CAnPEN'rER V. TALBOT.
CARPENTER V. TALBOT
(Oirc.uit Oourt, D. Vermont. January 17,1888.)
INJUNCTION-PRESERVATION OF PROPERTY-CHATTEL MOhl'GAGES-CONFLICTING CLAIMS.
A bill to enjoin foreclosure of two chattel mortgages on the same property showed no ground for enjoining foreclosure of the first, but showed that the bonds secured by the second were invalid in the hands of the holders. The answer of defendants claiming under the second mortgage was insufficient, and the validity of their mortgage was doubtful; but the use of part of the mortgaged property was necessary to its preservation. Held a proper case to enjoin the senior mortgagee from interfering with such part until his sale, and to enjoin the other defendants from foreclosing until further order.
In a bill to enjoin foreclosure of a chattel mortgage runninp; to trustees and securingbonds to be negotiated by the mort,e:agor, plaintiff alleged facts showing that the bonds issued were illegal, and invalid in the hands of the holders, who were seeking to foreclose through the trustees. The trustees answered, on information and belief, that the had waived the illeg'ality and ratified the bonds, and in like manner demed the facts. The bondholders were not parties, but mip;ht voluntarily have become such. Held, that the answer was not sufficient. 8. COURTS-FEDERAL JURISDICTION-VENUE OF OF MARCH 3, 1887.. lJnder the act of congress of March 3. 1887. a suit by a citizen of Ohio against citizens of Vermont, New York, and Maine, to enforce a claim to property in Vermont, is properly brought in the district of Vermont. 4. CHATTEL MORTGAGES-FORECLOSURE SALE-NATURE OF. A foreclosure sale by a public officer under a chattel mortgage is not a proceeding in a state court wIthin the meaning of Rev. St. U. S. § 720. providing that no injunction shall be gran ted by a federal court to stay proceeding's in a state court, except in certain instances. 3. SAME ENJOINmG FORECLOSURE - ANOTIlER SUlTON MORTGAGE SEOURING Where, in defense to II. bill to enjoin foreclosure of a mortgage, the pendency of another Buit in another jurisdiction to foreclose another mortgage securing the same debt is pleaded. but plaintiff could not. by defending the latter suit, have the relief obtainable in the former. the pendency of the latter is no bar to the former.
SAME-PLEADING-SUFFICIENOY OF ANSWER.
Plaintiff, claiming as assignee of a lease of personalty running to another as trustee, and to his successors., and not restricting the trustee's power to convey, in a bill to enjoin foreclosure of a mortgage on the property alleged merely that he had acquired the rights of both trustee and beneficiaries. Held a sufficient allegation of title in plaintiff.
In Equity. Bill for injunction. Suit by James W. Carpenter against James R. Talbot, Royce, and Bottum, to enjoin them from foreclosing two chattel mortgages. Under Rev. Laws Vt. § 1977, "the mortgagee" of personal property "may, after * * * condition broken, cause the mortgaged property * * * to be sold at public auction by a public officer. * * *" Under Rev. St. U. S. § 720. "the writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a state, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy." George E. Lawrence, for, orator.
F. G. Swiningron, for defendant Talbot. P. Redfield Kendall and JohnPtoilt, for defendants Royce and Bottum.
WHEELER, J. The orator is alleged to be a citizen of Ohio, one defendant of Maine, one of New York, and the others of Vermont. The suit is brought to enforce a cIainito real and personal property in Vermont. Objecti<>n is made. that the suit is not properly brought in this of March 3,·1887, (49th Congo 2d Sess.c. 373.) Seccourt under the tion8 of act of March 3, 18,75",which corresponds to section 738, Rev. St.,fl,od 'confers jurisdiction in such cases, is expressly saved by sectionp.ofthe actof1887. The orator claims as purchaser and assignee of a leasehold interest in the property from one Oharles L. Strong, trustee, to whom and his succesSorS the lease runs, without naming the ure of the trust, or any ce.%ui que trwlt" or assigns. , . It is objected that this shows no right to the property in the orntor. There is, however, no restriction on the conveyance of the leasehold es, tate acqllired by the lessee, ,and the bill alleges that the orator has acas well .as of the trustee. It is quired therigllts of the cestuis further objected that the names of the cestuis, or the nature of the trust, are 110t set forth, with facts to show how their interests have been acquired. But as the orator has, according to the allegations, all the interest conveyed by the lease, conveyed to him by the same, person (and in the same right) to whom the :lease runs, this would seem to be sufficient as those not'claimingunder either the trustees or the cestuis. The defen<,iant Talbot claims under ,a c1Jattel mortgage, against which the orator alleges,in substance, that it was paid in full. . This payment, except as to part, isurtequivocally denied in the answer. This fully ,the validity ,and justice of this meets the equity of .the bill as mortgage. This mortgage was; put upon· the property prior to the lease, and no grQund is left on which: the orator is entitled on this motion to of it by sale under the have that'defendant restrained from statute. The defendants Royce and Bottum are trU'ltees under a chattel mortgage made to them to seCure bonds of the maker to be thereafter facts showing that the ,bonds sold, by the maker· The held by persons seeking t08e11 the personal property by virtue of this chattel mortgage, through the trustees,were not lawfillly issued, and are not now valid in their hands. The trustees, who would not otherwise have knowledge of these facts, deny them on information and belief, and allege, in: the same manner; waiver of illegality, and ratification of these bonds by the mortgagor. This does not meet the equity of the bill. These bondholders are not made parties, and have not appeared; be made parties under the statute of the United they may, States before mentioned, or become so voluntarily. Rev. St. § 738; Act of March 3,1875, § 8. Besides this,waiver or ratification by the mortgagor might not bind subsequent; holders of the' property; and it is not clear that the statute of the state providing for chattel mortgages covers mortgages to secure bonds to be sold afterwards. Rev. Laws Vt. § 1967. Proceedings to foreclose another mortgage to secure the same bonds in
