OpenJurist

8ftel'fIa -W'ltebUred byeh importer wbetethere has been fonl1amerital errol' $i:t:;6illog;the\1alue, it dues not'lieern to be, provided fOl ualler the adminiBtta.U fe' 'Motion to diBIriiss granted.

&: r.n.Co. dal.". WJr.STRl,m

,<VtreuU . , "

BTA'I'l'T1tS' ,

ALABAMA d

,

ai.

qfAPPeaZt,JW'CWcuc&' .TUlle

"Nq.89. ' " '

,OJ'FEDBIUL

e. 1892.)

, :,TlIe circuit ciOUrt batino jurisdiction of a blllin equity to inIbject the property of , an corporation \0 the l!ay,D).entof, a siJ;llple contract debt In advance of re-

, covery of a Judgment at auchdebt Is unsecured by lien or lDortl\'age. t.bougha ',tatestatut.e Imthon&el the bringing 'of luch luit by any three credi.wra of oorpol'at1pp,;

Judge.

Court of U,nited States for the Westem ofOeOJ,'gia. Western, Railwl,ly Company of Alabama and others against. the: & Florida Railroad Company and others. A the jurispictionW8iJ ovenuled, and defendant railroad company Reversed. ' .' (Th08.J.S¢rrvmu, of counsel,) for appellant. , McCQroucx, .Circ,*· J udges,and LoCKE, District Division

.

01 Ule SQuthern

the

Ju(1ge. The appellees, corporations, respectively, of the .0f,Alauama, New Jersey, brought this suit in the Swtes circuit court tb.esouthern district of Georgia corporation, and the Central against the apllfllant railrqad, Trust COplpany New Yor!t, a New york corporation, on three separate simple contract deLtsn,ot $t:!curedby a lien or or put in jUdg"lellt at law,. held by the appellee!!. respectively. Thf'Y charged that the appeUnnt railroad\fas inso}veIlt, and was aLout to put out an issue of second .'mortgage bonds for purposes and on a scheme that would work an injurY,to the III as unsecured creditors, and they asked for the appointment of a receiver and lor an injunctioll. The Lill was IJresented to one of the judges of the circuit c.ourt ior the southern district of Georgia, the appeUnnt's plea to the who, a'lter notice to the parties and jurisdiction of.the court,and proof9ffereJ, held that the court had jurisdiction, and appointed a r{!ceiver, and granted a preliminary injunction as prayed for in the bill, from which oruer t11is appeal is taken, nnder section 7 of the act creating this court. The bill alleges that the Atlanta & FloricJa RI.l.U.rqud Company at the time the bill was aeutt:u, a reshlllnt u!'the lIuutheru of Geurgia, and was a corpo-

a

ATLANTA &ll'. B. CO. 17.'WESTEBN BY. CO.

791

ration duly,chartered under tbe laws of Georgia.. The i appellant pleaded that it was a resident ofthertortberndistrict of Georgia, and that it was not a, resident of the souther.n district pf Gc;lorgi8o; that it, was "a corporation created under the laws of Georgia, and a resident of the county of Fulton, state of Georgia, by reason of the fact tbat its principal place of business establisbed by its ,¢harter is in said Fulton county, which said comity, is not withln' the jurisdiction of the circuit court of the United States for the southern district of Georgia." The appellant filed with its petition for appeal the following assignments of errors: "(I) That the court erred in holding the plea to the, jurisdiction filpd by this defelldant insufficient; and in the same; (2) that the court erred in holdinJt that the shllwingmade by this defendant against the granting of tbe injunction was insufficient; (8) that the court erred in holding, upon tbe facts presented, that the injunction should be granted &8 prayed for.," , 1heat>pellant has filed in this coun additional assignments of errors, as follows: "(1) The plea to the jurisdiction aet forth on pages 80 and 81 of the transcript should have been sustained because of the residence of the appellant & Florida Railroad Company tn the northern district of Georgia. the (2) The court cannot entt'rtain jurisdiction of a suit in eqUity to subject the of recovery of a property of the defendant company, [appellant,] in jUdgment at law, to the pa)'ment of a simple contract'debt, when said debt is not sl'curedby a lien 'or mortgage, because. under the constilutlon,the defendant is entitled to a trial by jury. (3) The conrt erred in granting an injunction to a simple contract creditor withollt lien or mortgage, anll thereby prior to judgwentinterfering wiLh the possession of the property of the debtor." In his oral argument counsel for appellant suggests that the errors assigned in this court are only a clearer statement of the errors in the assignment of errors attached to the petition for appeal, and appellees' counsel lay no stress on the matter of the additional assignment of errors filed here. We will,therefore treat this additional assiKnment as a olearer expression of the assignment of errors filed in the court below, and consider the errors assigned as if they had been filed in due time in the circuit court. It is settled by the decisions of the United States supreme court that the appellant, being a corporation created under the laws of Georgia, is, from its creation through the whole period of its existence, a citizen of that state; that it is a person within the meaning of the law regulating the institution and conduct of suits, and that it cannot emigrate .from ,the state of its creation; and, being found in Georgia, it may well be taken to be a resident of that state. But whether, like the state govit resides at every point within the boundaries of the state, or its residenoe is limited to th!' places where it does business, or td the place dAsignated in its charter as its principal place of business, must depend on the lawl general orparticular,giving and governing its life; and, ifits residence is not coextensive with the state, an issue' of, fact

