Изображения страниц

making the order, very properly attempted to put Compton in a position where he would not suffer from a sale in advance of the decision of his rights. That this was the motive and intention of the court may be clearly inferred from the circumstances already stated, and from the language of the following recital in the decree, by which the saving clause is introduced:

“And the defendant James Compton having in open court, on the final hearing, objected to the rendering or entry of any decree in this cause at this time, on the ground that the issues raised by the amendment to the complainant's amended and supplemental ancillary bill, and to the cross bill of the cross complainants Solon Humphreys and Daniel A. Lindley, trustees, and the answers of the defendant James Compton, to be filed herein, have not been tried and determined, the court overruled such objection; and the defendant James Compton duly excepts to such ruling, and the entry of this decree. But it is adjudged and decreed in the premises that the rendering and entry of this decree in advance of the trial and determination of such issues is upon and subject to the following conditions.

Express language could hardly be plainer than the implication from the foregoing italicized words that the clause about to follow was intended by the court to be a means of relieving Compton from the great disadvantage to which an early sale would subject him. In this light is the saving clause to be construed. The court said, in effect, to the mortgagees pressing for a sale, “the sale will be ordered, but as a condition, and for the purpose of preventing injustice to Compton, its effect shall be limited.” Shortly stated, the first paragraph of the condition provides that if Compton's Ohio supreme court decree, and the lien therein adjudicated in his favor, are found to be in full force and effect, then, within 10 days from the decree in his favor, the purchaser or his successor in title shall pay the full amount of the lien, and "in default of such payment this court shall resume possession of the property covered and affected by the said lien of the defendant James Compton, and enforce such decree as it may render herein in his favor by resale of such property, or otherwise, as this court may direct.” If this paragraph stood alone, it might well mean that the purchaser should take the property burdened with the Compton lien, if adjudged valid as a first lien, and that, in default of his paying it, the property should be sold again to satisfy it,-in this way giving it precedence over even prior mortgages. But the second paragraph clarifies the meaning of the first, and shows that the resale, if ordered, was to be a sale like the first, the proceeds of which would be applied to the mortgage and liens in the order of their priority. It provides, first, that, notwithstanding the sale, Compton's lien shall proceed to a decree which shall bind the purchaser at the sale in respect of any property affected by the lien. It provides, second, that nothing in the decree of sale shall be construed to be an adjudication against Compton, or “to prejudice, annul, or abridge any right, claim, or interest, or lien which the said James Compton may have in, to, or upon the premises hereby directed to be sold, or any part thereof, or in, to, or upon any property whatsoever embraced in this decree; it being the intention to hereby preserve the rights of said Compton in the relation in which he now stands towards the mortgagees, parties hereto.” The purpose which

[ocr errors]

is manifest in the first paragraph, and which is made to appear again
in the second paragraph, is that the person affected by this condition
inserted to save Compton's rights is the purchaser. It is he, or his
successor in title, who is to pay the lien, or give up possession. It is
he, or his successor in title, who is to be bound by the decree in
Compton's favor. The inference is irresistible that Compton's lien
was not to be transferred by the sale from the property to tho pro-
ceeds of sale. Otherwise the purchaser could not be affected by the
decree, for every obligation on his part would be discharged by pay.
ing and completing his bid. The further provision that nothing in
the decree of sale was to be construed to prejudice, annul, or abridge
any right or lien which Compton had in the property ordered sold is
another assertion that the sale was not to disturb Compton's lien on
the property. And the final clause only enforces the same purpose
by declaring that Compton's rights were to be preserved in the re-
lation in which he stood towards the mortgagees at the time the de-
cree of sale was entered, and before the sale. Taking the two para-
graphs together, it is reasonably clear that the court intended the
purchaser to take the property subject to Compton's lien, and, in
case the lien should be held valid, to have the option either of pay-
ing the lien off, or of permitting the court to resume possession, and
enforce Compton's lien by such remedy as it should deem equitable,
whether by resale or otherwise. If the purchaser should be of the
opinion that a resale free from Compton's lien would bring enough
more than the price at the first sale to pay the lien off, he would
doubtless prefer to satisfy it, rather than to permit a resale, or even
a redemption of the prior mortgages to which he would be sub-
rogated. If, on the other hand, he should think that the price at a
resale would not be increased over that at which he bought, in an
amount sufficient to pay Compton's lien, he would doubtless exer-
cise the option of permitting the court to resume possession, and to
resell, or to decree a redemption. The purpose of the court was to
give Compton the amount of his lien, or to restore to him the status
quo ante, at the option of the purchaser. Compton's relation to the
property covered by his lien was not intended to be changed by the
early sale. If the lien was not paid, he was to have the same remedy
against the purchaser which he would have had if he had not been
a party to the suit. The purchaser would acquire all the rights of
all the mortgagees whose mortgages were foreclosed, as well as thosts
of the mortgagor, and Compton's remedy was to be such as equity
would give him against the mortgagor and such mortgagees. The
character of that remedy must be determined wholly apart from
anything in the decree for sale, because the saving clause leaves it
entirely in the judgment of the court. The enforcement of the lien
is to be by resale or otherwise after the default and the resumption
of possession by the court. It seems to be clear that the word
“otherwise” is wide enough to include any other remedy than resale,
suitable to the case. If redemption is such a remedy, the court was
within the terms of the saving clause in granting it. Objection is
made that it was not necessary, before decreeing.redemption, for the
court to resume possession of the property, and therefore that the