the court of chancery of the state are set up and relied upon to prevent this injunction. The pendency of e. suit inanother jurisdiction is no bar to proceeding in this, unless the same questions are involved, and the same relief can be had. puck v.Colbath, 3. Wall. 33.4. The orator could not obtain the relief sought by this bill in defending the bill for foreclosure. Of course, this court cannot impose any restraint upon the proceedings in that case. Rev. St. U. S. § 720. It is claimed that this statute prevents restraint of sale by an officer under a chattel mortgage, because that is .in .the nature of an execn,tion. Bllt that is not a proceedis wholly on the mortgage as ing in any court whatever. The a private contract. Tbesaleis to be made by a public officer, but not as an officer ofa court. Rev. Laws Vt. § 1977. A sale of the personal property for the full amount of the bonds claimed to have been issued and to be outstanding under this mortgage would, on the allegations of the bill, work irreparable injury to the orator, if it should ultimately appear that the mortgage, or any considerable part of the bonds, is invalid, or inoperative to hold the property against the orator. Upon these considerations, it seems that the threatened sale of the personal property upon this mortgage should be restrained for the present; especially as no considerable injury is likely to result to the defendants or the bondholders by such delay as will more fully develop the just rights of the parties. The statutes of the state giving the right of sale under such mortgages do not go beyond what is necessary for the exercise of that right. They do not give the right to interfere with the possession of the mortgagor and those claiming under him otherwise. Rev. Laws Vt. §§ 1976,1977. Interference with the use of the hoisting apparatus for the purpose of securing and preserving the other property may work unnecessaryand irreparable injury to that. Therefore it appears that such use should not be interfered with under the mortgage held by the defendant Talbot, until that apparatus is wanted for sale, and as the sale is advertised at the place of use, not until the time of f.ale. Let a writ of injunction issue to restrain the defendant Talbot, and all others acting under him by virtue of his mortgage, from interfering with the use of the hoisting apparatus therein described by the orator, at the place where it is now situated, for the purpose of preserving and securing other property, until the time of sale thereof under his mortgage; and restraining the defendants Royce and Bottum, and all others acting under them, .from selling the personal property described in their mortgage, until further order. The restraining order heretofore granted herein is hereby vacated. except as to so much as is in accordance with this injunction; and it is ordered that the orator file a cost-bond in the usual amount by the first day of next term.
WITTERS fl. SOWLES
(Circuit Oourt, D. Vermont. January 14,1888.)
INSOLVENOy--PREFERENCE&-LDKITATION OF Tr.ME.
Rev. Laws Vt. § 1860, provides that a conveyance made by an insolvent, or one in contemplation of insolvency, within four months before the tiling of a petition for inso!vency \)y or against him, made for the p,urpose of giving pref· erence to certain creditors, shall be void. In an action to set aside such a mortgage, it appeared.that, within three months after the mortgage was made, a petition was left with the judge to be acted upon when requested, and was not acted upon until two months later, at the instance of another creditor. , Held, that the statute contemplated immediate procedure upon the petition, and the delay in acting on, the petition at the instance of the petitioner took tJ1e conveyance out of the operation of the statute.
In Equity. For statement of facts,.see, Witter8 v. Sowles, 32 Fed. Rep. 758,765. Che.8ter W. Witters and Albert P. Cross, for orator. Willard Farrington and William D. Wilson, for defendants.
WHEELER, J. This cause has been further heard upon additional testimony taken since the former hearing in respect to the commencement of the insolvency proceedings. 32 Fed. Rep. 758,765. This testimony ,does not shoW' 'that the record is not true wherein it sets forth why process of notification was not issued, and the petition proceeded with. The record as made'shows that this was to await the pleasure of the petition·ing creditors' attorney; the testimony shows the same with at least equal ,clearness. Chapman v. Brewer" 114 U. S. 158,5 Sup. Ct. Rep. 799, has been cited to show that the delay was wholly immaterial. In that case the petition in bankruptcy appears to have been filed October 10, 1873; the attachment there in question, to have,been made January 12,1874; and the amended petition, which raised the question, March 5, 1874. The attachment was after the original petition. and within four months before the amended one, and was invalid, whether the adjudication should be held to relate back to the one or the other. What was said and decided about it related to a question was made that the record did not show that the petitioner filed any proof of a claim ,or of bankruptcy; as to which it was said that if the district court had jurisdiction of the subject-matter, and the bankrupt appeared, and the adjudication was correct in from, it was conelusive of the fact decreed. The adjudication and assignment referred in form back to the filing of the original petition; still it was not said that this was conclusive of the question about that. And in that case, so far as appears, the record did not show anything about the delay, more than to state what was done, and when; while here the record shows that the petition remained without further proceedings, because of the control of it retained by the petitioner's attorneys. The petition here is shown, both by record and