Clyde v. Richmond & D. R.

65 F. 336, 1894 U.S. App. LEXIS 3131
U.S. Circuit Court for the Northern District of Georgia·Decided September 20, 1894·Published·Cited by 3 cases

Opinion

NEWMAN, District Judge.

The intervention of John S. Hissong in the above-stated case was filed on May 14, 1894, in the clerk’s office of this court, and on the same day the intervention was allowed, and referred to W. D. Ellis, Esq., special master, to determine all questions of law and fact therein, and report to the court. This intervention is filed both in the case of the Central Trust Company of New York against the Richmond & Danville Railroad Company, and in the case of Clyde et al. v. The Richmond & Danville Railroad Company. In the first-named case, the bill is brought by William P. Clyde and others on behalf of themselves and other creditors and stockholders, and on this bill, in June, 1892, F. W. Huidekoper and Reuben Foster were appointed receivers. On the 29th day of July, under a bill filed by the Central Trust Company of New York against the Richmond & Danville Railroad Company, Samuel Spencer, F. W. Huidekoper, and Reuben Foster were appointed receivers. This bill of the Central Trust Company was brought for the purpose of foreclosing a mortgage against the defendant corporation. The order appointing Spencer, Huidekoper, and Foster receivers under the Central Trust Company bill provided that Huidekoper and Foster, receivers under the Clyde bill, should, on the 1st day of August, 1893, turn over to the three receivers appointed under the Central Trust Company bill all the property of the Richmond & Danville Railroad Company in their possession and under their control. On the 20 th day of July, 1898, Spencer, Huidekoper, and Foster were, under a bill filed by the Central Trust Company of New York against the Georgia Pacific Railway Company, appointed receivers of all the property and assets of that company, so that after that date the property of the Georgia Pacific Railway Company, which had been, prior to the receivership, operated by the Richmond & Danville Railroad Company, was controlled by the same receivers under a separate bill against the Georgia Pacific Railway Company which was filed originally in the circuit court for this district. The intervening petition shows that John S. Hissong, who is a citizen of the state of Alabama, obtained a judgment in the circuit court of Jefferson county, Ala., on the 20th day of April, 1891, against the Richmond & Danville Railroad Company for the sum of $1,000, for which he prays judgment as an intervening petitioner in the case named against the Richmond & Danville Railroad Company. The petition was referred formally, and in connection with a number of other petitions, to the special master, as stated, without considera [338]*338tion of the merits of the same, as no demurrer or objection was interposed prior to the reference. Before the special master, the Richmond & Danville Railroad Company put in a special appearance by counsel, and objected to the jurisdiction of this court and the special master, on the ground that this court had no jurisdiction to enter judgment against the Richmond & Danville Railroad Company without a formal suit on a foreign judgment and due service of process, and upon the further ground that no lien is sought against the trust assets of the defendant in the hands of the court. Upon the presentation of an' exemplification of the record in the Alabama court to the special master he found that the same was in due form, and that the intervener was entitled to have judgment against the defendant in his favor, with interest thereon at 7 per cent per annum from the 22d day of September, 1891, to the date of his finding, for the sum of $1,000. On the filing of the report of the special master, counsel for the Richmond & Danville Railroad Company, again specially appearing, renewed the objections urged before the special master, and upon that ground excepted to the report of the special master.

The question raised is somewhat novel and peculiar. The original bill in this case of Clyde and others against the Richmond & Danville Railroad Company was filed in the circuit court for the Eastern district of Virginia, and ancillary bills, or what were called “original bills,” — but were bills in aid of the first suit in Virginia, — were filed in the circuit courts of the various states through which the line of the Richmond & Danville Railroad Company ran, which were Rorth Carolina, South Carolina, Georgia, Alabama, and Mississippi. The primary litigation as to the Richmond & Danville Railroad Company, however, is all in Virginia. The bill filed in this district, while it was called, as stated, an “original bill,” was really subordinate to the Virginia proceeding. It was filed here for the purpose of obtaining the aid of this court in preserving the assets of the defendant corporation so far as the same were in the jurisdiction of this court; and while this court has not questioned its right to pass upon and determine the rights of creditors here, claiming an interest in or asserting a lien against the property of the corporation in this district, it has not gone further than that. The petitioner, Hissong, obtained a judgment in the state courts of .Alabama prior to the time that the property was placed, by order of the circuit court of Virginia and the other circuit courts, in the hands of receivers. The lien of his judgment was confined to property in the state of Alabama. A bill of the-same character as the one filed in this district, as has been stated, was filed in Alabama, and no reason appears why petitioner could not as ’well present his claim of the right to share in the assets of the Richmond & Danville Railroad Company to the circuit court in Alabama as to the circuit court here. Some reason might exist for his taking his claim to the circuit court of Virginia to assert his right to participate in the property where the principal assets of the defendant are being administered, but it is difficult to see by [339]*339what right he can take his claim from one ancillary jurisdiction to another ancillary jurisdiction for the purpose of having his rights determined. If this he true, then a very peculiar and a very unsaiisfaetory condition of things wall exist. A North Carolina judgment creditor could go to Mississippi, or a South Carolina judgment creditor could go to Alabama, and so on from one to another of the various states in which these ancillary proceedings are pending. The duty of each court, where the various proceedings are pending other than in Virginia, would seem to he to consider and dispose of right and lien peculiar to its jurisdiction, and as to or connected with the property within its peculiar control. Where a continuous line of railway runs through several districts, and the court in each district in appropriate proceedings recognizes the same receivers for the railway, neither court, with the proper regard for the comity of courts, will go beyond its own jurisdiction, and interfere with the management of the property in another jurisdiction. Nor will any one court undertake to pass upon the claim of those whose rights and lien would seem to he dependent upon and peculiar to another jurisdiction.

But there is another objection to this proceeding and the prayer of this petition, which seems to be fatal. The petitioner asks for a judgment against the Richmond & Danville Railroad Company. To he effectual for any purpose, it must amount to a general Georgia judgment against the defendant corporation, and such, I understand, it is claimed to be, if the report of the special master is confirmed.

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Clyde v. Richmond & D. R., 65 F. 336, 1894 U.S. App. LEXIS 3131 (circtndga 1894).

65 F. 336 (Clyde v. Richmond & D. R.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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