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the suit; his lien being, at all events, subject to the underlying mortgages
on the railroads which were consolidated to form the T. & W. Ry. Co. 8. SAME-RELIEF OF UNFORECLOSED LIENOR.
Held, further, that as C.'s Ohio suit had not been brought for the benefit of others entitled to the same lien, and such others would be equally entitled with C. to enforce it, it would be inequitable, as against the holders of the prior divisional mortgages, to order a resale of the Ohio Division free from such mortgages, even if such a proceeding were authorized by the statutes and decisions of Ohio, and that the only remedy which c. could have was a redemption from the divisional mortgages prior his
lien. 9. JUDGMENT-RES ADJUDICATA.
Held, further, that the question whether or not C. had a right to a separate redemption of the Ohio Division should be certified to the supreme
court. 10. MORTGAGES-REDEMPTION-NET EARNINGS OF PROPERTY.
Held, further, that the question whether or not, upon redemption, C. was entitled to have the amount of principal and interest of the mortgage debts reduced by the net earnings of the road or roads in the hands of the purchaser at the sale in the K. and J. suit, or his assignee, should be certified
to the supreme court. 11. JUDGMENT-RES ADJUDICATA.
Held, further, that the question whether or not, upon an appeal from the decree rendered by the federal court in K. and J.'s Ohio suit, a decree rendered in the federal court in Indiana, in the ancillary suit of K. and J., upon the same questions, and not appealed from, was res adjudicata
upon such questions, should be certified to the supreme court. 12. SAME.
It seems that, as against all parties to C.'s Ohio suit, the decree of the Ohio state court established conclusively that c. had a lien on the railroad of the T. & W. Ry. Co., which might be enforced against the Ohio Division alone, without regard to his remedies against the Indiana Divi
sion. Per Taft, Circuit Judge. 13. LIEN-REMEDIES.
It seems that, as against all parties to C.'s Ohio suit, he had the right to redeem the Ohio Division from the underlying mortgages without redeeming the Indiana Division, since such relief was incident to the relief by sale granted by the Ohio decree. Nor could the mortgagees in such mortgages object, since their debt would thereby be paid, and it was conclusively established by the Ohio decree that c. had an interest in the
equity of redemption under their mortgages. Per Taft, Circuit Judge. 14. EQUITY-DECREE-RES ADJUDICATA.
It seems that the determination of the Ohio court that the Ohio Division only should be sold was equally res adjudicata with the determination
as to the existence of the lien. Per Taft, Circuit Judge. 15. RAILROADS-CONSOLIDATION-EFFECT.
It seems that the lien impressed upon the property of the T. & W. Ry. Co. by its merger in the T., W. & W. Ry. Co. was a lien upon the separate equities of redemption owned by it in the property of the Indiana and Ohio Divisions, and that, as it might have redeemed separately, so
might the lienor. Per Taft, Circuit Judge. 16. MORTGAGES-PARTIES--TRUSTEES.
It seems that the fact that the trustees in two several railway mort. gages to secure bonds are the same does not make the mortgagees the same, in the absence of proof that the bondholders under che two mort
gages are the same. Per Taft, Circuit Judge. 17. Equity PRACTICE-ANCILLARY SUITS-IDENTICAL DECREE.
It seems that the several suits instituted by K. and J. in the several districts in which the road lay were to be regarded as distinct, and the provisions of the identical decrees entered in such suits as separately applicable to the portions of the road within the several jurisdictions, and, accordingly, that the trustees of the divisional mortgages had no right, in the suit in the Ohio district, to represent the interests of the Indiana
mortgagees. Per Taft, Circuit Judge. 18. SAME--DEFENSES NOT INTERPOSED.
It seems that, even if the consolidation which fixed the lien of the equipment bonds on the property of the T. & W. Ry. Co. also fixed a lien on the Ohio Division in favor of the bonds issued under the Indiana mortgage, for which the T. & W. Ry. Co. was also liable, the trustees of the Indiana mortgage could not therefore object to a separate redemption of the Ohio Division by C., since they did not set up such lien, or seek fore
closure under it, in the K. and J. suit. Per Taft, Circuit Judge. 19. COLIENORS-SEPARATE SECURITIES.
It seems that the trustees of the Indiana mortgages, while themselves asserting the right to foreclose the Indiana Division, to the exclusion of C.'s right to resort to it, could not object to O.'s enforcing his lien upon
the Ohio Division alone. Per Taft, Circuit Judge. 20. MORTGAGES-MORTGAGEE IN POSSESSION.
