MERCANTILETRU$T <;:0. ". MISSOURI, K. &: T. BY. CO.
among the stockholders. From the performance of this duty we cannot relieve them. Their situation is rendered embarrassing by the stances stated in the petition, and we wOt\ld; relieve them if we had the power to do 50, and could thus exercise it with propriety. Relief may be found t,hrough.application tocongre$S. '
K.& T. Ry; Co. et aZCo.
fl. EAST LINE
FIDELITY INSURANCE,' TRUST & SAFE DEPOSIT RED RIVER R.Co. et al.
'(CircUit dourt, N. D. Texas.' June 6, 1890.)
1. FBDBRAL A1'fD BUTE COtrRTS,....,COlllFLIOTING.JURISDIOTION-BAJLWAT FOREcLosURE. . . '
An interstate railway company purchased a small road lying entirely within a state, the whole system, including the new purchl).$e. After several years, suit to foreclose was brought in the fe1leral circuit court, and the whole, property Wllos placed in the hands of a receiver. In ,the mean time, b)t . p.l'9ceedings in the state court, thA. charter of the. lIt.!'te road was declared forfeited, and a receiver of its property appointed. This receiver then petitioned the fedemlcourt for, possession, alleging that the sale of the road was ultra vires andvold, and that tberefore, the federal court had no jurisdiction. Held, that this merely raised the IInestiou as to the validity of the sale, which question could properly be tried in the federal court, and hence it would retain possession. The fact that the mortgagees of a' priOlo mortgage, which was placed upon the state road before its sale, had intervened in tbe federal court for the protection and enforoement of. theirfrior, Uen, was also a sufticient ground for retaining jurisdiQtionand possession 0 the road. · ' . 'l'he.fact\llat the state etatutes provide for.the payment of the corporation's debts after its charter is forfeited, and for the distribution of its assets, does not give the state courts exclusive jurisdiction; since these directione will be complied with in .the federal courts.
B.B.um";'FOLLOWING STATE LAWS.
In Equity. Petition by W. M. Giles, who was appointed receiver of the East I"ine & Red River Railroad, in a proceeding in the state coqrt of Texas to forfeit its charLer, to obtain possession of the road as against receivers appointed by the federal court. Petition denied. Alexander & Green and E. EUery Ander80n. for Mercantile Trust Co. Ja'fM8 Hagerman, for receivers of Missouri, K. & T.Ry. Co. Simon Sterne lind Charles F. Beach, Jr., for Missouri, K. & T. Ry. Co. John O. BulliU. and Samuel Dickwn,: for Fidelity Insurance, Trust & Safe-Deposit Co. R.C. 1ibBter" for East Line &,Red River R. Co. SaW1* .for W. M. Giles, receiver. Befort! M1Ll.ER and LAMAR, Justices, and PARDEE and CALDWELl., JJ. MILLER, Justice, (orally.) We have given this application our attentive consideration, and, as there difference of opinion among the four judges who have been asked to consider the case, there is no reason
vol. 48. This
is a petitIon brought by Mr. W. M. Giles, who is the receiver of the
stWtecourt in'l'ravis(lQunty, Tex., to obtain possession of a railroad and, itsappurtenanC,es constructed and lying within the state of Texas, which railroad is now:and has .for some time been .in the handa of the receivers of the circuit court of the United States for the district of Texas and of the circuit court of the United States for the district of Kansas. These receivers, who now have possession of the road, are the receivers under proceedings against what is called the "Missouri, Kansas & Texas RailwAy Company," \\'h&h. proceedings were. to foreclose large and extensive mortgage or mortgages upon that road. That road itself-at least in ,its running.connections, and in the control of lineS0f road which it had-commenced somewhere in the state of Missouri, I think, on the Mississippi river,' running south-westerly through the states of Missouri and Kansas, the Indian Territory, and through the state of Texas to the Gulf, practically the line of road known as the "Missouri, Kansas &Texas Itailway';l/ and owned 'by the company having that name. ' .Tube6,1888, a proceeding' was commenced by a corporation called the "Mercantile TrustQoIilpany I" whicb was the trustee oBhe mortgage/on all that road, to foreclose it for failure to pay installments of interest. 