CENTRAl.

TabsT

CO. fl. ST. LOUIS; A. '" T. RY. CO.

/SSt

lor other creditors to come in, and a reference is directea to the master to report the debts of all such creditors as may chose to come in and claim the benefit·of the suit and the decree against the defendants. A decree will be accordingly entered, declaring the liability of defendants for the amount of their respective holdings of said increased and unpaid stock, with costs of this suit; and,upon the ascertainment of the claims entitled to payment out of said funds, execution as at law will issue against the several defendants for the amount due from each, until such claims are fully paid. .

CENTRAL

TRUST

Co. '11. ST. LoUIS, A. &T. Ry. Co.

CoMPANIIlS. .. '

(Oi"euU Oourt, E. D. Arkansas. February 27,1800.)

1.

OW!1ing a line of. railroad in Arkansas consolidated with a Missouri corpora.t.ion, owning a .line'Of. .railrOad in Missouri. By the co.n.80lo idatiQIS; the company became the owner ·of the road in botbstates, but in Arkansas it is to be regarded as an Arkansas corporation, and in Mis80uri as II Missouri . .
RBOIlIVEns--TERMS:-MoRTGAGE-RAILBOAD COMPANIES.

S.

. Wben lWstate court has jurisdiction of tbe parties and the subject-matter,its against receiver of a United States court is as and conclusive as It is any other suito!,". " FJl:DI\RALCOURTS'-JURI8DICTION. ,The UnitedStatea circuit courts are not invested witll appellate or snpervisory jUrisdiction over the,state courts, and cannot annul, vacate, or modify tbeir judg. mt)ntB: This rule ts 'not a:il'ected by the last clause of'tbe third section ohhe act approved August 1:8, 1888, (25 U. S. St. 486.) . . 6. APl'BAL-BoND-RIlClilIVER8. .. . Iteceivers appealing in good fll.ith from the judgmen1lB of the state courtsshpuld not be required to give 8uper8edeaa bouds. .. ., '. .
by the Oourt.)

8.

Wb.ell a. receiver is appointed for a railroad,. tbe better practice is, .for the judge or court making the appointment, to stipulate at the time, and as a condition 'of tbe appointinent of Q receIver, 'what debts and liabilities of tbe railway company shall be Ujade II charge on tbe property and paid by tbe receivers.. If tbe mortgagee is unwilling to take a receiver pn tbe terms imposed, the foreclosure can proceed without a receivership. If no order is made wh:en the it may be .
OJ' STATE COURTS.

.

PhiUipa and Ste:wart,for complainant. J. M.t!cJ. G. Taylor, for defendant.

In Equity.

S. H. West, for the receivers.

CALDWELL, J. }n 1886 the St. Louis, .Arkansas.& Texas RaHwa1 Company- in Arkansas and· Missouri, a corporation organized under, the lawsofthestate of Missouri, acquired the title to a railroad, previously built by another company,running from Bird's Point, in Missouri, to Texarkana, Ark. On the 4th day of May, 1886, this Missouri cQrpera-. tion:mcuted a mortgage to the plaintiff. to secure thepayrrlent ofm first Inbitgage bonds,oq its road and appurtenances Arkansas aqd

J'EDERAL REPORTER,

vol. 41.

