TOMMEY V. SP.tRTANBUBG &''!.1I1rlllVILLE B. 00.
offiC'erbappens to bave obta-ined such knowledge. 'Assuming that the matters inquired of are, as' stated by plaintiff's <lOun.. sel, dealings in which he iwas.,agetit for'those who are now stockholders or beneficiaries'df the company, and which dealings were part of the process of bringing that company into life, yet there is no precedent for this bill, as a bill of discovery, against the defendant Osborn, and to sustain it would, I think, be going beyond the recognized limits of this excep· tional rule, and beyond ,the reasons on which the rule' is founded. See Story Eq. Pleadings, (9th Ed.) § 235, notes, and cases cited. ,Demurrer sustained.
(Uircuit Oourt,' W. D:
'.: ...i .
Claims lab'or p,edormed iii'tlie , struction of '<a railroad sulllseqtien't'to ilie execution of a mortgage' the road will, not be allowed; .except as postponed, to the rilottgago debt, and or D,ot mechanics' or laborers'liens have peen, filed in the pIoper court. " ' , . ' , Conttacts made priotto the the mortgage, and work' :done thereunder, oreate no lien superior to that of the mortgagk ' 'c Claims.of Md laborersfO'i' labor performedin-the, COil'"., struction of a railroad s,uQsequent to of a mortgage on the road, to secure Its bonds, will not beallowed,except as t.o the bondholders, notwithstanding the Wotk wasperforined and a mechanics' or lq,borer8' lien.filed in the proper court before 1iheregis-' · tration of the mortgage iu tb,e state where the labor is performed the lien filed. . ,
. . .:
In Equity. This was a bill filed by complainants for themselves, and in behalf of all other holders of the "first mortgage 7 per cent. gold bonds" of the Spartanburg & ABheville Railroad,
-Reported by Thomas M. Pittman, Esq" of the Charlotte, N. C., bar.
the & Asheville Railroad Company, J. B.Cleveland,and W. H. Inman, trustees named in the mortgage, and .Rice & Coleman, Fry & Deal, E. Clayton, and John Garrison, creditors of the Spartltnburg & Asheville Railroad, as contractors, laborers, and· material men, for the foreclosure of the mortgage to secure said bonds. ·The defendant corporation was formed by the consolidation of the Spartanburg & Asheville Railroad Company, of South Carolina, and the Greenville &French Broad Railroad Company, of North Carolina, July 31, 1874. The. stockholders of the SpartanLurg & Asheville Railroad Company, August 9, 1876, adopted 8. resolution in regard to placing a on the road, which was followed on the same day by the adoption of a similar resolution by the board of directors. The mortgage, securing bonds to the amount of $670,000, was executed October 1, 1876, by the president affixing the seal of the company, and signing, & Asheville Railroad Company, by D. R. Duncan, President." W. K. Blake signed it as secretary and treasurer of the company, and W. H. Inman and John B. Cleveland, the trustees, also signed it and affixed their seals. Afterwards, but prior to September 28, 1878, two of the directors affixed their hands an.d seals. This mortgage was duly registered in Spartanburg county, South Carolina, June 20,1877. The master finds tht the mortgage was duly registerEldin Buncombepounty, North Carolina, November 25, 1878; "in Henderson county, North Carolina, November 23,1878; in Polk county, North Carolina, November 22, 1878. Six hundredand forty-twothOlisanddollarsoHhe bonds passed out otthe hands of the company; $4,500 becoming the property of plaintiff V. R. Tommey. Six hundred and fifteen thousand dollars were held as· collateral. The mortga'ge provided that the whole amount of the bonds should faU due upon default in the payment of intereRt for six months. Def,ault was made, upon which this suit was b'rought. Fry & Df}al entered into a contract with the Spartanburg & Asheville Railroad Company, June 2,1877, to build four trestles on the line of the road ip Polk county, North Carolina, and the work
completed June 17, 1878. Fry' was a and worked himself on the trestles, and superihtended the labor. The firm furnished the materials. They knew at the time the work was done of the existence of the mortgage. They filed 3, 1878, their lien in Polk county, North Carolina, for $6,335.16, and on October 16, 1878, instituted proceedings in the superior court of that county to enforce their lien. John Garrison contracted, June 2, i877; to build" Mill Creek Trestle," which he completed about the seventeenth of Feb· ruary, 1878. He filed a lien in Polk county, April 2, 1878, and began an action to enforce it,August 10, 1878. Garrison was a mechanic, and did some of the work, but his principallabor was as a contractor, to superintend the mechanics and laborers employednnder him. T. G. Williamson was one of the engineer corps of the company, and was due $911.40 from March, 1878. He filed his lien in Polk county, June 4, 1878. There is a balance due Rice & Coleman for work' done since October 1, 1876, of $22,935.23, from ¥ay 1, :1.878. Coleman was a stockholder in the company, but was not present at the meeting which authorized the mortgage. They knew of the making of the mortgage, and receiyed, after Octo- ' ber 1,1876, about $62,000, in county bonds and cash, from the company, on this contract. While engaged in grading the road they bought the land over which about two miles of their contract extended, and the neglected to have the right of way through the,Ja,nd condemned according to law, they 'assert titles to the road-bed and superstructure on their land. E. Clayton was a stockholder of the com, pany.' Thereis due him the sum oh$3,316.87, for work done on the South Carolina division of the road befor-e' August, 1876. Another contract was made with himp#orto October of $23,661.25 'from ' 1, 1876, on which there a balance November 1, 1877. He was present at' the'meeting' which authorized the mortgage, and did' not vote against it. ',' He claims title toa portion of the road-bed and'superstructure', similar to that of Rice & Coleman. " The twO' last-natlled parties claim statutory liens. The cemmissioD.erll-of Bllncombe" county 'Were stockholders, and became' pai:'til!ls 'dMl:!tularit.
