State ex rel. Attorney General v. Frost

89 N.W. 915, 113 Wis. 623, 1902 Wisc. LEXIS 97
CourtWisconsin Supreme Court
DecidedApril 1, 1902
StatusPublished
Cited by10 cases

This text of 89 N.W. 915 (State ex rel. Attorney General v. Frost) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Attorney General v. Frost, 89 N.W. 915, 113 Wis. 623, 1902 Wisc. LEXIS 97 (Wis. 1902).

Opinion

TFe application was granted and tFe following opinion was filed January 25, 1902:

Wxhsx.ow, J.

Application Fas Feen made to tFis court by tFe attorney general for leave to bring an action in equity in tFis court on beFalf of tFe state for tFe purpose of perpetually enjoining Albert G. Frost, as receiver of tFe WasF-burn, Bayfield & Iron River Railway Company, from ceasing to operate said railroad, and from tearing up and destroying tFe roadbed thereof. At tFe time of making such application tFe attorney general presented to tFe court his proposed complaint or information, together with-a considerable number of affidavits substantiating its averments of fact, from all of which it appears that the Washburn, Bay-field & Iron River Railway Company is a railway corporation organized under the laws of this state, and that prior to June, 1898, it constructed a freight and passenger railway about thirty-five miles in length, wholly within the limits of Bayfield county, and operated the same for some time as a common carrier; that said railway was mortgaged to secure-bonds amounting to $237,000, and that an action for the foreclosure of said mortgage was afterwards begun by the trustees named therein in the circuit court of the United States for the Western district of Wisconsin, in which action [629]*629defendant was appointed receiver, and a decree of foreclosure was rendered July 5, 1901, wbicb directed that the receiver, who was thereby appointed a special master in chancery for the purpose, make sale of the main line, as an entirety, at a price not less than $225,000, which sum was on ■July 23, 1901, changed by modification of the decree to $275,000; that the receiver, in his capacity as special master aforesaid, offered the property for sale at said sum of $275,000, but received no bids, and so reported to the United 'States court aforesaid, and on October 12, 1901, that court modified the judgment so as to direct the said Frost, as special master aforesaid, to tear up the rails and sell the same for whatever he could get; and that the receiver is about to carry out such judgment.

It is said by the attorney general that so much of the decree of the federal court as directs the receiver to tear up and dispose of the rails of the railroad in question is entirely beyond the jurisdiction of the United States court; that such a judgment is, in effect, the destruction of a corporate franchise granted by the state of Wisconsin; that this railroad is a public highway, which the company itself would have no right to destroy or cease to operate without the consent of the state, and that such a highway cannot be thus destroyed in a mere foreclosure action to which the state is not a party, and, as it is argued, cannot be a party; that such corporate franchises can only be affected in a proper action brought in the name of the state upon leave granted by this court,— citing Stats. Wis. 1898, sec. 3211. On the other side it is claimed that the remedy of the state, if it has any, is by proceeding to intervene in the foreclosure action; that the United States court has full and complete jurisdiction to direct the sale of the mortgaged property as in its judgment seems best; and that, upon principles of judicial comity, no other court should interfere with that court which has first obtained jurisdiction.

[630]*630Tbe questions presented are grave and important ones. They call for most serious and careful investigation and research. They should not be decided upon first impressions. We intimate no opinion upon them, but we feel that their importance demands that they may be adequately and fully presented both on behalf of the state and on behalf of the receiver. In order that they may be so presented, we have ordered that the attorney general be granted leave to commence his proposed action against said Frost, as receiver and as. special master, and that said Frost be ordered to desist from tearing up the railroad pending such action. We entertain the highest respect for the federal court and its learned judges. In taking the present action, we have no intention of interfering with the jurisdiction of that court. We have every confidence that not only the receiver and his counsel, but the federal court as well, will cheerfully recognize that' the questions involved are so important and doubtful that this court should have an opportunity to consider and decide them without unseemly haste, and without apprehension that the status quo will be changed in the meantime. But while entertaining this belief, it is- due to the dignity of this court to say that, whatever be the attitude of the federal court or its officers, when there is brought to our attention by the highest law officer of the commonwealth a state of facts from which it may be seriously argued that the federal court has, in excess of its jurisdiction, invaded the rights and prerogatives or sovereignty of the state, this court will not hestitate to examine and decide such questions in its own way, and will, if necessary, preserve the status quo by the exercise of the powers granted to it by the constitution and the laws.

After the commencement of the action the defendant filed a petition for its removal to the circuit court of the United States for the Western district of Wisconsin.

[631]*631On April 1, 1902, the petition was granted. The facts are thus stated by Dodge, J.:

This is an original information filed in this court by the State of Wisconsin in its sovereign capacity, to enjoin the threatened destruction of one of the highways of the state, to wit, a certain railroad constructed in 1895 or 1896 by the Washburn, Bayfield & Iron River Railway Company, a railroad corporation organized under the laws of this state on August 2, 1895. By the information it is made to appear that a mortgage made by said railroad company in 1895 upon all of its property, including franchises, held by a nonresident of the state of Wisconsin, has been in process of foreclosure in the circuit court of the United States for the Western district of Wisconsin since some time in 1898, and that in said action receivers have been appointed and installed, who have taken possession of said road and operated it, the last of whom is the defendant, Albert G. Frost, and that a decree of foreclosure was rendered and entered July 5, 1901, directing the sale of all of its property for cash by the defendant, Albert 0. Frost, “receiver and special master in chan'cery of that court,” as an entirety, in one parcel, with directions as to the detail of the sale and disposition of the proceeds; said decree reserving to the court the right to make such further orders at its foot as may seem just and proper. On July 23d the court fixed as an upset or minimum price at such sale, $215,000. On October 12, 1901, the defendant, as special master, made report of entire inability to sell in accordance with the terms of the decree, notwithstanding efforts to do so, and advised the court that, in his judgment, it is impossible to sell the railroad as an entirety; that the only disposition which can be made is in parts and parcels, the rails to be taken up, and, together with all the motive power, equipment, machinery, furniture, and fixtures, sold at such time or times and in such manner and upon such terms as the court may direct. Thereafter, on the same day, [632]

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Bluebook (online)
89 N.W. 915, 113 Wis. 623, 1902 Wisc. LEXIS 97, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-attorney-general-v-frost-wis-1902.