Farmers' Loan & Trust Co. v. Chicago & A. Ry.

44 F. 653, 1890 U.S. App. LEXIS 1915
CourtU.S. Circuit Court for the District of Indiana
DecidedDecember 9, 1890
StatusPublished
Cited by3 cases

This text of 44 F. 653 (Farmers' Loan & Trust Co. v. Chicago & A. Ry.) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farmers' Loan & Trust Co. v. Chicago & A. Ry., 44 F. 653, 1890 U.S. App. LEXIS 1915 (circtdin 1890).

Opinion

“Woods, J.,

(after stating the facts.) The objection is made at the threshold that the petitioner cannot have the assistance of the court in the way asked to obtain possession, because it was not the purchaser, but comes as the grantee of the purchasers at the master-commissioner’s sale. The authorities cited in support of this objection do not fully support it. In Van Hook v. Throckmorton, 8 Paige, 33, the court says:

“There is ho settled practice of this court entitling a subsequent purchaser from a purchaser at a master’s sale as a matter of right to the .assistance of the court to obtain possession of the premises which his grantor had purchased under the decree. ”

And in People v. Grant, 45 Cal. 97, and Stanley v. Sullivan, 71 Wis. 585, 37 N. W. Rep. 801, the question was one of statutory construction, and' the decisions have no general application. But, whatever the general .rule in that respect is, it is not controlling in the present case; because, by the order of September 1st, this court recognized, and, in effect, declared; a substitution of the Chicago & Erie Company in the place of the purchasers at the sale, in respect both to rights and to duties and'liabili’ties, That order, which was made with the consent of par-lies, besides directing the receiver to deliver possession “to the said Chicago & Erie Railroad Company, as the grantee, and assignee of said'purchasers at .the commissioner’s, sale, .had herein,” contains this clause:

[659]*659“And the court now reserves the right to resume the possession oí said railroad and other property in case the said Chicago & Erie Railroad Company shall hereafter fail or refuse, upon the order of the court, to pay into this court any money allowances for costs, expenses of the trust, or for claims against said receiver; and for that purpose the court retains jurisdiction of the said railroad and other property.”

I f this did not make the Chicago & Erie Company a parly to the cause within the meaning of equity rule 9, which authorizes the issue of the writ of assistance for the use of a party, it certainly entitles it to the benefit of rule 10, whereby it is declared that—

“Every person not being a party in any cause, who has obtained an order, or in whose favor an order shall have been made, shall be enabled to enforce obedience to such order by the same process as if he were a party to the cause; and every person not being a party in any cause, against whom obedience to any order of the court may be enforced, shall be liable to the same process for enforcing obedience to such order as if he were a party to the cause.”

The petitioner is therefore entitled to the writ, if the facts justify the granting of it.

The answer of the respondent has in it the proposition that, by reason of the conduct of the receiver “as agent and representative of the mortgagees and bondholders,” his receipt of rent from the Wabash Company, and other facts alleged, “a general tenancy was created between the mortgagees and bondholders, of the one part, and the Wabash Railroad Company, of the other part.” In respect to this it is enough to say that the receiver did not make, or attempt to make, any arrangement which should extend beyond the term of the receivership. Without the consent of the court, I suppose, he could not have done so. The fact is that, during the possession of the receiver, he complied with the tonus of the contract of June 1, 1887, in so far as they were obligatory upon the Chicago & Atlantic Company, so that there was, by-reason of the receivership, no breach of the contract in that behalf; and if, instead of a sale, the suit had ended in the restoration of control to the Chicago & Atlantic Company, the relation between the two companies in respect to that contract would have been the same — the contract would have been just as binding upon them — as if there had been no receivership; and so, in the language of the answer, it remained true, until the receiver turned the property over to the petitioner that “the receiver and the Wabash Company entered upon the joint use and occupation of tins railroad; * * * the receiver holding under his appointment, as aforesaid, and the Wabash Railroad Company holding and occupying * * * under the aforesaid contract of lease.” That contract, whether it created a tenancy or an easemept, having been made pending the suit, the. rights of the Wabash Company under it were necessarily held subject, to the decree, as much as if that company had been a party to the action. rl?he suggestion at the argument that the contract was made before the filing of ibe cross-bill of Bippus is immaterial, because the bill of the Farmers’ Loan <fc Trust Company sought a foreclosure of both mortgages, and consequently there was when that contract was made, in respect to both mortgages, a Im jjeudens as complete, 1 suppose, as if the' [660]*660cross-bill had also been pending. Besides, the decree upon the first mortgage alone is a complete foreclosure of the rights of parties claiming under contracts made with the mortgagor after the' commencement of the suit to foreclose that mortgage. When, therefore, the purchasers at the sale, in accordance with the terms of the decree in that respect, gave notice to the master commissioner of their election “to abandon and disclaim” the contract of June 1, 1887, with Ashley and Talmage, and all supplemental agreements, the result was that, immediately upon the surrender of possession by the receiver, all right of possession in the Wabash Company under that contract ceased; and, if that company has any ground for rightful resistance to the petitioner’s claim for full and exclusive possession, it must be because, by conduct or by contract, the petitioner has conferred that right since it took possession at the hand of the receiver.

In respect to this point the attorneys for the Wabash Company, in a brief filed since the argument, say:

“ On the foregoing facts, the first question presented is whether this court ought to attempt, in this proceeding, to determine the merits of the controversy now pending and being prosecuted in good faith between the same parties in the state court. If the Chicago & .Erie Company has done nothing which entitles the Wabash Company to the injunction which it prayed for and obtained in the state court, then the Chicago & Erie Company can make its defense there. Both parties being citizens of the state of Indiana, the state court was the only tribunal to which the Wabash Company could'appeal for the protection of its rights under any express or implied contract which had sprung up between September 1st and September 22d between the parties, which was after the Chicago & Erie Company had taken possession or assumed control; and we submit that no summary process from this court ought to be employed to cut down any such rights, in case they do exist. And especially is that true when such rights are asserted in good faith, and supported .by evidence strong enough to induce the state court, upon a full hearing, to grant the relief prayed for. The cases cited and relied upon by petitioner are those in which the parties in possession set up no claim of right through anything arising subsequent to the sale.

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Bluebook (online)
44 F. 653, 1890 U.S. App. LEXIS 1915, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-loan-trust-co-v-chicago-a-ry-circtdin-1890.