It seems that the assignee of the purchaser at the sale under the decree in the K. and J. suit, in which all the mortgages were foreclosed, should be regarded as mortgagee in possession under the divisional mortgages, and that C. was entitled to have the amount of principal and interest due upon the mortgages redeemed reduced by the amount of net earnings of
the Ohio Division in the hands of such assignee. Per Taft, Circuit Judge. 21. JUDGMENT-RES ADJUDICATA.
It seems that a decree in the suit instituted by K, and J. in the federal court in Indiana, adjudging C. not entitled to appropriate the Indiana. Division to the payment of his lien, though not appealed from, was not res adjudicata in the suit in the federal court in Ohio, as to his right to
appropriate the Ohio Division. Per Taft, Circuit Judge. 22. SAME.
It seems that the determination of the Ohio state court that the Ohio Division only should be sold to satisfy C.'s lien was not an adjudication that C. had separable liens on the Indiana and Ohio Divisions, and did not make his right to separate sale or redemption res adjudicata. Per
Lurton, Circuit Judge. 23. SAME-EQUITY PRACTICE.
C. having sought, after being made a party to the K. and J. suit, to have his Ohio decree, which had become ineffective through the seizure of the property by the federal court, enforced in the K. and J. suit, it seems that the doctrine of res adjudicata would not prevent the federal court from looking into the nature and character of the Ohio decree, and it found to be inequitable, under the circumstances, from refusing to award c. the remedy, by resort to the Ohio Division alone, which was awarded
him by that decree. Per Lurton, Circuit Judge. 24. LIENS-SEPARATE SECURITIES-REDEMPTION.
It seems that as C. had not made parties the other holders of equipment bonds and creditors equally entitled with him to redeem, as he should have done for the protection of the mortgagees subsequent to this lien, it would be inequitable to permit him to complicate the situation further by a partial redemption of the property subject to such lien, leaving the Indiana Division still subject to redemption by him or other cred
itors. Per Lurton, Circuit Judge. 25. SAME-RIGHTS OF SURETY.
It seems that as upon the consolidation of the T. & W. Ry. Co., with others, in the T., W. & W. Ry. Co., the former became surety to the latter upon its undertaking, by agreement, and under the statutes authorizing the consolidation, to assume all the debts of the T. & W. Ry. Co., including all the divisional mortgages as well as the equipment bonds, the T. & W. Ry. Co. had a right to object to the release of any part of the property primarily liable for such debts, and accordingly to a separate redemption of the Ohio Division by C., leaving the India na Division the sole security for the remaining debts, and that such objection could not
be avoided by C. 'on the ground that he had not made the T. & W. Ry.
Co. a party to the suit. Per Lurton, Circuit Judge. 26. MORTGAGES-REDEMPTION-TACKING.
It seems that, the trustees of the Indiana and Ohio divisional mortgages being the same, the mortgagees were to be regarded as the same; and all such mortgages having also been assumed by the same party, the T., W. & W. Ry. Co., neither that company, nor C., who derived his rights under it, could, in equity, be permitted to redeem one mortgage without
redeeming the other. Per Lurton, Circuit Judge. 27. RAILROADS-DIVISION--PUBLIC POLICY.
It seems that it is the settled policy of courts to treat a railroad as an entirety, and prevent its severance, where possible to do so, in the exer
cise of discretion. Per Lurton, Circuit Judge. 28. EQUITY PRACTICE-ANCILLARY SUITS-IDENTICAL DECREE.
It seems that the identical decree entered in the suits in the several districts was not solely valid in each, as affecting the property within the several jurisdictions, but effected a unit sale of the whole property in the
several jurisdictions, valid under each decree. Per Lurton, Circuit Judge 29. COLIENORS-SEPARATE SECURITIES.
It seems that the lien created by the merger of the T. & W. Ry. Co. in the T., W. & W. Ry. Co. was for the benefit of the bondholders under the Indiana divisional mortgage for any deficiency in their mortgage security, as well as for the equipment bondholders and other creditors, and that such bondholders, through the trustees, as well in the Ohio as in the Indiana suit, or the purchaser at the foreclosure sale, as equitable assignee of the mortgage debt, had a right to object to a separate redemption of
the Ohio Division by C. Per Lurton, Circuit Judge. 30. MORTGAGES-REDEMPTION-MORTGAGEE IN POSSESSION.