Missouri. On the 4th day ,of' August, 1887 the same company sold tbabpltrt of its road in Arkansas to the Arkansas & Southern RailwltY Company, a'corporation drganized under the laws of Arkansas. On the 15th.'day of August, 1887, the Missouri corporation, viz., the St. Louis, Arkansas & Texas Railway Company in Arkansas and Missouri, then owning' the road running from Bird's Point, Mo., to the Arkansas state line, and the Arkansas corporation, viz., the Arkansas & Southern Railway Company" then owning the road running from the Missouri state line to the Texas state line at Texarkana, with branches, were consoliqatedj the consolidated company retaining the name of the Missouri company, i. e., the St. Louis, Arkansas. & Texas Railway Company in Arkansas and Missouri. On the 20th day of October, 1887, the consolidated company executed itsll?-ortgageonits road and branches in Arkansa{l and Missouri to the plaintiff' to sebure an issue of its bonds; and on the 15th day of August, it anothel" mortgage to the pl!lintiff on the same property to secure a second issue ofits bonds. suit is brought to the three mortgages mentioned, on the road'lI.nd property in Arkansas. . The amended and supplemental bill filed. in this district allegesthlfdefendant is "a dorporationcreatedby and existing under the laws of the state of Arkansas, * * *' and a 'resident and citizen of .state of Arkansas." :This· is a correct statement of the legal 8tat'U8 of the' in this. state. The consolidated compahyQwns the toad inbothstatesj hut in Arkansas it is an Arkansas corporation, and in Missouriit corporation. Acts Ark. 1889,p. 43jRail'Way Co. v. Whitton'8 Adm1f', 13 Wall. 270; Muller v. [)OW8, 94 U. S. 444. On the 13th day of May, 1889, on the filing of the biltto foreclose, appointAd a receiver, and directed "that the said Circuit receiver p!1y,'olit of any income or revenue which inaycomeintohis hands, all just claims and accounts for labor, supplies,professional employes, and regular traffic balances, services; salaries of teD)ainipg'unpaid, aJ;ld' that, have been earned or mature within six months prior to the date of this order." This order was not intended to Its purpose confer on the receiver a present authority to pay wages due employes and such .like claims, the payment of which ought not to be delayed. The final order to be made on the subject was left for future action. Creditors of the railway company have filed intervening petitions, praying that their demands may be decreed. to .be a lien on the mQrtgaged property, and the receivers directed to pay them out of the earnings of the road, if sufficient for the purpose, and,.. if not, then out of the proceeds of the sale of the road. . A statute of this state approved March 19,1887, provides "that every ItIechanic,.builder, artisail,.;workma'.n, laborer, or other persOD"who shall do or perform, any work .01' labor UPOIl, or furnish any materials, ollinery, fixtures, or other thing towards, the equipment oX' to facilitate the operation ,of any railroad, and all persons who shall sustain ioss or dam,ge to person or property from any railroad for which ali:.tbility may eJliist at have a lien therefor ,upon the road-bed,buildings, equipnlents, income, franchises, and all otherappu.rtenances of said rail-

CENTRAL Tn'OST CO. ". ST. LOUIS, A.. &: T. RY. CO.

553

road, superior and paramount, whether prior in time or not, to that of all persons interested in said railroad as managers, lessees, mortgagees, trustees, and beneficiaries under trusts, or owners. But said lien shall not be effectual unless suit shall be brought upon the claim within one year after it accrued. Said lien shall be mentioned in the judgment dered for the claimant in an ordinary suit for the claim, and may be enforced by ordinary levy and sale, under final or other process, at law or in equity." This act was in force before the execution of the two mortgages by the consolidated 'company, and, as against these mortgages, it is conceded that the general creditors, coming within the purview of the act, have prior Hen on the mortgaged property; and it is claimed that under the statutes "fthis state, as construed by its supreme conrt, the first gage executed by the Missouri corporation creates no lien on the personafl property of the company in this state, as against the claims' of thegen" eral crl'ditors of the corporation. Watson v. LumherCo;, 49 Ark. 88,,4 S·. W; Rep. 62. .: ' j . It is not necessary to decide whether this claim: is well founded,be:caiJse I do not understand that either the trustee, representing the bon<tholders,or:the railway company, resist the payment of the debts aM demand$ against the, railway company incurred in the operation of the road in this state, for the brief period that has intervened sineethe cution of the mortgages. ,The statute quoted covers nearly or quite all the liabilities of the companyin this state. The few debts due from the railway company, which accrued more than a year before the appointmentof a receiver, are of such a meritorious character, and are so small in amount,that it is believed the best interests of those interested in :the property would be promoted by paying them. I do not understand this view of the matter to be antagonized by the plaintiff or defendant. The attitude of the parties in this respect is commendable. It seems to have been understood at the time'the receiver was appointed. that provision would be made for the pay'merit of all the debts and liabilities incUl;red by the present defendant since the execution of the mortgages.' Iuan official correspondence between the judge of the district GOurt and the circuit judge, on the subject of the debts of the railway company which the receivers should be authorized to pay, and which should bamadea. charge on the corp'1t8 of the mortgaged property, Circuit Judge .BREWER, in a letter to the district judge, says: ,'* * * I did not understand from the parties making· the application for a receiver that there was any desire or thought of cutting off any jUst claims accruing during the 1:ll'ief period which has elapsed since their mort.gage was given, and, if counselor party had any such idea, they much take judgment in the premises. ... ... *" The fullowing order will therefore be entered: . On this day comes the plaintiff, by Phillips and. Stewart, its attorneys, aud the defendant, by J. M. & J. G. Taylor, its attorneys, and the receivers,'b:rS. H. West, their attorney, andS. W. Fordyce, one of the receivers, in proper person, and the proper order to :bemade by the :cQurt

