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2. SAME-REVIEW-CONFLICTING EVIDENCE-PRESUMPTIONS.
Findings of fact by the trial court upon conflicting evidence are presumptively correct, and will not be reversed when not unreasonable in themselves or not clearly in conflict with the preponderance of the evidence.
Appeal from the Circuit Court of the United States for the Eastern District of Arkansas.
The material facts out of which this suit arises are as follows: On June 26, 1875, the appellant's testator, William H. Gaines, being in possession of lot sixteen (16) in block sixty-eight (68) of the city of Hot Springs, Ark., under a claim of ownership, leased the lot for one year, with the right of renewal from year to year, to Perry Huff. Huff occupied the lot under said lease until June 1, 1876, when the United States took possession of the lot as property belonging to the United States, ousted the then occupants, and subsequently leased the lot to Huff through the agency of a receiver appointed by the court of claims. On March 17, 1880, Huff sold all his right, title, and interest in the lot to Vina Granger, the present appellee, and to Eva M. James, the latter persons well knowing that all of Huff's interest in the lot was derived from the aforesaid leases from Gaines and from the United States. Subsequently the commissioners appointed pursuant to the act of March 3, 1877 (19 Stat. 377, c. 108), to adjust conflicting claims to land situated within the Hot Springs reservation, awarded to Perry Huff the right to purchase the lot now in controversy, and the latter purchased the same, and received a patent therefor from the United States. After the decision in Rector v. Gibbon, 111 U. S. 276, 4 Sup. Ct. 605, to wit, on May 23, 1884, this action was begun by the present appellants against Perry Huff, Eva M. James, and Vina Granger to compel them to transfer the legal title so as aforesaid acquired from the United States to the appellants, upon the ground that the legal title acquired by them from the government was held in trust for the appellants. A decree as prayed for was rendered by the circuit court against the appellee, Vina Granger, in April, 1887, the suit having been theretofore discontinued as against Huff and James. From said decree an appeal was prosecuted to the supreme court of the United States by the appellee. By the decision of the supreme court on such appeal the present appellants' right to the lot in controversy was established and confirmed, but the decree in their favor was reversed, because the account as to rents and profits had not been properly stated, and because the allowances in that behalf made were deemed inequitable. The decision of the supreme court is reported under the title of Goode v. Gaines, 145 U. S. 141, 154, 12 Sup. Ct. 839. The second trial of the case resulted in a decree against the appellants for $2,316.23, that being the sum which the master found had been paid by the appellee, Vina Granger, for taxes and for improvements made on the lot, and in obtaining a title to the land from the United States, over and above the sum justly chargeable to her on account of rents and profits. From the last-mentioned decree the appellants have prosecuted an appeal to this court.
U. M. Rose (W. E. Hemingway and G. B. Rose, on the brief), for appellants.
John McClure, for appellee.
Before SANBORN and THAYER, Circuit Judges.
THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court.
The present appeal presents but two questions for our consideration. The first is whether the master should have computed the rents of the property in controversy at the rate specified in the lease from Gaines to Huff of date June 26, 1875; and the second is whether the sum allowed by the master on account of rents was too small, even though the aforesaid lease does not govern in de
termining the rental value of the property. The appellants maintain the affirmative of both of these propositions.
It will be observed by reading the opinion rendered in this case on the former appeal to the supreme court of the United States (vide Goode v. Gaines, 145 U. S. 141, 154, 12 Sup. Ct. 839), that the first decree was reversed because the allowance in favor of the present appellants on account of rents was deemed excessive and inequitable, in view of the peculiar relations of the parties to the suit, and the cause was remanded to the circuit court solely for the purpose of having the rent account restated. The lease executed by Gaines in favor of Huff was described in the bill of complaint, and the terms and conditions thereof, as well as the amount of rent therein reserved, could not have escaped judicial observation. Nevertheless, no direction was given to the circuit court to cause the rents on a second hearing to be computed at the rate reserved in the lease, nor was any intimation given to that effect. After pointing out the circumstances that had given rise to the litigation, and after alluding to the fact that the defendants had not acted knavishly or in bad faith, the supreme court said, in substance, that the defendants ought not to be charged with the rents prior to May 23, 1884, that being the date when the suit was instituted; that they should simply be charged with the rental value after that date, and that "no increased rents should be allowed on account of the improvements." If the court had intended that the rents should be computed at the rate fixed in the lease, and that the lease should control in estimating the rental value, it is obvious that the clause above quoted from the opinion would have been entirely unnecessary. We think, therefore, that the decision directed the circuit court, in effect, to ascertain the fair rental value of the lot without reference to the rent reserved in the original lease, and upon that theory the circuit court evidently acted.
