MAVEn t1; DENViBD, T. &;

I

n. w. K. co.

128

MAnmetal.

t7. DENVEIt,T.

&.FT. W. B. Co. et al.

<9i'l'CUit Court, S. D. NeUJ Yor1c. March .l8, 18110.)
.. ]jlQU.TY-PARTlI\s-MoRTGAGES.

In a suit by the stockholders'of a railroad company to prevent a trullt ny, to whom a mortgage on the roa'tl' has been given, from delivering lIome'of the bonds secured by the mortgage, to have such bonds canceled, the trust compa. ny is a party to the controversy·

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.. REMOVAL Oll'C.AUSEs-REMAND.

. A defendant who has had a suit' removed from a state conrt on the ground that the,plaintifl'sarecitizens of a state ditlerent from all the defendants but lime, and that such defendant is only a nominal party, cannot resist amotion to remand on the. ground that the removing defendant is the real party plaintifl'l the ,controversy being, between him and the otherdefendanta, who are oitizena 01

In Equity. On motion to remand. for plaintiffs·. Wage.r $wa'!fll61 for defendants. W .J This isa ,to remanl1 this suit the state conn in which ,it originally and from which .it was the petition of the Denver, Texas & Fort Worth Railroad Company, one of the The. petition for removal that th,e pla,intiffs are residents' ofthe state of New. Yorlti that the Denver, Texas &: Fort Worth Railroad Company is a corporation of the state of defendant the Colorado & Texas QompaColoraqoj ny is a and that the Mercantile Trust Company 18.90 corporation pfthe state of New York, "but is a pominal any interest in. the controversy/' The there is a controversy in the suit which is petitiQndoes ,not state whollybetYrClen citizens of different states, and which can be fully deterthem. The question which has been.argued is erthe which is between citizens of different .states, aap w1;J.icb <;:a11 be fully determined without the presence the, Mercll:ntile Trust Company. Succinctly stated, the controversy is, iO/.lubstance, this: Tile rp.ilroad coIllpany shown by of bondll, Ilecured by a mortgage, to the trust com; has created an panyasatJ'pstee for the bondholders, and the in the pands oftPenustcpmpany, and ,the trust company, ;assuming to by, a.provision in the mortgage, is about. to tBe construction company. ,The provision ferred to is that these 1,000 bonds are to be issued by the trullt company "to be used upon the road-bed of Denver &Rio Grande Railroad Company," a railway line which is included in the mortgage. The plaintiffs are stockholders of the milway company, but the majority of the stockholders are also stockholders of the construction company, and control the railway company in the interest of the construction company. Under this control the railway company has made a corrupt bargain with the construction company, by which the latter is to be paid a large sum

to

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FEDERAL BEPQRTEB, I

voL 41-

of money without any fair equivalent; and this corrupt arrangement is about to De Consummated, by thetlelivery of the 1,000 bonds by the trust company to the construction company. The prayer for relief is that the, defendants be restrained; from parting with any of the bonds; that the bonds be delivered up to be canceled, except to an amount sufficient to pay ,for the object to which they are properly applicable; and that the mortgage be canceled so as tp reduce it pro tanto. To such a controversy the trust company would seem to be a necessary party. It is a trustee for the bondholders, and not merely an agent of the railway company, to do its behests in issuing the bonds; and as such trustee it owes the duty ofmaldng proper't1jsttibution of the bonds, and must see to it that they are not issued exoeptconformablyto the trust. Occupyirigthis position, the trust company has a right to be heard upon the question of the disposition which is to be made of the bonds, and an indispensable party to a controvetsy':in\vhich to 'dispose' of thp,m as it deems lawful is assailed. The relief prayed for' 'canri'ot,' be granted, unless it be made and retained a partYi because; as itwduld not be justified in !,!urrendering the bonds to be canceled which, under ihe trust, aretbbe used' foi-' specified 'objects, it' Clttniot be, bobnd 'by a decree teqIJiring that to be done itisri6t allowed,to,defend.' , ,'" i ( , ,'-'!' , ' ' The averment in the petition that: the trust company ilJonly a nll.! party is the averment of,a' legal eonclusion, ahd is overthrown by the facts which appear inthee8fuplaint, and tbe'naturedf the relief sought. It may bethlit thecause!ofactionbelongstothe'railroa.d pany, and that the suit is one! iIi which it"! real' relation to the versy is tha.t of a plil.intift'. But the removing defendant cannot be heard to assert that the rililr6ad':company is the real' plaintiff, When the parties' are arranged according'to tbeir, real interests'; 'because 'Us petition proceeds upon the ground, not-that the railroilHcon;pany , and the trust compimy are citizens of different states,' but upon' the' grOl;mdthat the plaintiffs and the railroad' cOI:Ppany' are citizens of different· sfRtesarid tbe trust company ought 'not tol:fe- a partyata:lt " A removing: ant may supplement the case made by his petition by a reference to the facts which appear elsewhere in the record; buqthas never been !decide4 that he, is at liberty to a,bandon the ground upon which his 'petition' ceeds, and assert an inoonsistent case, and it w6uldbe contrli:ry to the spirit of the present does not perroit a plaintiff t6 remove a suit, to permit a defendaritto, avail himself of the,! privilege and he isiD. faupon the theory that the suit brought in his 8Jity the plaintiff. , , ' , ; ,, :. ,. i'" The motion to remand' is " : . . ':
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SECOR ". SINGLETON.

