Ex parte Chicago, Rock Island & Pacific Railway Co.

255 U.S. 273, 65 L. Ed. 631, 41 S. Ct. 288, 1921 U.S. LEXIS 1823
CourtSupreme Court of the United States
DecidedFebruary 28, 1921
DocketNo. 24
StatusPublished
Cited by34 cases

This text of 255 U.S. 273 (Ex parte Chicago, Rock Island & Pacific Railway Co.) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ex parte Chicago, Rock Island & Pacific Railway Co., 255 U.S. 273, 65 L. Ed. 631, 41 S. Ct. 288, 1921 U.S. LEXIS 1823 (1921).

Opinion

Mr. Justice Brandéis

delivered the opinion of the court.

The Chicago, Rock Island & Pacific Railway Company, commonly called the Rock Island, filed in this court a petition in which it allegéd that the District Court of the United States for the Northern District of Ohio, Western Division, was undertaking to proceed against it personally in a suit therein pending; that the Rock Island had not voluntarily become a party to the suit, had not been served with process, and could not under § 51 of the Judicial [275]*275Code be made a party without its consent, since it was organized under the laws of Illinois and Iowa and was not a citizen or resident of Ohio; and it prayed for a writ of prohibition, or in the alternative a writ of mandamus, to prevent the court from proceeding further against it. The suit in which it is sought to proceed personally against the Rock Island is one brought by an Ohio creditor of the Toledo, St. Louis and Western Railroad Company, an Indiana corporation, for Lhe appointment of a receiver for that corporation. The particular proceeding by which the personal liability is asserted is a cross-bill which was filed by the Toledo Company against the Rock-Island after the appointment of the receiver and after the Rock Island had appeared before a special master for the purpose of protecting its interests in an issue of the Toledo Company’s bonds. A rule was granted and the case is now before us on the petition and return. ' The main questions argued here were whether upon the facts there stated the Rock Island had become a party to the suit and subjected itself generally to the jurisdiction of the court; and, if it had not, whether the case is one which entitles the petitioner to either of the extraordinary remedies applied'for.

There is a well-settled rule by which this court is guided upon applications for - a writ of prohibition to prevent a lower court from wrongfully assuming jurisdiction' of a party, of a cause, or of some collateral matter arising therein. If the lower courtds clearly without jurisdiction the writ will ordinarily be granted to one who at the outset objected to the jurisdiction, has preserved his rights by appropriaté procedure and has no other remedy. In re Rice, 155 U. S. 396. If, however, the jurisdiction of the lower court is doubtful, Ex parte Muir, 254 U. S. 522; or if the jurisdiction depends upon a finding of fact made upon evidence which is not in the record, In re Cooper, 143 U. S. 472, 506, 509; or if the complaining party has an adequate remedy by appeal or otherwise, Ex parte Tiffany, 252 U. S. [276]*27632, 37; Ex parte Harding, 219 U. S. 363; the writ will ordinarily'be denied. - Tested by this rule the case presented by the petition and the return does not entitle the Rock Island to this extraordinary remedy.

The original bill filed against the Toledo Company in the Northern District of Ohio, Western Division, alleged, among other things, that it had defaulted on an issue of $11,527,000 Collateral Trust Gold Bonds, secured by stock of the Chicago & Alton Railroad Company held by the Central Trust Company of New York, as trustee for the bondholders. . These bonds were divided into two classes having somewhat different rights and interests. A single bondholders’ committee was formed to protect both classes of bonds. Of the “A” bonds. $6,480,000 were outstanding; and of these $5,248,000.were deposited with the committee, — $400,000 of them by the Rock Island. Of the “B” bonds $5,047;000 were outstanding all of which were deposited with the committee by the Rock Island. The special master was directed to ascertain and" report the amount, character, lien and priority of all claims; and-creditors were notified to present before him their respective claims duly verified, or to file bills of intervention. The bondholders’ committee then filed a petition praying that the suit be dismissed as collusive and, in the alternative, that judgment be rendered for.the committee in the amount of the face value of the bonds held by it, aggregating $10,295,000 and accrued interest. To that petition an answer in the nature of a cross-bill was filed by the plaintiff who prayed that the committee’s petition be held to be an intervention, that the receiver be directed to defend against the bonds held by the committee, and that these bonds be ordered surrendered, if found to be invalid. By leave of court, the committee withdrew its petition, and sought its relief by a dependent bill. An order was thereupon entered making- the committee a party defendant to the original bill with leave to answer and file a [277]*277cross-bill. This it did; and the Central Trust Company also, filed a cross-bill to foreclose the lien on the Chicago & Alton stock held as security for the Collateral Trust Bonds. An order was then made referring the case, on the issues raised by the several pleadings, to the special master to take testimony and report.

At the beginning of the taking of testimony before the special master the appearances of counsel were formally noted by the.master, among others, as follows:

“Lawrence Maxwell, Esq., and J. P. Cotton,- Esq., appearing for the Bondholders’ Committee, Mr. Maxwell appearing to represent the interest of the Rock Island Company, and Mr. Cotton representing the ‘A’ bonds. ”

Thereafter the Toledo Company filed an answer and cross-bill in which it claimed, among other things, that the whole issue of the Collateral Trust Bonds was void on account of fraud practiced by the Rock Island; that the Rock Island was liable for all amounts theretofore paid by the Toledo Company on the bonds in excess of dividends received on the Chicago & Alton stoek; and that it was liable also for all amounts which the Toledo Company might be required to pay thereafter on account of any of the series “A” bonds which the court should hold to be-valid obligations because they had passed into the hands of innocent holders. The cross-bill of the Toledo Company prayed that the necessary accounting be had; that the Rock Island be declared to be a party ; that it be required to answer; and that in default of answer a decree be entered against it pro confesso. An order was entered in accordance with the prayer of the bill and notice'thereof was served on Mr. Maxwell as its solicitor. His name had not appeared as counsel on any pleading filed by the committee.

The Rock Island then filed a motion which stated: “Appearing solely for the purpose of the motion and not intending to submit itself to the jurisdiction of this court [278]*278as a party to this suit, moves the court to set aside its finding in the order entered herein March 11, 1918, that the Chicago, Rock Island & Pacific Railway Company has heretofore entered its. appearance as a party to this suit and its order . ; . ; on the ground that the court was without jurisdiction to make said order, or over this defendant as a party to the cross-bill.”

This motion was overruled and an order was entered requiring answer within twenty days..

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Cite This Page — Counsel Stack

Bluebook (online)
255 U.S. 273, 65 L. Ed. 631, 41 S. Ct. 288, 1921 U.S. LEXIS 1823, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ex-parte-chicago-rock-island-pacific-railway-co-scotus-1921.