792'

J'EDERAL REPORTER

vol. 50.

The record iii this case does not disclose whatiproof was introduced by complainants, (appellees.) It says: "Upon' the close of testimony for the complainants lntroduced in the abovestated case, on the hearing ofapplicatioil for appointment of a receiver, and thf! granting of injunction in accordance with the prayers of the bill. the defendant the Atlanta. & Florida Railroad Company introduced in evitlence the original charter of the Atlanta & Hawkinsville Railroad Company, of date the 9th of 'JUly, 1886, signed by the Hon. Henry D. McDaniel. then governor of the state of Georgia, and attested' by N. C. Barnett, secretary of state, by which,tlieprineipal place oibusiness of said company was llxed at city of Atlanta, in the county of Fulton, in said state. Said defendant also called the a,ttention,of· ,court to act of the general assembly of 1886, found on page theGeorgia Laws of that year, and the act of the general assem1887, found on page 238 of the Georgia blyof the,state.of Georgia of year, ,by WhiQh t1)e name of the Atlanta & Hawkinsville RailrOl'!odqoJll:Pfny was changed to ,that,of ,the Atlanta & Florida Railroad Company.: Upon introducing this testimony the said defendant closed. The court thereupon ruled that it did have jurisdiction of the above-stated bill, and the ,application for.theappoihtulent of a receiver, and the granting of injunction, and did have the jurisdiction to appoint a receiver and grant an injunction,which it then and there, did ,by formal order. "'1', It, sufficiently appears from the printed briefs and oral argument of counsel thatthe;appellarit railroad is in operation in the s.onth,ern'districtof Georgiil,and that while Atlanta, "ihichjs named in itS \tsp'dncipal plagEl qf business, is in.the northern district, t1Wpripciplil pf its completed and projected ,roael is.in the southern district. access.to the organic and statute law of the various states,andthough wetnaybe charged with judicial knowledge of them, and they db not have to be proved as a fact, it is proper, if not necessary, that counsel should embody in their printed briefs, or append thereto, eXBctcopies of the provisions of the state laws on which they rely, or to which they refer in argument. We find it stated in the brief of appe,Uant's counsel that Code Ga. § 3402, provides that" all .civil casesin law shall be tried in the county wherein the defendant resides," and that section 4183 provides that" all bills shall be filed in the countywhere(?) the residence of one of thedefEmdants against whom a sulistantialt,relief is prayed," and that "the constitution of Georgia in section 16, par. 3, is in the same language as contained in the foregoing section4183.'I;'aragraph 6,sanie section of the constitution of Georgia, is the sanae as contained in section of Code 3402." From the same brief we quote that Code Ga. § 3406, ,provides: .. All raHromi companies sbaUbe liable to be sued In any county in which the cause of'action: originated, by an)" one whose person or property has been i,ndul'ed by ,rH;ilroad' companY,itheir ofilcers. agents" or employes, for t1)e purpose of,recqvering damages for such injury, and also on all contracts (D,lade or) to performed in the wherein tbe is brought."

arises 'which requires proof.

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'.

'

II

I

This provision of the Code of Georgia the supreme court of that state has deolaredto he not in violation of the constitution. Railroad, etc., Co. v. Oaks j , 52 Ga. 410. Apd the argument seems to have force that when the constitution provides that suit can only he brought in the county

ATLANTA & F. R.