Chandler J: Thompson, Bynum J: Grier, J. H. Rion, and Mr. B1'own, for complainants and trustees. Evans, Bobo J: Carlisle, Shipp J: Bailey, J. H. Merriman, T. Coleman, W. J. Montgomery, and M. E. Carter, for defendants. BOND, C. J. This is a bill filed by the mortgage trustees and the bondholders, by the mortgage against the defendant corpora,t.ion and others, to-wit, creditors of. the de. fendant corporation claiming mechanics' liens and statutory liens for labor done on the Spartanburg & Asheville Bailroad, to foreclose the mortgage and sell the road pursuant to the terms of the mortgage. The case is.for final hearing upon the pleadipgs, eyidence, report of the special and exceptions to his report. The material facts reported by the master are not controverted, and are these:
The Greenville & French Broad Railroad Company was incorporated by the legislature of North Carolina, February 13, 1855, a"1d the Spartanburg & Asheville. Railroad Company was incorporated by the of South Carolina, February 20, 1873, and the two companies were consolidated under the name of the Spartanburg & Asheville Railroad Company, July 31, 1874, under the general laws of the two states, and the new company thus formed is clotheq with all the rights which were originally conferred upon the separate companies. The defendant company thuS' organized commenced to build its road from Spartanburg, in South Carolina, to Asheville, in North Carolina, and, having expended its assets, the stockholders resolved, on the ninth day of August, 1876, to issue and sell bonds to the amount of $670,000, and to secure their payment and interest on them by a mortgage upon the consolidated road. The mortgage was duly executed by the company on the first day of October, 1876, and the bonds to the amount of *642,000 were sold or hypothecated, and came into the hands of the plaintiff holders and others for value bona fide. The third section of the mortgage, which is filed as an exhibit, contains the conditions of it and the powers granted to the trustees, mortgagees thereunder. It was not seriously contended in the argument that the defendlint company had not power to make the mortgage, or that the conditions had not been broken at the commencement of this action.
The master. so finds, and his report is hereby confirmed. The .defendant creditors claim that they, as contractors. and laborers, have a lien upon the road prior and superior to· the bondh()lders, and are first entitled to the proceeds ·of the is sale of the road, if the court should decree a sale. the principle question in the case. These claimants are of two>
TOllMEY V. SPARTANBURG & ASHEVILLE R. CO.
classes: First, those who have filed in the proper court "mechanics' and laborers' liens;" second, those who have not filed such liens in the state courts,· but claim a lien by ute. Of the first class are Fry & Deal, John Garrison, Rice & Coleman, and T. G. Williamson, whose claims are fully set out in the master's report. These claims, we think, ought not to be allowed, except as postponed to the mortgage debt. It is not necessary, in our opinion, to argue whether or not these lien claims are filed under the provision of the state law. In each case the work was done and the lien filed subsequent to the execution of the' mortgage; but we think the statute upon which the claims are based does not apply to railroads. Battle's Revisal, c. 65.· No case has been cited where any court in North Carolina has held that such a lien was within the purpose or meaning of that statute, although the statute was passed in 1869-70. The act does not mention railroads as the subjeGt of such liens, and the intimation of the supreme court of North lina in Whitaker v. Smith, 81 N. C. 340, is the other way. It was there held that the statute gave a lien to "mechanics and laborers" exclusively, and that an "overseer" was not a laborer, and reference made to 8 Pa. St. 168, where it is held that an engineer is not a "laborer." The first class of claimants filed their liens as contractors. They are not, in our opinion, mechanics and laborers within the meaning of the North Carolina law as held by its supreme court. The second class of creditors referred' to in the master's report do not claim a lien under chapter 65, Battle's Revisal, as the other lien claimants have done, but they do claim that by virtue of chapter 26, § 48, Bat. Rev., all the debts due them, and all contracts with the corporation at the date of the execution of the mortgage, were liens prior to
""Section 1 of the statute provides that" every building built, rebuilt, repaired, or improved, together with the necessary lots on which said building may be situated, and every lot, farm, or vessel, or any kind of Jlroperty not lMrein enumerated, shall be subject to a lien for the paymeut of all debts contracted for work done on the same, or materials furnished."-[REP.
