, who actually made the representations; and that in this proceeding complainants are entitled to a finding as against Lamb,and an adjudication that the amount thus found isa lien upon the land, even in the hands of the cattle company. This is a mistake. Joslin stands by the judgment of the superior cOurt acquitted of wrong, and the title he held was free from any burden· of lien in favor ofthesl' complainants. Holding such title,heconveyed it to the cattle company; andwhileitmaybetrue---:-and as to that I express no opinion-that that judgmentind"avor of Joslin is no protection to Lamb, still any relief ag8.insthim must be sought by an action at law,and not by this table l>:roceeding. ' .A deCree will be entered dismissing the bill.
Co. arid others.
TENNEssEE, V. & G. R.
In re Intervening Petition of
«(Jirouit Oourl, N.D. Georgia. December 81.18861
In a .suit to foreclose a mortgage. upon a railway extending through several states; "'hErre original bill is filed in Tennessee, and ancillary bills in Georgia, AlabariJ:a;and Mississippi, upon application to the ancillary court, in Georgia, .by a judgment creditor of the JP,ortgagor, to have an order against.the receiyer topay his' claim out of the earnings of the mortgagor that were on hand 'at the date of the appointment of the receiver,held, the petition withOut:pl'ejudice, that the c.ourt in Tennessee. in which the orIginal bill was filed, and upon whose ordets thll receiver had paid. out all of the funds to his hands, is the proper tribunal to which il. jUdgment creditor should make application for relief. .
BAllm CREDITOR-PERSONAL INJUlUEs:-PRIORITY CORPUS OF ESTATE. ' ,
A creditor having a judgment for personal injuries against the mortgagor, growing out of torts committed by it before the receivership, iS8 general cr,editor,and his judgment is not -entitled to priority of Slltisfaction out of the earnings of the receivership, and alortiori not out of the corpUII of the estate.
In Equity. R. B. Trippe nnd MtCarny&.JValw, for petitioner. Bacon & Rutherford, P. Q. Mynatt, and W. M. Baxter J conttrG.
PARD:a:E,J. The petitioner's based on a certain judgment rendered in his favor against.theliefendant company in the superior court of Whitfield county, Georgia, on:the l thirteenth day of October, 1884, based upon personal injuries to petitioner's son, inflicted by the negligence ofdefendant'sagenta in the month of November, 1881. The intervention was filed in this coud;'ApriL26, 1886; praying for leave to file the claim in this cause, to be 'paid out .of tlle proceeds of the sale of said defendant's.property ordered heretofore to be sold, as appf'.ars by the records ,referring ta the ancillary decree oHoreclosure rendered in the court, March ,·27 ,1886. On, tl:iisintervention, this court (McCAY, J., presiding) made the following order: "The foregoing petition read and considered, and it is thereupon ordered that the prayer of petitioner be granted." Some contention has been had as t(j the force i:m<i effe(,lt of this order, but it seemselear that it was inre,ndedas an order to permit the filing and hearing of the clahn, and not as an absolute 'ex parte order that the claim should be paid. The· proceEdings in this cause have been ,from the first ancillary to the main. suit for the 'foreclosure of a.mortgage·on a railway line: extending, into' the ·states of .Virginia,· Tennessee, .Georgia, Alabama, and Mississippi, instituted and carried on in the United States circuit court for the Eastern distriut of Tennessee, at Knoxville, Tennessee. The court having control of the main suit has, of course, direct control of the receiver appointed in the case, of all moneys coming to his hands, of the distribution of the same, and of the distribution of all funds derived from the saJe of property sold under decrees in the cause. n fdllows.that if any account is to ,be' taken of the: the receiver's hands, and of the earnings of the railway property while in the receiver's hands,and of the disposition made of Iilll funds, in order to determine the existence of a 'priority of any lien; such account should be taken in the main cause, and .,cannot be taken in any ,ancillary suit, where the court bas no possession of the fund. For instance, on this hearing, it is. admitted that $75,000 cameinto the hands of the receiver property, and thaUhe same were on his taking possession of the rail earnings of the property prior to the receivership. This fund was conby which it was fessedly subject to the liens' for labor earned, and has been largely, if not ei1tirely, so applied by the court in the main cause. Now, if any one has a on such fund, or on the property of the company by reason of such fund, sayfor a judgment recovered against the company prior to the receivership, an accounting and marshaling of liens must be had, and such accounting and marshaling can only be. had in. one court, or. inextricable confusion would result. So far, therefore, as petitioner's right to be paid depends upon any eqUity resulting from the receivership, or the management and disbursement of funds coming to the hands of the receiver, we can give him no relief, and can only refer him to the consideration of the circuit court at Knoxville. In the original decree of foreclosure, Tendered iIi the main suit, it was ordered as follows: '.
CENTRAL TRUST CO. t7.EAST TENNESS]JlE, V. & G. R. CO.