'That prooeedin the appOintment of receivers to take whole line oLroadabovementioned. Of course, as, the road lay in different ?istricts; same kind of'proceeding by which the action of the courts which might bave control oUhe road should be simultaneous an,d , Therefore the ord,er for the appointp,lent ofthese ceiverswas madein the circuit court of the United StatesJor tbe district of Katiaas and in the circuit court of the United Statt's for the district of Texas. Those proceedings, in the course of t'YP or. three years, cuI-: decree, which was rendered within the last two or in the cir'cuitcourt fprthe distd.et of (36 three 221, 41 Fed. Rep. 8,) and which was also rendered in the circuit court for the district of Texas, the. property to be sold to pay the mortgage which, was the foundation :ofthe original suit. It is not material to go intb that decreefurtber than to say tliat the, mortgage whicH was sought to be foreclosed covers also a road in Texas called the" East Line & Red River Railroad," and this was ordered, by the decree which has beeni fu1;ntioned, to be sold as a' part of the property of the Missouri, Kansas & Texas Rallway Company, in satisfaction of the bonds given with themortglige, which include\:i thatroad among all the other property of the mortgagor; This East Line & Red Ri ver Railroad Company was a corporation organized by the state of Texas, and bad built a road, or mostly built it, about 150 iniles long, exclusively within the state of Texas, and which company attempted to make a sale of its road to the Missouri, Kansas & Texas Railway Company. It;didmake such sale, so far as a form of contract and conveyance, by use of words and instrumentalities to :inake conveyauce, could <io so. . It is denied by the'petitioner in thiS case that it had the pdweror anthority to make such a sale, and it'iadenied that the Missouri, KansaS'
to delay the decision in order to deliver a well-prepared opinion:
MERCANTILE TttUST CO. 'V. MISSOURI, K.& T. RY. CO.
This piece of road, it should be observed,was bought before the Mercantile Trust Company's mortgage was made, which is in process of foreclosure now, and in which suit this application is made by way of intervention. We are not inclined to say decisively whether the two roads had the power to make this sale and transfer or not. We do not think it necessary, as that question is not raised in the case before us. It is very clear that the Missouri, Kansas & Texas Railway Company, for seven or eight years before these foreclosure proceedings commenced, had possession of the road, which it had bought. It is very clear that it thought it had made a valid purchase of that road. It is very clear that neither tbat railway company itself, nor any of its stockholders, are known to have made any objection to that sale, or to have taken any steps whatever up to the present hour to set it aside; that original railway company or some of its officers were made parties to this foreclosure proceeding; they had an opportunity to contest the right of the Missouri, Kansas & Texas Railway Company to make this mortgage covering their road. They made no objection. The argument of the petitioner here is that because the sale of the Texas road to others was forbidden by the laws of Texas, or was withQut aufficient authority under those laws, therefore the circuit courts of the United States, in the proceedings for foreclosure of the mortgage of the Missouri, Kansas & Texas Railway Company, were without any jurisdiction over that piece of road, or over the mortgage which covered this property. .We think that that is a mistake. Every suit which is, erroneously brought on the supposition that the plaintiff is entitled to the property,. and' that the defendant·is not entitled, would, according to that rule, be. without jurisdiction. Suppose suit is brought in for a piece afland. The defendant says, "You cannot sue me; I don't own the land; you have no jurisdiction over me." ,Who would'listen a moment to any objection of that kind? It is the business of the. court to determine whether a lawful claim is set up or not, and the trial of that question cannot be defeated by simply saying, "You have no right to the property ,youclaim; you have no right to sue me for it." Take these principles as applied 'to the case before us. The Missouri, Kansas. & Texas Railway Company has had possession of the road for many years. It mortgaged that l'oad. The parties to whom it was mortgaged advanced their money on it. They seek to get their money back by a suit for foreclosure of that mortgage. The Missouri; Kansas & Texas Railway Company does not deny the jurisdiction of the court. The East Line & Red River Railway Company does not deny the jurisdiction. But a third person comes here and says, "You have no jurisdiction over this case because the Missouri, Kansas & Texas Railway Company never owned this road." The reply is, "That is the very questiontobe tried; that isthe thing in issue here. If the Missouri, Kansas & Texas Railway Company, or any one else interested in it, or anybody having a right to represent it, chooses to contest it, here is the place to contest it." The plaintiffs say, "We have taken a valid mortv.48F.no.5-23
& Texas Railway Company had the power to buy.