"otherwise” could not include such a remedy, because it must have referred to some remedy to afford which possession by the court was necessary.

This is too narrow and literal a construction of the power reserved by the court. It would certainly not prevent a decree for redemption, if the court did take possession; and the provision that it should do so was not, therefore, inconsistent with a reservation of the power to make such a decree, if the court saw fit. In other words the saving clause simply remits us to the Ohio supreme court decree, to determine therefrom, by general rules of equity practice and jurisprudence, as they may be modified by local law, what relief should have been granted to Compton in the court below.

It is suggested for the first time in this court that the saving clause was not intended to prevent the transfer of Compton's lien from the property to the proceeds of sale, but that it was inserted merely to give the court power, in case Compton's lien should subsequently be held valid, to compel any purchaser who had paid his bid in bonds secured by subsequent and junior mortgages, as permitted by the decree, to replace the same with cash sufficient to pay Compton's lien, if the amount of the bid was large enough to leave a balance for application to that lien after satisfying prior mortgages. The decree for sale was approved by Judges Jackson and Gresham at Chicago, though it was formally signed by Judge Brown in the court below. Those judges certainly understood that Compton's lien remained on the property after the sale, and was not transferred to the proceeds, because otherwise they would have had no power to decree redemption in Compton's favor, as they subsequently did. The provision in the decree permitting payment of "bids in bonds, at the option of the purchaser, was wholly inadequate as a reason for the insertion of so elaborate a saving clause. The provision was that there should be paid in cash, of the price at which the property should sell, in addition to an amount required as a deposit at the time of the sale, such further sum as the court might thereafter direct. “The remainder of such purchase price may be paid either in cash or in bonds, with overdue coupons thereto appertaining, at such proportion or value as the holders thereof would be entitled to receive thereon in case the purchase price were paid by the purchasers in cash.” If the saving clause had been inserted in the decree to prevent injustice to Compton from this provision, it is impossible to explain why language was not used especially referring to the bond provision, and directing a substitution of cash for bonds by the purchaser. More than this, the purchaser was not obliged to pay in bonds. He was at liberty to pay cash, and yet the saving clause applies to every purchaser, whether he pays in cash or in bonds. Every purchaser was required to pay Compton's lien, or give up possession of the property to the court for a resale, or other remedy. If its purpose was as stated, why was not an exception introduced in favor of purchasers paying in cash? Take another instance, and the one which did occur, namely, that the bid should be paid partly by cash, and partly by first mortgage bonds conceded to be prior in right to Compton's lien. Compton, if remitted to the proceeds, could not have complained of the use of such bonds to pay the purchase price, and yet the saving clause, in its terms, is just as applicable to such a purchaser as to one who deposited bonds secured by a mortgage junior to Compton's lien. More than this, there was ample provision for securing the payment in cash of so much of the proceeds as would belong to Compton in other parts of the decree, and the saving clause, as construed, was mere meaningless surplusage. All questions of the disposition of the proceeds arising from the sales under the decree were reserved for future adjustment. The jurisdiction of the court over the property sold, and its right to take possession of it, was continued, after delivery to the purchaser, until all claims allowed or to be allowed against the property of the defendant company should be paid. And, in the order directing execution of a deed and the delivery of possession, express provision was made for the substitution of cash for bonds deposited as the court might direct, and a retaking of possession on failure by the purchaser to comply. In fine, the reference of the saving clause to a possible injustice from the permission to pay in bonds is strained, and fails to satisfy its plain language. It wholly overlooks the plain purpose of the clause, so manifest in the recital, at its beginning, to save Compton from the very great hardships of a sale before his interest was judicially ascertained. The clause was a reservation of Compton's lien from the sale, and a retention of it on the property sold. The deed directed to be made by the masters conveyed all the title to the described railroad, of all the parties to the suit, "except as particularly reserved in and by said decree of foreclosure and sale.”