_ _ _ _ _ _ .
the mortgage.- Theile debtsJ at the date of the mortgage, October 1, 1876, have been paid, except the sum of $3.316.87, due E. Clayton, with interest from August, 1876, and some smaller sums, all of which are Eltated in the master's report. We do not think that under that section the claimants have any lien. We are of opinion that the statute eontemplates debts already incurred and contracts executed at the time of making the mortgage. It has been suggested to us by counsel, since the argument, that the case of Brooks v. Ro,ilway Co., 101 U. S. 443, has an important bearing upon this case; but we think the. supreme -court of Iowa held, as we do now, that a railway was not a within the meaning of their mechanic's lien law, in Nelson v. The Iowa Ry. Co., construing section 1855 of the Code of 1860, which resembles the North Carolina statutes, and ,reversed their judgment after the law, was ,amended. So far as the claim of E. Clayton is concerned, we think the master's report must be confirmed. The land was purchased by him after the commencement of the construction of the railroad, with full knowledge that it was to pass over it, and indeed while he was constructing the railroad over it. He is in a court of equity for relief, and he must do equity. The master reports that he is not damaged' ahd he will be allowed nothing. And the same iatrue of the land claimed by Rice & Coleman. We see no reasol1'for disturbing any of the findings of the master relating to the claims of W. H. Inman, and his report is confirmed, and a decree, will be passed in 'accordance.with this opinion.
See In re Kelly, 5 FED. REP. 846
*The statute provides" that all debts and contracts of any corporation, prior to or at the time of the execution of any mortgage or, deed of trust by such corporation, shall have a first lien upon the property,rights, and franchises of said corporation, and shall be paid off or secured before such 'lIlortgage ot'deed of trust shall be registered."-[REP.
WALKO V·. FLINT.
WALKER t1. FLINT
January 3, 1881.)
(Oircuit Oourt, E. D. Missouri.
A jurisdictional question cannot be raised by a motion to dismiss, except where the want of jurisdiction appears on the face of the record.
Where facts not of record have to be shown, the question should be brought before the court bv a plea in abatement.
JURISDICTION COURTS. lNTEIlFERENCE BETWEEN STATE AND FEDERAL
State and federal courts cannot lawfully interfere with each other where each is acting within legal limits.
4. SAME-CUSTODY 011' PROPERTY.
A federal court will neither interfere with property in the lawful custedyof a state court, nor tolerate interference by a state court with property in its custod)·.
6. SAME-PROPERTY NOT LAWFULJ,Y IN CusTODY 011' STATE COURT.
An insurance company built a house partially On its own land and partially upon that of A., without A. 'sconsent, and leased it to B. & C. Thereafter the company was dissolved by a decree ofthe state court baving jurisdiction, and all its property vested in D., the state super. intendent of insurance. B. & O. thenattorned to D. A. and B., C., and D. were citizens of different states. After the attornment to D., A. brought suit against B., C., and D., in the federal court, to recover possession of the property of whicl1 he had been dispoBSessed. Held, that the federal court was not ousted of its jurisdiction by the attornment of B. & C. to D.
Ejectment. Motion to dismiss. Sansum et Jones. for plaintiff. CaN' et Reynolds, for defandants. TREAT, D. J. Thisis an action of ejectment, in which the plaintiff has set out with great particularity his deraignment of title, through proceedings in partition, to which the Life Association of America became a party. The final decree in said partition suit allt:>tted to the plaintiff the premises in dispute. Said decree was entere.d in June, 1877, and duly recorded. In July, 1878, .theLife Association of America destroyed the fence previously erected by plaintiff along the diviSIon line of the lots assigned to him by the decr.ee in partition