it." The Missouri, Kansas & Texas Railway /Company says, "Xes,we owned the road and it." The other company says nothing. But, put it in the best possible position. Suppose that the East Line & Red River Railroad Company should then set up in that cause the very thing which the applicant here now sets up,-that it never sold its road. What is to be done about it? Would the court dismiss it for want of jurisdiction? On the contrary, the court would have jurisdiction to try,thatquestion, and it would try it. That is the only answer on that branch of the subject that we choose to make to the application here, in which iUs proposed, in this short and summary way, to take the property out of the hands of the officers of the courts of the United States on the ground that those courts had no jurisdiction. Itseertls, to be contended by courisel on the one side that those courts hadnojurisdiction, while the counsel on the other side say that it had. We: are very clear, whatever may be the rights under the original sale, that the circuit court of the United States for the' district of Texas had jurisdiction of that case, has jurisdiction of it now, and will have jurisdiction until these proceedings are ended in some way. There isonother objection to the application which is clearer than that. Whatever may be the difficulty about the sale of the road and its effect upon the jurisdiction of the court, there is no 'question that the Fidelity Insurance, T,rust & Safe.Deposit <Jompany of Philadelphia had a valid mortgage on this piece of road before it came into the hands of the Missouri,'.Kansas & Texas ,Railroad Company, and, as the first mortgagee, has the first equitable right to that road or to have it disposed of for the payment of its It is shownthatthat debt has all become dueFl/f8t,beoause the interest was not paid according to the contract, and, BeCQnd, because the trustees or owners of the bonds exercised their privilege of declaring that all the prillcipal was due for non-payment of interest, so that the whole sum is now duei and that road, if it stood alone, is liable to the proceeding instituted by the Fidelity Company to foreclose its mortgage and secure its' debt. That company, finding itself in that position, with its debt due, none of its interest paid, and its property about to be sold under another mortgage later in date, bestirs itself to protect its rights. It finds tb,e ,railroad, which is its security, in the hands of the receivers of the circuit court of the United States. It finds that the company whioh made the to it is insolvent. It is useless to sue that company. Its remedy is a proceeding to hold that road which the petitioner is seeking to have placed in his hands for the debt due to the Fidelity Company. Not one of us has any doubt as to the proper course. They cannot fly in the face ofauthority. rrhey do not want to sue the Missoqri, Kansas & Texas RailwayCompanYi it has nothing. They do not want to sue' anybody who has no control of or interest in the company. So we must say the present petitioners wisely oome to the court which· has possession of· the property, and ask to be permitted to intervene for the protection. of their rights. The Fidelity Company do not want the property taken out of the possession of this court, and turned over to Mr. Giles,the receiver in the state court suit.
MERCANTILE,TRUST CO. ".MISSOUltI, K. &: T. RY. CO.'