Thus far, in this opinion, I have been expressing the views of the entire court. We are agreed that the saving clause of the decree secured to Compton the same right to enforce his lien as if he had not been a party to the proceedings. Judge LURTON and I are not able to agree upon the remedy which this construction of the saving clause of the decree should secure to Compton. Judge RICKS thinks that the questions upon which Judge LURTON and I differ are of sufficient importance and difficulty to require that they shall be certified to the supreme court, and therefore expresses no opinion upon them. In this conclusion the differing judges concur, and the questions will be certified. As it may be of some assistance to the supreme court to know the grounds of our difference, I now proceed to state my own views:

How may Compton enforce his lien in the court below? By resale of the Ohio Division, or by redemption of it, or by a redemption of the railroad from Toledo to the Illinois line, as decreed by the court below? These questions must be considered in three aspects: First, with respect to the rights of those who were parties to the Ohio decree; and, second, with respect to the rights of the Ohio divisional mortgagees; and, third, with respect to the rights of the Indiana divisional mortgagees. By virtue of the sale the assignee of the purchaser the Wabash Railroad Company acquired the rights of the Wabash, St. Louis & Pacific Railroad Company, and the mortgage rights of all the mortgagees whose mortgages were foreclosed in the court below. And it may be conceded that the questions above suggested are to be treated exactly as if the parties were present in this cause, because the purchaser may assert the right of each.

As against those who were parties to the Ohio decree, Compton had the right to a sale of the Ohio property subject to the Ohio divisional mortgages. This was the relief accorded to him by the Ohio decree. I do not think they can be heard to object, after that decree, to Compton's working out his remedies against the Ohio Division. It is pressed upon us that to allow Compton to divide up the railroad, against which he has an indivisible lien, is most inequitable, and that no court of equity should lend its aid to accomplish such a result. The power of this court to withhold such relief, though secured by the Ohio decree, is asserted on the principle laid down in Lawrence Manuf'g Co. v. Janesville Cotton Mills, 138 U. S. 554, 11 Sup. Ct. 402, that, where the aid of a court of equity is invoked to enforce or "piece out" (as the phrase is) an incomplete decree of another or the same court, the court appealed to may examine the justice of the decree sought to be enforced, and refuse its aid, if it finds the decree inequitable, or may impose, as a condition of its granting relief, any variation or limitation with respect to the operation of the decree which justice and equity may require. The decision in the case cited seems to be rested chiefly on the fact that the previous decree therein sought to be enforced was a decree entered by consent of parties, and not by the adjudication of a court.

a But, conceding the soundness of the general principle, it has application only to bills in equity to carry a former decree into execution, where no ordinary process on such former decree will serve, because of the neglect of the parties to proceed on the decree promptly, and the embarrassment of their rights caused by subsequent events. Daniell, Ch. Prac. (4th Ed.) 1585. It is only the defendant in the new suit who can call the former decree in question. The plaintiff never

Id. 1586; Robinson v. Robinson, 2 Ves. Sr. 225. The court ex. ercises the power because the plaintiff is voluntarily seeking aid for a decree, and so it may impose its own conditions in granting it. But such a doctrine, it seems to me, has no application to a case like that of Compton, who was brought into the court below against his will, and compelled to set up his lien, and required to work out his rights in this jurisdiction on penalty of losing them. Under such circumstances, he is certainly entitled to rely on the full measure of his rights, as then defined and adjudged by the decree of a court, in enforcing which he did not voluntarily seek the court below to aid him, and which he would not have set up in the court below until required to do so on pain of forfeiting every benefit it secured him. Added to this, the mode by which the court below acquired jurisdiction of Compton and his claim suggests reasons of peculiar force for not abridging in the slightest degree the rights adjudged to be his in the Ohio decree. The jurisdiction, as already explained, is ancillary and unusual. It rests-First, on the necessity for avoiding conflicts between courts for possession and control of property; and, second, on the duty of courts to prevent an abuse of their process. When jurisdiction is thus assumed by federal courts over controversies


« ПредыдущаяПродолжить »