RY. CO.

193

oBhe defendant's residence, and a constitutional law says that a railroad may be sued on some causes of action in any county where it inflicts an injury, or makes or agrees to perform a contract, that this law must give the railroad a. residence in each county where anyone of these things is done. And if, for any purpose, the appellant by the laws of Georgia can be sued on certain causes of action in some one of the counties in the southern district of Georgia, it can only be because, by the constitution and ll,lwS of Georgia, it has a residence in the said district as well as in the northern district, where its principal place of business is fixed by its charter. And if it has a residence, for any purpose, at any point within the southern district of Georgia, its liability to suit in the national courts in that district cannot be limited by the state law qualifying its liability to suit in the state courts, but must be determined by the national law fixing the place where suits may be brought in the national courts. We say this argument seems to have force. But in view of the fact that this is an appeal from an interlocutory decree granting aninjunction, and the further fact that the proof introduced by the appellees is wholly omitted from the record, we would hesitate to decide the question raised by this assignment of error, even if our view of tpe second assignment did not render it unnecessary for us to announce more definitely on this first assignment. Can the circuit court entertain jurisdiction of a suit in equity to subject the property of appellant, in advance of recovery of a judgment at law, to the payment of a simple 'contract debt, when said debt is not secured by a lien or mortgage? It will be found that the case Terry v. Anderson, 95 U. S. 628, cited bY,appellee, by no means answers this question in the affirmative. The bill in that case was against the trustees and stockholders to enforce against the stockholders of the insolvent bank the liability of said stockholders for the unredeemed bills of the bank, some of which bills complainants held. Demurrers, not distinctly raising the question we are considering, were sustained, and the bill dismissed, and, in delivering the opinion of the court affirming the decree of the circuit court, Chief Justice WAITE says: "The complainants are neither of them judgment creditors of the bank. In a suit instituted by the assignees to close up the assignment. they proved their claims, and the amount due them was found for the purposes of a divi· 8ion. The finding was sufficient for the purposes of distribution, but it has none of the characteristics of a judgment or decree, to be enforced as against anything but the fund which the conrt W88 then administering." At a subsequent day of the term, in overruling a petition for rehearing, he used this language quoted in the brief ofappellees' counsel: "Ordinarily a creditor must put his demand into judgment against his debtor, and exhaust his remedies at law, before he can proceed in eqUity to subject choses in action to its payment. To this rule there are, however, some exceptions, and we are not prepared to say that a creditor of a dissolved (lOrporationmay not, under certain circumstances, claim to be exempted from its operation. If he can, however, it is upon the ground that the assets of 1 he corporation constitute a trust fund which will be administered bl& court

791
,

not permit ,a trust "to t'all ,

.

s. 148, appelor the certain lallds alleged-to heen fraudulently obtamed' from the raIlroad to "bf jiidgfnellts·. bilI was d!smissed on .. Th.e questidnweare' DOW COllsldl;Jrmg was' not m the case, iltt,d . of Judge BRADLEY'Sopini.bn, quoted by does Mt touch the-question as to'the'appellees here to bHng the bill' they have exhibited against appel1aIjUi·' ···. , ' ; . ' . ,"'.,. . , , ' " second,paragraph of thesj111ilbus in the rep6i'tPf the case of Mel v.lroo Works, 131 U. 8.353, 9 Sup. at. Rep. 78t,' which appedrs to sustain the contention ohppellees. In the of this ·\CIt is, the furnace company could not rightfully oftlQ'!ityto retnuv.., this lit>n, inllumbrance until !t had, hY, its ,suing out exhausted ,,.{t!ne, Y. Green, lWlj.lf. ;330; Weel,v. Wtmton, 115 Its legal 6 Sap; 'Ct. ·Rep.' 22·. But th'atwas one of the questions nece&Baryto be dllter'm1ned in brought by that company, and any error In notlauflborize even the same court, in an·original.Independ. ent. BUit, to trel\t the as void. '. ,.... ,'" In the we take of the case, It Is not ,te of of ,these proposi. tions; for, en'pn.ellusly rulE'd upon any of the-m, its decree could not i'ealiop llssailed in a collatel:/it proceeding as void for want of ..' · ., .