lm lthe subjeet of the' ofraebts and liabilitiea 'Of the defendant 000l'paJly by the receiversoameupJor be:ingnow' 'weIland. sufficiently .advised in the premises, .it is ordered that the following debts and,:demands against the company which ;have acarned. since the; execution iof .the. mortgages in suit-viz., the debts due·!rQm the railroad company for tickets and. freight balances,and f(i)r"wfork, hbor, materials, machinery, .fixtures, and;suppliesof every kind and character, done, performed, or furnished in the constfuction, ejc1;ellBion, repair, equipment; or' operation of said its branches liuJ.this state, and all liabilities incurred by saidQQrn,pany in the trans,portation :of freight and passengemi,' including damages. to person and 'property, and for,breachesofJcontracts for,the transp0rtation of persons andnproperty, and all ,claims, an<Ldemandsupon :which suit.has been heretofG'l'e brought or judgment,recoy;ered in the, United States or stale state, together withallrdebts and liabilities which the rainope,1iating said: road in including claims for injuries to persons and property-shall constitute a lien on.saidrl\iland all ' property dlppilrtenant ;thereto.; sUPerior and paramount to ;the,lien of the ,mortgages.setout in·the.,bill,· aspliQvided.by·the statute ofothisstatej and said ,road sbiillnot be :or, discharged from said lien: .until said debts and ·lill.bilities are paid.! i : Tb a ;:raceivers are auth(j)]jjzOO. and directed: to:.pay, all such debts and liabilities out of the of the road j or out of fund in theirhaods applica.ble to that pUrpoBfij'8Dd j :if not sooli$i' discharged, then tbersameshall be paid out theSf,lle ofthe road. ., .. ::The·bettel'practice,is :for:thejudgeor'oourt appqinting a receiver to stipulate :atthe:time, and as acomdition of the appointment of:a receiver, 'what:dehts:and liabilities oLthe railway ·otiithe.property,.and paid: bytbeJ:ooeivers·.. ··If the!mortgagee is. unwilling totlike a receiver on the terms'imposed,the foreolosurecanproceed withotit<ia"re,ceivership.: . But, if no G'rder is :made when the receiver is appointedi, it may be Iibsdickv;,jScOOll;99 U.8.,235, ;253;' Blai",v.Railroad 00.·:22 Fed. Rep. 471. · No complaint was made:inrthiscase, because the ol'der was not made when . The order liowmade·was, it seems, then.contemplated.The follQwing additional orders will be entered: . tPEl receivers in the operation of the road, .they may be sued in any court jurisdiction, or the claimJ1n,interveningpetitioq in t\lis cause, and .havehis'fdernandadjudicated in this court. Judgm.entsobtained against thei receiV-erB in the state courts whioh are not appealed:·frorn, and judgmenfiVirgairist theCOnipany not appealed from,aild 'stiperseded ondemands which the receivers are by the tenus of to pay, will, upon filing a transcript .of the same in this eourt,be . aUdited and ,aijo;wed as of course',1M: adjUdiCated claims against.the N'Othing .heJ;ein contained shall authorize the levy of an execution. :or.any 'other, writ or process., !0n·the property in the hands of the receivers; or 11ny inte.rferenae whate:vlu';' /with. their custody. or . 'of the .aam.e.

CENTRAL

S'l';LOU18( 'A,a;!'fl'. RY. 00.

The court is asked to qualify the order relatilig to judgments 'recOvered' in the state courts, by adding 'a proviso to the effect thatjwhen it is sh<)wn that the is for a.grossly excessive' amount, this court willreduce it to a just and reasonable sum. This court will not entertain the suggestion that its receiver will not obtain justice in the state courts. The act of congress gives the right to sue the receiver in the state court. Trwit Co. v. Railway Co., 40 Fed. Rep. 426. The state court has jnris.and its judgment against diction of the parties and the receiver of this court is as final and conclusive as it is against any other suitor. The right to sue the receiver in the state court would be of little utility, if its judgment could be annulled or modified at the discretion of this court. It is open to the receiver to correct the errors of the inferior courts of the state by an· appeal to the supreme court. ·But this court is not invested withlloppellate or supervisory jurisdictionover the state courts, and cannot annul, vacate, or modify their judgments. Randall, Huward, 2 Black, 585; Nougue v. Clapp, 101 U. S. 55l. It is true the act of congress provides that, when the receiver issiled, the "suit shall be subject to the general ,equity jurisdiction of in which such receiver or manager was appointed, so far as the same shall· be' to the ends· of justice." This clause of the act . est,ablishes no new rule, but is merely declaratory of the previously existing law. The receiver holds the property for the benefit of all persons having any interest in or lien upOIi' it.. The road is a unit. Broken into parts, or deprived of its roIling stock, its value would be greatly impaired. Suits, therefore, which seek to deprive the receiver of the possel3,Sion of the property, and all process ,the execution of which would· haYe that effect, are subject to the control of the court appointing the receiver, so f{lor as may be necessary to the . . . . . . . . , "marshaling of the ends of justice. The , ., . ' . , .. I assets, 'and the orderly distribu'tIOn of the fUbd or property according'to the rights and equities of the several pa.rties·in interest, is not to be in.' terfered with by the judgment or process of the court.. The ment of the state court is conclusive as to the Ilmoun't 'of the debt, but thetime,and,mode of its payment must be by the court ap., ... . ... ' ,. . pOint1ngthe receiver. The receiver should have the right to appeal from the judgments' of stute. courts. Appeals should not be taken. for delay I but that justice inliy be done. When the r,eceiver, in good faith, takes an appeal, he'sh'ould not be required by this 90urt to execute a 8uperoodealt' bond. is an officer of ,collrt. His possession of the property is the possession of the court. The! property of the railr.oad, stands as security for all the obligations of the court incurred' in its operation; The receiver, no more than the judge of the court, should be required to become personally bound as a condition of his appealing, in good faith,from the judgment of a State court rendered 'against him in his official! capacity. The court will ,not part with the 'of' the property until the obligations incurred' by the' receiver are paid, or properprQVililion is made tosecuretheip payment, · Co··

