Adelbert College of Western Reserve University v. Toledo, W. & W. Ry. Co.

47 F. 836, 7 Ohio F. Dec. 100, 1891 U.S. App. LEXIS 1517
CourtU.S. Circuit Court for the District of Northern Ohio
DecidedSeptember 10, 1891
StatusPublished
Cited by7 cases

This text of 47 F. 836 (Adelbert College of Western Reserve University v. Toledo, W. & W. Ry. Co.) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Northern Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adelbert College of Western Reserve University v. Toledo, W. & W. Ry. Co., 47 F. 836, 7 Ohio F. Dec. 100, 1891 U.S. App. LEXIS 1517 (circtndoh 1891).

Opinion

Jackson, J.

In April, 1883, the Adelbert College, an Ohio corporation, commenced this suit in the court of common pleas of Lucas county, Ohio, against the above-named defendants, upon two bonds of $500 each, with coupons attached, issued in 1862 by the Toledo & Wabash Railway Company, and styled “Equipment Bonds,” of which there vras a total issue of $600,000. The defendant companies are corporations and citizens of Ohio, Indiana, Illinois, and Missouri, which have successively acquired by consolidations and the foreclosure of mortgages the ownership of the properties of the said Toledo & Wahash Railway Company. The individual defendants are trustees under mortgages executed hv the two first-named defendant companies. The plaintiff by its suit seeks to have a lien declared upon the property, etc., that was of the Toledo & Wabash Railway Company, and now owned by its successor in title, and to subject the same to the payment of its said bonds. The succession in title and ownership to the properties sought to be charged, the several mortgages made before and since 1862, by the different companies, down to the acquisition thereof by the Wabash, St. Louis & Pacific Railway Company, and the relief sought, are the same as set forth in the cases of Compton v. Railway Co., 45 Ohio St. 592, 16 N. E. Rep. 110, and 18 N. E. Rep. 380, and of Railway Co. v. Ham, 114 U. S. 587-598, 5 Sup. Ct. Rep. 1081. In the latter case the supreme court of the United States held that said equipment bonds constituted no lien upon the property, franchises, etc., which the defendant companies had acquired or derived through or from the Toledo & Wahash Railway Company. In the case of Compton v. Railway Co., the supreme court of Ohio, on precisely the same question and same state of facts, subsequently reached a different conclusion, and sustained the lien which plaintiff is seeking to enforce. Pending this Compton suit, the plaintiff and other holders of equipment bonds sought to have themselves made parties thereto, but this was denied by the state court, on the ground that said Compton’s action was for his sole benefit. Thereupon the plaintiff instituted the present suit, which from the prayer of the original petition seems to have been intended for its sole benefit.

On the 24th November, 1883, the Wabash, St. Louis & Pacific Railway Company answered the petition, setting up various matters of defense, including the judgment of the supreme court of the United States in the Ham Case, and denying the lien claimed for the equipment bonds. On the 21st May, 1888, said Wabash, St. Louis & Pacific Railway Com[838]*838pany filed an amended answer, setting up other matters of defense,^mong which was the fact that, under foreclosure proceedings commenced in 1884 by trustees of mortgages executed by said railway company, the circuit court of the United States for the northern district of Ohio and district of Indiana had appointed receivers of its properties, etc., who were still in possession thereof; that subsequently the trustees of mortgages prior in date and lien to the said equipment bonds had commenced foreclosure proceedings in the circuit courts of the United States for the proper districts, and that said courts were proceeding to foreclose such prior mortgages, having by their receivers and the said suits exclusive jurisdiction over the property which plaintiff sought to have charged; and that plaintiff should be remitted to said circuit courts for the determination and enforcement of its said claim. On December 27, 1888, the plaintiff filed its amended anil supplemental petition, making James Compton, who had in the mean time obtained a decree in the supreme court of Ohio establishing the lien of his equipment bonds, a party defendant, and claiming that he had no priority of payment, and asking that the proceeds of the property directed to be sold to satisfy his judgment should be distributed to plaintiff, “concurrently and co-equally” with said Compton, and, if necessary, to consolidate said causes, and make full inqpiry and finding as to any and all liens upon said railway property, and the proceeds to arise from the sale of the same, “to the end that said railway property, when it shall be sold, shall pass, free and clear of all incumbrances, to the purchasers thereof, with the view of making the same bring the largest possible price at such sale.” At this stage of the proceedings in the plaintiff’s suit, William P. Redmond and various others appeared, and on January 4, 1889, made application to said state court to be made parties defendant therein, with leave to file answer and cross-petition; and, the plaintiff consenting thereto, the court granted their application, ordered said applicants to be admitted as parties defendant, with leave, as such, “to file answer and cross-petition herein, for the benefit of themselves alone, or also for the benefit of other persons and corporations who may not have joined them in making such application, and to have and enjoy all the rights, privileges, and benefits of parties defendant herein.” Said Redmond and others accordingly, on January 5, 1889, filed their answer and cross-petition in said cause, setting forth that they were holders of a large number of said equipment bonds, admitting all the allegations of the original and amended petitions, except the admission that certain mortgages, prior in date to said bonds, constituted a superior lien on the property sought to be charged with the payment of their claims.

By their cross-petition, after stating their respective holdings of said equipment bonds, they allege that there are a large number of other bonds of the same class and issue still outstanding in the hands of sundry persons, partnerships, and corporations, unknown to them, in whose behalf, if they will appear and join in the cross-petition, as well as on their own behalf, the petitioners file said cross-petition. They repeat the allegations of the original petition relating to the consolidation in [839]*8391865 of the Toledo & Wabash Railway Company with other railroad companies, forming the Toledo, Wabash & Western Railway Company; the mortgages made by the latter in 1867 and 1873 to James R. Jesup and Isaac H. Knox, as trustees, to secure issues of its bonds for $15,-000,000 and $5,000,000, respectively; the foreclosure in 1875 of the 1873 mortgage for $5,000,000; the sale of its property, rights, and franchises thereunder, and the purchase thereof by John W. Ellis and others, as a purchasing committee; the formation of the Wabash Railway Company, and the conveyance to it by said purchasing committee of the entire line of railway, with its equipment, rights, properties, and franchises; the execution in 1877 by said Wabash Railway Company of its mortgage upon said properties to George I. Seney, trustee, and in 1879 a further mortgage to Solon Humphreys and Daniel A. Lindley, trustees; the consolidation in October, 1879, of said Wabash Railway Company with the St. Louis, Kansas City & Northern Railway Company, a Missouri corporation, forming the Wabash, St. Louis & Pacific Railway Company; the execution of the latter of its mortgage to the Central Trust Company of New York and James Cheney, of Indiana, to secure a large issue of consolidated bonds; the proceedings instituted by said Wabash, St.

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Bluebook (online)
47 F. 836, 7 Ohio F. Dec. 100, 1891 U.S. App. LEXIS 1517, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adelbert-college-of-western-reserve-university-v-toledo-w-w-ry-co-circtndoh-1891.