It seems that it did not appear that the assignee of the purchaser at the sale under the K. and J. decree was in possession of the railroad as mortgagee under a mortgage superior to Co's lien, and that C. was not
entitled to a deduction for net profits. Per Lurton, Circuit Judge. 31. JUDGMENT-RES ADJUDICATA.
It seems that the decree rendered in the Indiana suit instituted by K. and J., not having been appealed from, was conclusive upon an appeal from a like decree in the Ohio suit. Per Lurton, Circuit Judge. Appeal from the Circuit Court of the United States for the Western Division of the Northern District of Ohio.
This was a suit by James R. Jesup and Edward H. Dixon against the Wabash, St. Louis & Pacific Railway Company and others for the foreclosure of a mortgage. James Compton was made a party, to determine his rights under a lien asserted by him to part of the mortgaged property, and appealed from so much of the final decree as tixed his rights.
This is an appeal from that part of a decree in a railroad mortgage foreclosure suit rendered by the circuit court of the United States for the Northern district of Ohio which fixes the priority of a lien of the appellant, and prescribes the remedy for its enforcement. James Compton, the appellant, was a citizen of the District of Columbia. Holding equipment bonds issued by the Toledo & Wabash Railway Company, which subsequently became one of the constituent companies of the Wabash System, he obtained a decree from the Ohio supreme court (16 N. E. 110, and 18 N. E. 380) declaring them to be a valid lien on that part of the main line of the Wabash System reaching from Toledo west to the Illinois line, and awarding to him, as a means of enforcing the lien, an order for sale of the portion of the line lying in Ohio. Shortly after the entry of this decree by the Ohio supreme court, and before it was executed, upon the prayer of the complainant and a cross complainant in the foreclosure proceeding in the court below, and after the filing of the necessary affidavit, the court entered an order based on section 8 of the act of congress of March 3, 1875, directing that Compton be served with subpoena in the District of Columbia, and required to appear and set up his lien in this cause. The order was complied with, and Compton, appearing only for the purpose of objecting to the validity of the service, moved the court to set the service aside, and to dismiss him from the case. The motion was overruled. He then demurred to the jurisdiction on the ground that citizens of the same state appeared on both sides of the controversy. His demurrer was overruled. The amendments to the bill and cross bills concerning Compton denied the validity of his lien, and asserted that he was estopped by matter of record to claim a lien, because of a decree of the supreme court of the United States, to which he was in law privy, in the case of Railway Co. v. Ham, 5 Sup. Ct. 1081, denying the existence of a lien in favor of the equipment bondholders. Compton, in his answers which he filed after his demurrer was overruled, set up his lien as declared by the Ohio supreme court decree, and his right thereunder to have the Ohio Division sold to satisfy it. Compton also claimed in his answer that his bonds were a first lien upon certain terminals of the defendant company at Toledo, on the ground that the Ohio divisional mortgage did not cover this property. The court below adjudged that Compton had a valid lien on the Ohio and Indiana Lines, by virtue of the Ohio decree, but denied his right to a first lien on the Toledo terminals, or to a separate sale of the Ohio Line, and declined to afford him any relief but that of redeeming the four divisional mortgages,-two on the Ohio Line, and two on the Indiana Line,-by the payment of about $8,000,000. The sale under the decrees of foreclosure in the court below, against Compton's objection, took place before the validity and character of his lien were determined, and a provision was inserted in the decree saving his rights. Compton contended that the language of this saving clause entitled him to the payment of his lien by the purchaser, or, in default thereof, a resale of the Ohio part of the railroad. At the hearing of the appeal a motion was made to dismiss on the ground that the same decree as that here appealed from was entered by the United States circuit court for Indiana in a case between the same parties. This appeal presents the questions: (1) Had the court jurisdiction of the original bill? (2) Had it power to make Compton party by substituted service? (3) Was Compton estopped to assert a lien for his bonds by a decree of the United States circuit court for Indiana denying it for bonds of the same kind, in what was claimed to be a representative suit? (4) Did the Ohio divisional mortgages not cover certain after-acquired terminal property at Toledo, so that Compton had a first lien thereon? (5) What was the effect of the proviso in the decree of sale upon Compton's rights and remedy? (6) What relief was he entitled to under the Ohio decree? (7) Is Compton estopped to prosecute this appeal by the fact that a decree identical in terms with the one here appealed from was entered in the United States circuit court for Indiana, and has not been appealed from? The facts of the case are quite complicated, and many of them must be stated, for a clear understanding of the issues.