It may be well to observe, in support of the view which appears to have been taken by the supreme court, that, inasmuch as the appellee, Vina Granger, bought the lot in controversy from Huff in the year 1880, after the latter had been ousted of possession under the lease, and had attorned to the United States, the true owner, it is by no means apparent that any such privity existed between her and the original lessor, Gaines, as would, in any event, render her amenable to the provisions of the lease and liable for the rent therein reserved. But, be this as it may, it was clearly the duty of the circuit court to follow the directions given by the supreme court in the opinion delivered on the first appeal, and, having done so, no error was committed of which the appellants can be heard to complain on the present appeal.
With respect to the second question above proposed, it is sufficient to say that the evidence contained in the record is not of such character as would warrant us in overruling the finding of the circuit court, and the finding of the master as well, with respect to the rental value of the property in controversy. In Warren v. Burt, 12 U. S. App. 591, 600, 7 C. C. A. 105, 58 Fed. 101, this court said that where the trial court has considered conflicting evidence. and made
its finding thereon, the finding must be taken as presumptively correct, and must be permitted to stand, unless an obvious error has intervened in the application of the law, or some serious or important mistake has been made in the consideration of the evidence. To the same effect are the decisions in Tilghman v. Procter, 125 U. S. 136, 8 Sup. Ct. 894; Kimberly v. Arms, 129 U. S. 512, 9 Sup. Ct. 355; Donnell v. Insurance Co., 2 Sumn. 371, Fed. Cas. No. 3,987; Richards v. Todd, 127 Mass. 172. In the present case, we cannot say that the circuit court obviously erred in assessing the rental value of the property. The question was one with respect to which different minds might well entertain different views, and the testimony with respect to the rental value was conflicting. The conclusion reached by the circuit court is not in itself unreasonable, and is not clearly in conflict with the preponderance of evidence. It must, therefore, be allowed to stand. The decree of the circuit court is hereby affirmed.
LATTA et al. v. NEUBERT. SAME v. COHN. SAME v. RUGG (two cases). SAME V. GARNETT. SAME v. SUMPTER et al.
(Circuit Court of Appeals, Eighth Circuit. May 6, 1895.)
Nos. 451, 457, 458, 459, 460, and 477.
Appeal from the Circuit Court of the United States for the Eastern District of Arkansas.
U. M. Rose, W. E. Hemingway, and G. B. Rose, for appellants.
Before SANBORN and THAYER, Circuit Judges.
THAYER, Circuit Judge. These cases were submitted by counsel under a stipulation that they should abide the decision in Latta v. Granger (which has just been decided) 68 Fed. 69. In accordance with the stipulation, the decrees rendered by the circuit court are affirmed.
MANHATTAN TRUST CO. v. SIOUX CITY & N. RY. CO. (TRUST CO. OF NORTH AMERICA, Intervener).
(Circuit Court, N. D. Iowa, W. D. June 1, 1895.)
1. RAILROAD MORTGAGES-AFTER-ACQUIRED PROPERTY - LANDLORD'S LIENIOWA STATUTE.
The S. Ry. Co. made a mortgage covering after-acquired property, which was recorded in W. county, Iowa, on January 31, 1890. On January 21, 1890, the railway company took a lease of certain lands for depot purposes within W. county. Most of the rolling stock acquired by the railway company was shown to have been delivered to it before being used on such depot grounds, and none was shown to have been used there before delivery to the railway company. Held that, as to all rolling stock acquired after the recording of the mortgage, the lien of the mortgage attached immediately upon its delivery to the company in W. county, or upon its coming within that county, and before any lien could attach in favor of the landlord under the Iowa statute (McClain's Code, § 3192), giving a landlord a lien for rent on any personal property of the tenant used on the premises, during the term.
2. LANDLORD'S LIEN-LIMITATION-IOWA STATUTE.
The statute provides (McClain's Code, § 3192) that the landlord's lien shall not in any case continue more than six months after the expiration of the term. The lease to the railway company was declared forfeited for nonpayment of rent, pursuant to a power reserved in it; and proceedings to enforce the lien were not commenced until nine months after such forfeiture. Held that, if any lien existed, it had expired.
Whether rolling stock, used on a railway line, can be deemed personal property used upon depot grounds leased to the railway company, within the meaning of the statute (McClain's Iowa Code, § 3192), giving the landlord a lien on such property, quaere.
This was a suit by the Manhattan Trust Company against the Sioux City & Northern Railway Company for the foreclosure of a mortgage. The Trust Company of North America intervened, claiming priority for a lien asserted against the rolling stock of the railway company.