lNt

or

be

And .wetnke.it that thesuprem:ecourt in this case expressly did not decide we 'S;l'e.no\V considering. We understood counsel forappe!lees·tosayin his. oral argument that this bill was exhibited in stri<:tconformity'witllastatute of Georgia' which provided. that, in cases of, insolvent corporations, any three oreditors might su,e for the relief these appellees,eeek. 'We have not been furnished a reference to the section ot the statute, and we have not been able to find it in the edition of the&dewehave eumined; butvQSsumingthat .we correctly under:8tood counsel, we:sugge8ttllat;tomake such statute applicable to the ciJ;c\titcourt, thei'three creditors bea creditor to these:appellees tlxhibits a ClaIm of only $23.6.72.· ; Jlut we arepf opmlon.tlJatthe statute referred to. aid the jurisdiction of the' circuit court. ' i"ltithe case Qf Scott 140 U; 8. 106, 11 Sup. 'Ct. Rep. 712, a statute of Mississippi, Whichatlthorizell creditors in advance of judgment 'to sue for the relief sought in that case, waS greatly relied on to support jurIsdiction; through Mr. Justice FIELD, in say: . . \CW,hatever control the state mayelterclse over proceE'dings In its own courts. SQch a union of legal and equitable. relief in the same actiou is not allowed.in.the prac\,ieeof the ft:deral courts."',

795
And anera very thoronghandcriticitl discussion or: the question the opinion concludes: ,:', , "ltfollow8 from the views expressed that the court beloweouldttot take jorisdiction oUbie Buit, in, which a claim properly cognizable :only at law iI uoit.edio til8 s/ip;ae ,pleadings witb a claim for equitable relief.", ' And so,must we say in this case. Therefore the dE!Cree the injunction m\l8L be reversou,and· the injunction awl i' is iO or<le.n:1i. '

GltANT

(C'reu(t

at".

EAST

&: WEST R. Co.d al.

CC¥Wrt of .Appeall. F1,fth CircuUo lIa180. No.4IL

I.'

A.PrBALAlILB' DBCBBB-DISKI8SAL 0-. AUXILIARY BILL-RBT4I1fIH C""US. POll MAllTII1t'.

An original blll was filed for the purpose of foreclosing a railroad mortgage. A.. a=l1Iary and dependent bill was then filed agalnllt complainant In the original btU, the railrbad, and otbers, charging that certain bonds aecl1red by the mortgage were iDvalld, and not entitled to benefit under the mortgage; Held, that a decree disIt to a master to mlsslnj{ the auxiliary bi1l, but retaining the cause, aod ascertain tbe priority and validity of liens ontbe mortgaged subJect, and marllhal conflicting claill1s to the bonds In question. W8ol1 4nal as to the a=i1iary complainants, and ODe from which they might appeaL

Appeal from the Circuit Court of the United States for the Southem Division of the Northern District of Alabama. Suit by Grant Bros. against the East & West Railroad Company of Alabama and others. From a decree for delendantB, plaintitfa al'peal. On motion to dismiss the appeal. Denied. Wager Swayne, for the motion. A. O. King and J. J. Spalding, opposed. Before McCORHICX, Circuit Judge, and LocxJ:, District ludge. l\lcCoRHJCX, Circuit The American Loan ct. Trust Compnny of New York, in June, filed its bill to foreclose the consoliuated first mortgage of the East & West Railroad Company of Alabama for· the equal benefit of the bolders of the bonds secured by said mortgllge. To this bill the railroad company and James W. Schley and Joel Brown were made defendants. On the 26th of July, 1888, Grant Bros. had leave to file. an auxiliary and dependent bill against the complainant in the ori¢nal bill and the railroad and William C. Browning, Edward F. Browning, Eugene Kelly, John Byrne, John Hull Browning, and Amos G. West. This auxiliary bill was presented in behalf ofcomplainants therein. and all other bondholders Similarly situated, afld charged that complainants and others were the innocent purchasers for value before maturity, and without notice of any defect in said bonds, of a considerable number thereof, and that 966 bonds, in which the defendants named in their bill claimed some interest or ownership, were invalid and illegal, and .not entitled to benefit under said first consolidated mortgage. The defenaantB to the auxiliary bill answered'individually, and the whola suit proceeded in the usual manner, and came on to be heard on the 22d of OctolJer, 1891, "upoa