The Wabash, St. Louis & Pacific Railway Company, usually known as the "Wabash System,” comprised, as its main line, a railroad which ran from Toledo, Ohio, west, through Ohio, Indiana, Illinois, and Missouri, to Kansas City. It was the result of a consolidation of separate railroads,one in Ohio, one in Indiana, three or four in Illinois, and one or more in Missouri. First the Ohio and Indiana companies were consolidated, then the companies east of the Mississippi river, and finally, in 1880, all of them were united in the Wabash, St. Louis & Pacific Company. Many of the constituent companies had issued bonds secured by mortgage upon their respective lines, and as consolidations took place the new companies assumed the obligation of the mortgage and bonded debts of their constituents. When the Ohio and Indiana companies were united, in 1858, under the name of the Toledo & Wabash Railway Company, there were two mortgages on the Ohio part,--one to the Farmers' Loan & Trust Company, trustee, to secure $900,000 of bonds, and a second to E. D. Morgan, trustee, to secure bonds amounting to $1,000,000. There were also two mortgages on the Indiana part,--one to the Farmers' Loan & Trust Company, trustee, for $2,500,000, and a second to E. D. Morgan, trustee, for $1,500,000. The Toledo & Wabash Company, in 1862, issued equipment bonds to the amount of $600,000, but gave no mortgage to secure them. It is $150,000, par value, of the equipment bonds, which is the subject-matter of this appeal. In 1865 the Toledo & Wabash Railway Company united with several Illinois companies, and became the Toledo, Wabash & Western Company, with a line reaching from Toledo to the Mississippi river. It was this consolidation which the supreme court of Ohio held, by virtue of the Ohio statute authorizing it, to have the effect of fastening the equipment bonds as a lien on the property of the Toledo & Wabash Railway Company, which passed to the new company. The articles of agreement contained the following provisions:
“Now, therefore, the said companies, by their respective directors, agree to consolidate their said roads, property, and capital stock into one company, upon the basis and conditions hereinafter specified, to be submitted by the directors of each of said roads, to the stockholders thereof, for ratification, to wit:
"The Toledo and Wabash Railway Company enters into said consolidation on the following basis, viz.: Its capital is....
$ 10,000,000 Composed as follows: First mortgage bonds.
$ 3,400,000 Second mortgage bonds.
2,500,000 Convertible equipment bonds.
600,000 Convertible preferred stock.
1,000,000 Common stock
"It is further agreed that, on the terms and condition above specified, the four railroad companies hereto do agree, each for itself, severally, that the several companies named shall be, and they hereby are, consolidated into and form one corporation,” etc.
* It is further agreed that the bonds and other debts hereinabove specified, in the manner and to the extent specified, and not otherwise provided for in this agreement, shall, as to the principal and interest thereof, as the same shall respectively fall due, be protected by the said consolidated company, according to the true meaning and effect of the instruments or bonds by which such indebtedness of the several consolidating companies may be evidenced.”
The new company, the Toledo, Wabash & Western Railway Company, shortly after the consolidation, issued a mortgage to Knox and Jesup, trustees, upon its entire road, known as the “Consolidated Mortgage,” with the purpose therein recited of using the proceeds of their sale to take up and refund all previous indebtedness, including the equipment bonds.
The purpose was never carried out, but some $2,500,000 of bonds were issued, and the proceeds expended for the use of the company. In the foreclosure of a subsequent mortgage, called the "Gold-Bond Mortgage,” and the consequent reorganization, the property of the Toledo, Wabash & Western Company passed, subject to all previous mortgages, to a consolidated company of the same three states, called the Wabash Railway Company, which issued bonds amounting to $2,000,000, secured by mortgage on its line, to Humphreys and Lindley, trustees. Then the Wabash Company united with a Missouri company to make the Wabash, St. Louis, & Pacific Company a consolidated company, of Ohio, Indiana, Illinois, and Missouri, with a line of iailway extending from Toledo to Kansas City. This company issued bonds amounting to $17,000,000, and secured them by mortgage on its entire line to the Central Trust Company, and James Cheney, of Indiana, as trustees. In 1884 the Wabash, St. Louis & Pacific Railway Company filed a bill in the circuit court for the Eastern district of Missouri against the Central Trust Company, a citizen of New York, and James Cheney, a citizen of Indiana, trustees under the last mortgage, averring its insolvency, praying for the appointment of a receiver, the marshaling of liens upon it, the sale of its road, and a distribution of proceeds for the benefit of its creditors. A similar bill was filed in the circuit courts for the Northern district of Ohio, and for other districts. Receivers were appointed, who took possession of the railroad, and operated it. Shortly afterwards the Central Trust