Strong & Cadwalader, for complainant.
SHIRAS, District Judge. This case is now before the court upon an intervening petition filed by the Trust Company of North America, and the question thereby presented is whether the lien of the Manhattan Trust Company, under the mortgage executed to it as trustee, is superior to the landlord's lien asserted under a lease of the terminal property in Sioux City, executed by the Sioux City Terminal Railroad & Warehouse Company to the Sioux City & Northern Railway Company, it being claimed that the landlord's lien is the first and paramount lien upon the rolling stock of the railway company used upon the leased premises. The question arises upon the following facts: On December 27, 1889, the stockholders of the railway company authorized the execution of a mortgage to the Manhattan Trust Company, as trustee, to secure bonds to be issued at the rate of $20,000 per mile of the contemplated road, and to cover all the property of the road then held or after acquired. The mortgage was executed, bearing date January 1, 1890; was acknowledged by the railway company January 22, and by the trust company January 27, 1890; and it was recorded in Woodbury county, Iowa, wherein Sioux City is situated, on January 31, 1890. The terms of the mortgage are comprehensive enough to include the property in dispute, and cover after-acquired property, authority therefor being found in the provisions of section 1966, McClain's Code Iowa, which enacts that mortgages or deeds of trust executed by railway companies "may, by their terms, include and cover, not only the property of the corporation making them at the time of their date, but property real and personal which may thereafter be acquired, and shall be as valid and effectual for that purpose, as if the property were in possession at the time of the execution thereof." The lien of this mortage, therefore, as between the mortgagor and mortgagee, attached to the rolling stock as soon as the same was acquired by the railway company. Thus it is said by the supreme court in Railroad Co. v. Cowdrey, 11 Wall. 459-481:
"Had there been but one deed of trust, and had that been given before a shovel had been put into the ground towards constructing the railroad, yet if it assumed to convey and mortgage the railroad which the company was authorized by law to build, together with its superstructure, appurtenances, fixtures, and rolling stock, these several items of property, as they came into existence, would become instantly attached to and covered by the deed, and would have fed the estoppel created thereby. No other rational or equitable rule can be adopted for such cases. To hold otherwise would render it necessary for a railroad company to borrow money in small parcels as sections of the road were completed, and trust deeds could safely be given thereon."
Pennock v. Coe, 23 How. 117; Jones, Mortg. § 153.
Thus it is made clear that the mortgage or trust deed executed to the Manhattan Trust Company became a lien as between the parties thereto, from the date of delivery, upon the property then owned by the railway company, and this lien attached to the afteracquired property as soon as the same passed into the possession of the grantor in the mortgage. The lien claimed on behalf of the Trust Company of North America is based upon a lease executed by the Sioux City Terminal Railroad & Warehouse Company to the Sioux City & Northern Railway Company of the certain premises in Sioux City, Iowa, which were used by the railway company for depot purposes. This lease bears date December 14, 1889, and was acknowledged by both parties thereto on January 21, 1890. It provided for the payment of a rental of $90,000 per year, payable quarterly, and it is claimed that, under the provisions of section 3192 of McClain's Code of Iowa, a landlord's lien exists upon the rolling stock of the railway company which was used on the leased premises, and that such lien is prior to that created by the mortgage. The section in question reads as follows:
"A landlord shall have a lien for his rent upon all crops grown upon the demised premises, and upon any other personal property of the tenant which has been used on the premises during the term, and not exempt from execution for the period of one year after a year's rent or the rent of a shorter period claimed falls due; but such lien shall not in any case continue more than six months after the expiration of the term."
Under the provisions of this section of the statute, it is the use of the personal property of the tenant upon the leased premises that creates the lien, and if the property, when such use begins, is then subject to another lien, as of a mortgage duly recorded, the latter is not displaced by, or subordinated to, the lien of the landlord. Jarchow v. Pickens, 51 Iowa, 381, 1 N. W. 598; Perry v. Waggoner, 68 Iowa, 403, 27 N. W. 292.
The stipulation of facts filed in this case shows that the larger part of the rolling stock in question passed into the possession of the Sioux City & Northern Railway Company before the same was used upon the leased premises, known as the "Terminal Grounds." The cars and engines were purchased at different places in other states, but in no case is it shown that the delivery thereof was made to the railroad company after the cars had been used on the terminal grounds. Delivery by the manufacturers of the cars and engines to other railway companies, such as the Chicago & Northwestern Railway Company or the Chicago, Milwaukee & St. Paul, was, in effect, a delivery to the Sioux City &