They resist that, because they feel that the property is safer where it is. They have security in the decree which has already been rendered, that on the sale of that property their priority of right will be recognized. They are therefore satisfied, and do not want to be .turned over to the state court, which has made no such and with which they ha.ve nothing to do, and never had anyihing to do. Therefore we think it very clear that this road, being in the hands of reoeivers, and those receivers having, by the express order of the court appointing them, powers extending to the protection of the rights of the Fidelity Company, cannot be taken out of the hands of those receivers for the purpose of turning it over to the state jurisdiction, which has not recognized antsuch rights as seem in some way to pertain to the oWlier of the property. These are the defenses, properly speaking, to the petition of the tiff. We are agreed that the plaintiff has no superior right or authority to the possession of this property, even upon his own showing, to the rights as established by the proceedings in the circuit court of the United States. Under the judicial proceedings in the state courts against the corporation called the" East Line & Red River Railroad COmpany, II in a quasi criminal proceeding to forfeit its charter rights, to clear it away as an in,;, cumbrance of the ground, we regard it as having no longer the authority which the state had once given it to build a line of railroad. Mr. Robertson's language may he as strong as he chooses to put it, so far as that railroad company is concerned, to show that it has been rendered as dead as possible, and we have no doubt that has been done. But when it is urged that under the statutes of Texas, which give this right to pursue a corporation,and take away its charter, and put an end to its corporate existence, there is also coupled with that right some instruction about what is to be done with the property of the company, and what is to be done about its debts, and that, therefore, that jurisdiction with regard to those debts, with regard to the disposition of its property and with regard to the rights of its stockholders and of its creditors, is an exclusive jurisdiction,-when all this is urged, you cannot, therefore, oust other courts that have jurisdiction, and especially if they have commenced proceedings and taken possession of the property. because we may aiso, in addition to declaring the charter forfeited, dispose of its assets. With regard to questions of that kind, cases have been before us so often that it is hardly worth while to cite authorities. There is hardly a state in the Union that does not provide for the administration of a dead man's assets in a particular court, an orphans' court, a surrogate's court, or under whatever name the court may be established. Those are the courts invested with the power of administering upon the estates of decedents, and there is never any difficulty about them, with reference to any other court having jurisdiction, except that in some cases chancery has ancillary jurisdiction. But suppose a man who lives outside of the state where these surrogates' courts are established says, "I am the owner of that piece of property which you are seeking to administer upon; I bought it and paid my money for it; and, although
the IXlaD who is dead may have. been in. possession under claim of title, yet it, is mine." Is he bound administration of the surrogate's court? .Has he no remedy? Must, he stand by and let .thatcourt do WP/tt it will? Is he bound to sul:>mit his rights to that probate court? Manifestly not. We have decided in a.half a dozen in,stances that he can, CO:J;X1.e to the courts.oftha Un,ited ,States, and asse,rt any right that he has" :provided the law.for the 3<hninistration of the, estate, as prescribed ,in, the statutes 9f..the state, ,be observed. That law is as cara., ble and.' likely to J:>eenforced correctly in the courts of the .United States as ,in the courts Qf the state. Aside, therefore, from "qllelltions about priority of dates, ,whether the receivers were appointed in these cases before proceedings were had in the Texas courts to dissolve the corporation, We of .opinion that the circuit courts of the Unite,d States had jurisdiction of tha question of the foreclosure of this mortgage, ,of th,e right to sell that propel.'ty in satisfaction of debts, and that (the nature of the proceedings in the state courts of Texas gave no superior rights to those courts to interfere and have the property withdrawn .from their exclusive jurisdiction. The result of all these consideratiqns is that wa are of opinion that the petitioner makes no case which authorizes the circuit court of the United States in Texas to turn over to him the property which he, asks. His petition to that effect must be dismissed. , Of CollPS6 it is. proper to say that, while four judges, have taken part in this h,earing, this wall done by req\lest of counsel, and that the decree of judgment can only become valid upon its being entered by the judge holding, ,the properoourt in the circuit court of the United States for the district of Texas., It seemed, however, to be the wish of counsel, and of Judge and of Judge CAJJDWJ;DLL, that they should have the benefit of the judgment of all the ju.dges in the two circuits (the fifth and eighth.) where this property is found and in whose courts it is held, and they s.hould all· un.ite ill hearing this case. We are glad to aay that our.opinion is unanimous, and at the proper time that Judge PARDEE 'Vllill properly have .entered an order denying the prayer of this petition·.
