Russell v. Farley

105 U.S. 433, 26 L. Ed. 1060, 1881 U.S. LEXIS 2145
CourtSupreme Court of the United States
DecidedApril 18, 1882
Docket168
StatusPublished
Cited by208 cases

This text of 105 U.S. 433 (Russell v. Farley) 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
Russell v. Farley, 105 U.S. 433, 26 L. Ed. 1060, 1881 U.S. LEXIS 2145 (1882).

Opinion

Me. Justice Beadley

delivered the opinion of the court.

This case comes before us by appeal from a decree in a case in equity wherein Jesse P. Farley, as receiver of certain branch lines of the St. Paul and Pacific Railroad Company, and of all lands and other property appurtenant thereto, was complainant, and the firm of De Graff & Co., the Northern Pacific Railroad Company, the Lake Superior and Mississippi Railroad Company, B. S.- Russell, G. W. Cass, receiver .of the Northern Pacific Railroad Company, and C. W. Mead, .general manager of said company, were defendants. The complainant was appointed receiver Aug. 1, 1873, in a foreclosure suit brought by John S. Kennedy and. others, trustees under a mortgage given by the St. Paul and Pacific..Railroad Company to' secure fifteen millions of dollars of bonds issued by a subsidiary *434 corporation called the First Division of the St. Paul and Pacific Railroad Company, which had a contract to build the railroad, and a lease of the road for ninety-nine years. Amongst the assets supposed by the receiver to be subject to this mortgage was certain railroad iron, which had been purchased in England with the money raised by the sale of the bonds, to wit, 1,700 tons lying at-Glyndon, on the line of the road, and 1,000 tons at Duluth, claimed by De Graff & Co.,' and 1,860 tons at Dulu.th, claimed by B. S. Russell, — that at Duluth being mostly held in the custom-house for unpaid duties, but some of it being about to be reshipped. The bill in, this case was' filed by the receiver in the State District Court for the county of Ramsey on the 21st of'•June, 1875, seeking to set aside the respective transfers of iron by virtue of which De Graff & Co. and Russell claimed to hold it, and for an injunction to restrain them from removing it, or taking it from the cilstom-house.

By a statute of Minnesota it is declared that, “ when no special provision is made by law as to security upon injunction, the court.or judge allowing the writ .shall require a bond' on behalf of the party applying for such writ, in a sum not less than two "hundred' and fifty dollars, executed by him or some person ■ for him, as principal, together with one. or more sufficient sureties, to be approved- by. said court or judge, to' the effect that the party applying' for the writ will pay .the party enjoined or detained Such damages as he sustains by reason of the writ, if the court finally decide that the party was not entitled thereto. The damages may be ascertained by a reference or otherwise as the court shall direct." 2 Bissell's Statutes, 806, sect. 121.

On filing the bill in this cause, the complainant (the said receiver)' obtained a temporary injunction upon giying to’ the defendants a bond in the penalty of $10,000, with, the -following condition, to wit: “Whereas the said plaintiff is about to apply to this court for a temporary injunction enjoining and restraining- the defendants,', and each of; them, from shipping, removing, selling, hypothecating, transporting, interfering, or intermeddling with .4,560 tons of iron rails now lying' at Glyndon and Duluth, Minnesota, or any part thereof,: -Now, therefore, if the plaintiff will pay the partiés enjoined by such *435 writ, or detained thereby, such damages as they or either or any of them may sustain by reason of the writ, if the court finally decide that the party was not entitled thereto, the above-' obligation shall be void, else of full force and'virtue.” .'

De Graff & Co. having by. consent rebonded 1,000 tons of the iroñ claimed by them, the .court, on the 11th of August, 1875, required a further bond, from the complainant in the sum of $79,000, the condition of which-, was as follows, to wit:

“ Whereas an .injunction has heretofore been granted in this court enjoining and restraining the said defendants, and each of-thém, from shipping, removing, selling, hypothecating, transferring, or interfering, or intermeddling with 4,500 tons of iron fails now lying at .Glyndon and Duluth, Minnesota, .or any part thereof; .and whereas said injunction is still in force- and effect except as to one thousand tons of said iron, claimed by said'De-Graff &'Co., at Duluth, aforesaid; and whereas the said court has ordered, as a condition for the continuance of said injunction, that the plaintiff execute to the defendants herein a bond in the sum. of seventy-nine thousand dollars, in addition to the bond for, ten thousand dollars heretofore given by- the plaintiff on-the issuance of the injunction: Now, therefore, if the.plaintiff will pay the parties enjoined by such' injunction,' or detained thereby, such damages as they, or either or any of them,-may sustain by reason .of sueh injunction, if the "court finally decide that the party was not entitled thereto, the above obligation shall be void, els.e of full forcé and virtue.”

The' defendants severally -answered the bill, and oh- the 1st of March,.1876, on‘application of the ■ complainant, the-cause was removed to the Circuit .Court of the United States for the District of Minnesota. ' After taking a large amount of evidence, it was brought to a hearing, and ón the 13th of October, 1877, a final decree was made dismissing the bill as to Dé Graff .& Co., without costs to either party. As to the defendant Russell, who was charged with holding 1,860 tons of the iron, it appeared that he was acting as agent for William G. Morehead, who was trustee .or agent for- the-First-Division Company in procuring the iron and carrying on' the work of construction and who had sold to De Graff & Co., sub-contractors,- the iron claimed by them, in part payment of moneys due them for *436 work; and had pledged a portion of the 1,860 tons of- iron {claimed hy Russell) to. pay Jay- Cooke & Co. for advances of fnoney,- and Jay Cooke & Co. had pledged and sold it to the United States (the Navy Department) for a debt due to-it. Some 1,090 tons of the 1,860 tons in question remained at Duluth unsold, and this was claimed by Edward M. Lewis, trustee in bankruptcy of Morehead; but the court held that it was subject to the mortgage, and that the receiver was entitled-to it. • The decree on this part of the case, was as follows, to wit: — ’ -

' . “It is also'further ordered, adjudged,' and decreed that the . gaid Farley, as receiver, as against the defendant B. S. Russell, and against the defendant Edward M. Lewis, trustee in bankruptcy of William G. Morehead and others,' is entitled, for the benefit of the trust which-he -represents, to all the iron rails in controversy herein not sold to De Graff & Co., and not pledged and sold to t,he Navy Department; which said iron rails, subject to the customs duties to the' United • States, thus decreed to the said Farley as receiver, he is authorized, to, use in the construction of the said extension lines, or to sell at the best prices and on. the best terms practicable, and apply the net proceeds thereof'to the credit of the mortgage, dated April 1,1871, executed by the St. Paul and" Pacific -Raifroad Coriipa'ny to' Horace Thompson, George L. Becker, and William G. More-head, trustees; who in the said trust have been succeeded by 'the áajd Wetmore, Pearsal, and Denny, as-trustees, and which mortgage is now being foreclosed. in- this court, neither party as against the other to recover costs or damages.

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Bluebook (online)
105 U.S. 433, 26 L. Ed. 1060, 1881 U.S. LEXIS 2145, Counsel Stack Legal Research, https://law.counselstack.com/opinion/russell-v-farley-scotus-1882.