,"And the purchasers of said' property at said sale sbaIr. as a part of the con.. sideration of the purchase, and in addition to the !lum bid, take the said prop": erty upon the express conditi,on that be or they. will payoff, satisfy, and discharge any, and all claims nQw pending and undetermined in eitheJ;" said courts accruing prior to the appointment Of, the receiverthel'ein, or during the receivership, which may be ,allowe.d or adjudged by this court, as prior in right to said respective mortgages. " r;
In the decree of March 27,1886, inthia' court, ratifying and adopting the decree of foreclosure in the main suit,)t was, amOJ;lg o.ther things, decreeq, .as follows: "That the a1;oresaid:deCl:ee. and thisdecree"shaU be so construed as that all claims and interventions now pending inthis cause in this court,:and here.., tofore or hereafter declared by this court to be liens on said property prior in mortgages, and, all costs allowed by this ,c,ourt, shall be paid right ,to tJ,l.e, by said purchaSers, in addition t<,l all othe:i;suIns in said original decree specUi'ed." . , '. ., In the decree confirming the sale in the main suit, and adopted in this court, July 30, 1886, it is provided"That the purchasers shall take the' said property, and that it be recited in the deed that they do take the property, subject to, and that the said purchasers assun1e i andpay 'off,. any and all debts, claims, and demands, of what·' soever nature, now pending and undetermined in either of said courts, in which original and aI\cUlary bills in this cause, are pending, which must be allowed or adjudged by this court, or either of said courts, where ancillary bills are pending, as prior to allY right secured under the said consolidatel1firs.t mortgage:" ';, From thes.e recitals it clearly appears what claims and demands ing in this cause in this oourt are charges upon the property sold, and are assumed by the purchasers at the foreclosure sale, to-wit, those claims and demands, pending herein, .that ,this court shall adjudge are prior in right to the claims of the mortgage creditors. Thereisauthdrity for holding-in fact, it is practically decreed by the supreme court of the United States-that debts contracted by 'a railroad corporation as a part .of the necessary operating expense for labor and supplies, or, for necessary eqtiipment or improvement of the mortgaged property, debts, entitled to be paid out of currf)nt income, if the mortgage trustees take possession, or if a receiver is appointed in a foreclosure suit. Fosdick v. SchaU, 99 U. S. 225; Burnham v. Bowen, 111 U. S. 776, 4 Sup. Ct. Rep. 675. And if current earnings are used for the benefit of mortgage creditors before current expenses are paid, the mortgage security is chargeable, in' equity, with the restoration of the fund which has thus been improperly applied to their use. General creditors oia railroad corporation, which includes those claiming damages for negligence in operating the railway, have never been held as having any privilege on the income of the property, much less on the Co711U8 of the property; but there are many cases to the effect that no such .privilege or equity exists. Davenport v. Receivers, 2 Woods, 519; .In re Dexterville Manuj'g Cb. v. Receiver, 4 Fed. Rep. 873; Hiles Receiver, 14 Fed. Rep. 141; Hervey v. IUinoia Midland Ry. Co., 28 Fed. Rep. 169; v.80F.no.13-57
Olyphantv.St.Louis Ore k Steel ;00.; Id.729j Central 7hMt 00. v. Wa-bash;St.;L.ct P. Ry. 00., ld. 871. . claim compan;r is for personal inJunes; groWil1 g out of the neglIgence of the company's agents more than 'pi,iQr to the ,suit for forecJosure; Neither on principle. nor to be prior in right to the authority can we adjudge such a gage bondholders. . Whether or not there may be cases growing out of the; cirliumstances attendant' uportthecreating of the mortgage, such. as the notorious bonding oftlie property for sums largely in excess of its' cost value, in which the mortgagors operating the road ought in equity and good conscience to De held as the :mere agent of the 'nlortgage bondholders/it is' not necessary to decid-e'iii this case.
J. Ifaving'satwith on the hearing of case, I concur both in the reasoning and the conclusions of the foregOIng opinion.
and others'/). DANziGER and another. l
(Circuit Oourt, E. D. LouiBiana. January 18,1887.)
INSOLVENCy-TITLE OF SVNDIe-LoillsiANA LAW.
In Louisiana all the property and rights of property of an insolvent who makes a cession to the ,syndic.
2. PARTNERSHIP-PROROGATION OF. , . Where the extension or prorogation of a partnership is made during the life of the partnership, it cannQt b,e considered as the creation of a new partnership. '. B. PARTNERSHIP-PARTNEitm COMMENhAM"':"LiABILITY. A partner in commendam contributed $40,000 to the partnership funds. Be'fore the expiration of ..the partnership the term was extended. At that time aU the capital of the firm bad been lost, except $7,000 of the money advanced , by the partner in comme7l4am. . Held, that under Rev. Civil Code La., art. 2842; which limits the liability ofa partner 'in commendam to the sam which he agrees to contribute, the Jilartner incom'f!le1lliam was not liable the deficiency of $83,000; the extensIOn not being the creation of a new paI1nership, and there being, therefore, no agreement to furnish a further sum, or to make good the loss on the sum originally contributed., , '
In Equity. On demurrer. :The bill of complainants.in this case alleges that on the sixteenth of September, 1882,-DavidDanziger"being then a dry goods merchant in New Orleans"entered into partnership with Leon Godchaux, by which Godchaux became a partner in commendam, and advanced to said Danziger on $he business in his the Sum of $40,OOOithe said the law of to do. That own name, as he agreement of partnership was made for the term oftwo years, but before the.expiration thereof, ,on the eighth of May, 1884, they agreed to con1 Reported
by JosephP. Hornor, Esq., of the New Orleans bar.