v.

556

'J'BDERAL REPORTER,

vol. 41,

Fed. Rep. 267, 269. The objection of plaintiff's counsel to the clanse of the order, as originally drawn, which required the receiver to execute wupersedeas bonds in cases which he appealed, is sustained, and that clause will be stricken out.

WILLIAMS 11. CITY ELECTRIC STREET

Ry. Co.

COircutt Oourt, E. D. A.rkatnsas. Maroh 26, 1811O.}
1. 'l'he difference between' railroads for general traffio and street railroads consists in their use, and not in their motive power. A railroad, the rails of whioh are laid ,to ,conforlU to ,the grade and surface!>f the street, and whiohis otherwise oonstructedso that the publio is not excluded,from' the use of any part of the street as ,apUblio way; whioh runs at a moderate rate of speed, compared to the speed of traftl,c railroads; whioh ,carries no freight, put only passengers; from one part ofa thiokly populated distriot to another in a town or city, and its suburbs, and for that , 'se rn,Dsits oars at sbQrt iPte,rval,s,', sto, , ! , pu,r Pll "pping at the street orossings to receive · "all-dll,i.scharge its a streey railroad, whether, ,the oars are propelled , , 'bY' animal at meclianio8l power. ' ','" -: ,' "
S'rREET RAILROADS. ,

2. S.ul'E-MOTIVliiPOWER-MUNIOIPAL CORPORATIONS.

S.

a oity, is its charter to contract for the of raUroads, it may authorlze suoh railroads to be operated by aDlmal or meohanlCal .' 'PoWer. " .
SAM:E:....ADDITIONAL SERVITUD,E.

, ,,' T,he operation of a railroad by mechanio8l.power when authorized by taw, , ' oDa 'publio street, is not 'additional servitude or burden:on land already dedi"ooted or cO,ndemnedto tile use of a publip stroot, and is therefore not a taking- of private property, but is a mod,ern and improved use, only, of the street asa publio highway, and affords til" baa 'owner 'of the abutting property, though he may own , the fee, bftne street, no legal ground of complaint.

all

" (Synabus by the OO'Wrt.)

::,',InEquity. On bill,fof no injunction against the operation of a street raIlroad with steam "' ' '8(Lm W. Williams;rorpla,intiff. ' .': Jolvn,B. Joines and JOh"f J,1. lIoore, for defendant.

':bALDWELL, J. A of the state of Arkansas providing fOf, the qrgapizationand defining the powers of municipal corporations prQvic;les

,

. '

, ',"

',,"Sec. 754. They shallbave power to provide for lighting the streets' andal. oft,he city by gas or andtp auth,orize the gas-' wo.tks and ofstreet railroads.' Sec. 7551 For the purpose of provldulg water, gas; or'street rlfilroads, the -mayor and council may contract with any person oil: to construct aM operate the same, and may grant to such, person or:compafny, for the time which may be agreed upon, the exclusive pri,vilege of. using the streets. andaljeys of such city for such purpose or ])ig., ' . On the 6th day of DePenlber, 1887, the city of Little Rock,.acting, on the ,authority of theabov&oql;1oted sections of its charter, entered hlto a cpntta'ct l indue forrnj' with' the defendant, by the terms of whioh the! defenc;l.\Ultwas ,graIlted the'rig_ht tocpustruct,maintaiu, and operate" On