RAND V. UNITED STATES.
(.DI.strict Court, D. Matne. Nov(mber 28, 1891.
UNITED STATES COMMISSIONERS-FEES-RES JUDICATA.
The rejection by a district court of a United States commissioner's claim for fees because of a supposed want of jurisdiction is no bar to a subsequent suit therefor, when the circuit court, in a similar: case, has held in favor of the jurisdiction.
S. SAME-DoCKET FEES-RETROACTIVE LEGISLATION. . The clause in the deficiency act Of August 4, 1886, (24 St. 274,) which declares that
United States commissioners shall receive no docket fees, being general legislation, intended as an amendment to Rev. St. U. S. § 847, that clause must be held prospective only in its operation, and docket fees earned prior to its passage must be al· lowed.
SA-ME-PRELIMINARY EXAMINATION OF OFFENDERS-FEES FOR RECOGNIZANCES.
Rev. St. § 1014, declares that the examination of persons charged with offensll!l against the United States is to be conducted agreeably to the usual mode of process in the state. Rev. lilt. Me. c. 133, §§ lOJ 11, provide for taking the recognizance of an offender upon any adjournment of tne examination. Hel,d, that a United States commissioner examining offenders in Maine is entitled to fees for taking their recognizances from day to day. Fees for such recognizances must be allowed, although the instruments exceea the length arbitrarily fixed by the comptroller as sufficient, when, upon inspection, they disclose no unnecessary verbiage. Persons arrested upon a complaint charging one offense cannot be held thereunder if the examination discloses a different offense, and therefore complaints cannot be objected to as too long because of charging more than one offense. Commissioners are entitled to their per aWm fees pending the preliminary examination of an offender, even tllOugh no witnesses are examined and no arguments heard on some of the days. U. S. v. Jane!.) 10 Sup. Ct. Rep. 615, 134 U. S. 483, and U. S. v. Ewing, 11 Sup. Ct. Rep. 743, 140 u. S. 142, followed.
SAME-LENGTH OF RECOGNIZANOES.
5. SAME-LENGTH OF COMPLAINTS-CHARGING DIFFERENT OFFENSES.
6. SAME-PER DIEM FEES.
7. SAME-FEES FOR RECOGNIZANCES OJ!' WITNESSES.
. Commissioners conducting preliminary examinations are entitled to fees for recognizances of witnesses fr!Jm day to day, and fOT final appearance at court, as well as fees for the acknowledgements thereto, but only for one recognizance in each instance for all the Witnesses;. and the length of such recognizances must be left to the commissioners' discretion. Commissioners are entitled to fees for entering returns of warrants and. sum· mons, for filing complaints and warrants for commitments from day to day, and for the return of proceedings to court, /lond copies thereof, the same not being unlleceBo sarily prolix. .
SAME-RETURNS AND COMMITMENTS.
When a prisoner is transferred from state to federal custody, a new warrant is necessary, and the commissioner is entitled to a fee therefor.
At Law. Petition by Edward M. Rand for allowance of fees as a United States commissioner. Judgment for petitioner. Edward M. Rand, pro Isaac W. Dyer, U. S. Atty.
WEBB, J. This petition is for the allowance of fees as commISSIoner of the circuit court, which have been rejected by the comptroller of treasury. As originallypref'ented, the. claim amounted to a total ()f $409.85. Subseqnent amendments made under recent decisions ofthe supreme courts, in respect to fees of various officers, have stricken .out leaving only the sum of$247.10 to be items