725

et al.

SECOR

et al.

t1. SINGLETON

(Circuit Court, E. D. Mis8ouri, E. D. March 25. 1800.) 1.
EQUITY--8UPPLEMENTAL

A 'person wbo, after :final decree, acquires all the interest of one of the original partIes in the subject-matter of the litigation, may, if entitled to tbe benefit of the decree, as a privy in estate with him whose interest has been acquired, .file a supplemental bill to be substituted as a party. and to enforce the decree. A decree in an equity suit adjudging certain railroad property to be exemptfrom taxation for a term of years, and enjoining t1;le assessment of taxes thereon, is a de-, cree tbat reacbes beyond parties to the record, and binds as well privies in estate·.

BILL.

t.

a.

SAJI[lI-MORTGAGOR-MoRTGAGEES-PUROllASER-PRIVlES.

A purcbaser at a foreclosure sale is not a privy in estate with the mortgagor so as. to be bound by a decree affecting the mortgage premises, rendered in a suit between tbe mortgagor and tbird parties, begun after the mortgage was executed, and to which tbe mortgagee was not made a party. In such case the mortgagee: would not be bound by the decree, and a purchaser at the mortgage sale has all rights of the mortgagee.

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SAME-'-DEOREE-BETWEEN WHOM CONOLUSIVE.

Oertain' s.tockbolders of 'a corporation baving sued tbe the tax" Ing authorities of certain counties to restrain the former.from paying, and tbe lat-. tel' from .col1ec.ting, taxes on :the. p.roperty of the corporation on tbe groun.d t.hatit. . . . wa!!exempt,·and having o.btainedsuch decree, that corpGr.a1lion and ·tax-: ing authorities were adversary parties, though both were defendants in the SUit,. and that as between them the decree was a conclusive adjudication that the prop.Wty was exempt from taxation.

In Eql,lity. On to supplemental bill. The bill in ,this case recites, in substance, that Charles A. Secoret al.;· ina suit heretofore instituted by them in this court as stockholders of iheMissouri, Iowa & Nebraska Railway Company, obtained a final or.. ·der ofinjuDction restraining the railway company from pa.ying taxes on its properly located in Scotland, Schuyler, and Clark counties,Mo.,and restraining. the several counties and certain county officials from levying: and collecting. or attempting to levy or collect, any taxes on .said prop-· .erty prior to ,the year 1892; that thereafter the property of the railway to which the injunction related was sold under a decreefore--. closing a mortgage executed by the Missouri, Iowa & Nebraska Railway Company,iil the year 1870, and became by purchase the property of the Keokuk & Western Railway Company, the present complainant, _about the 1st of December, 1886; and that, since the last-mentioned sale, Scotland county has begun proceedings to enforce the collection of . . assessed against the property inquestioil while it was owned · by the Missouri, Iowa & Nebraska Railway Company. The prayer is that the suit in which the injunction was obtained may be revived in the name olthe .Keokuk & Western Railway Company, and that it may have the, benefit Qf the decree, in that proceeding. is demurred' S.cotllmd and Clark counties, and the county judges thereof; R.T. lfugMs' and H. S. Priest, for complainant., , T.S.,J{fYf!,tgcrmery llind. Sclwfield, for defendant Clark county· ./oh1J, C;,: M'?QrI1, .defendant . ::,;