678
.n,
I'EJUliRAL
vol. 62.
forhiD:l,.; iTb;e@\nyer of tb.e to' fthese complaJnt$ is , The; of the tre"lilurefls office have 'from $1,800 ,.From all-that: hti$ rbeen,,discloseQ. rin case, so far, the f;in3,llcial department; f)fthis company, and a, clear' rand distinctexhihition of its warrant e;x:penditurealilIDoderate as thilk ,Necelilsa.d1.r,tbea;J:J:egationsQfthe objectors as the visits of are Oll intQrIllatiQn alld .belief. They are Plat ,and denied positively and dil'ectlyb.rtl1e receiver;;who speaks of his own knowl· edge. has been shown. ,classQt object,ions has been eloqueJltly and earnestly preased,i$d iUs ;this: : The Cape Vall'ey, Railroad is 'IH9rporation Qft,he North,C/ilrolina, owing its conception and successfvl const!J1ctiQn·titJhe patriotlceffort of her own,peqple. Some of them!pavestak.ed fortunes on this adventure. The of their illterests and the management of their property shouId,:be in· the hands. of a citizen of North Carolina, Who would en· joytheconfideuce of his,pwn people,and would labor singly for their welfare. ,But in completing their purpose the promoters of this enterprise we!'e forced to go into a 'money market, and ask the aid of other. capital. In order :to securet:b.is, they invested the lenders withcGrtatn paJ;amountrl'lghts. whicl). every court, which the debt· ors themselves, are bound to respect. Desirable as it is that every e1fOl1:should be made to th,e promoters of this road, its original stockh91ders, its unseclIred credij;ors,from any this could ·be ,only by a 10D;g aqJPinistration of.the .otthe corporationl by denying to credito,11Sholding contract liens ,their clear rights, and. by postponing a a distant day, speculating upon an·lIncertain futureJ,J,t tAe expense of the holders of prior liens. Courts are instituted for, the investigation and adjustment of rights. Sentimental considel'atiOJ,lS, howevernlllch they, may disturb the judgment of a court, slwuld ,never control it. No ,citizen of North Carolina. was named or sugge!ilted at the hearing 1:)J anyone whatever. It is a matter ofregretthatMr. Gill is not a. North Carolinian. SurelY,hQwever., all being equal, it cannot be said, in this court, th·.tthis swgle fact !lillounts toa disqualification. The appointmellt of John Gill, h,epetofore made, as receiver in this case, is herebyconfirll1ed. , et,at y.A.UqUSTA, & K. R. CO. et al. CENTRALTRUSl1 00. OF NEW PORT ROYAL & W. C. RY. CO. et al. I(Circuit ,Court,D.South Carolina. August 16, 1894.) 1. : ; ,-f ': \ "', ; : (,,' _ , , '
RAILROAD .COMPANIES-CQl!'St)LIDATION-HATIFICATION:'
" An entered Into for It consolidation 01 rWveral railroad companies, which was lDi i'¢ompUance with the statute (Gen. St. S. C. § was executed by each board of directors. Mod submitted to the stockliolders of the, ,several' companies. The minutes of the action of the compilllies. confirming the agreement, were in evidence, but the"minutes of the other company had been lost. The old 'stock was surrendered. and the new certificates accepted. The
'
J>lIINIZY t'. AUGUSTA & It. R. 00.
679
new company took full charge and of all the componel,t roads without question or exception, and for years exercised such control, and immense advantage resulted to the railroad from such consolidation. Held. to show that the agreement was accepted and ratified. 2. SAME.
It was not an essential prerequisite to such consolidated companies aeting as a corporation that the agreempnt should have upon it the certificates of the several secretaries of each of the railroad companies that it had been accepted.
8.
CORPORATIONS-MoRTGAGES-RIGHT OF STOCKHOLDERS TO QUESTION VALlOITY.
Where an organization assumes to act as a corporation, issues bonds secured by mortgage, and puts the bonds in circulation, persons holding stock in the corporation. as such, cannot defeat the bonds and mortgage by alleging that the corporation was not duly incorporated. Gen. St. S. C. §§ 1427. 1428, provide that, on the consummation of the act of consolidation by several railroad companies, the rights, privileges, and franchises of each of the corporations, parties thereto, shall be deemed vested in and transferred to such new corporation without any further act of deed. Held, that where each of the corporll,tions, at the date of the consolidation, had outstanding bonds, secured by mortgages, under prover authority, the directors of the new corpomtion may. without the vote of the stockholders, issue a mortgage on the property of the new corporation in order to take up and substitute bonds of the new corporation for the bonds of the old corporations.
4.
RAIl,ROAD RIGHT OF DIRECTORS TO ISSVE MORTGAGE WITI10UT VOTE OF STOCKHOLDERS.
Bill by the Central Trust Company of New York against the Port Royal & Western Carolina Railway Company and others to foreclose a mortgage. The counties of Laurens, Spartanburg, and others file a cross bill denying the validity of the mortgage. J. R. Lamar, C. C. Featherstone, N. B. Dial, and S. J. Simpson, for complainants in cross bill, Laurens county and others. H. B. Tompki; , Lawton & Cunningham, and Mitchell & Smith, for defendants in cross bill. SIMONTON, Circuit Judge. This case now comes up to be heard upon the cross bill of the cities of Anderson and Greenville and of the counties of Laurens, Spartanburg, Anderson, and Greenville, and the answers thereto. It will be impossible to come to a conclusion upon the principles of law governing this case without a full statement of the facts. There were in the state of South Carolina several small railroads, independent of each other, but connecting at a common point, and, in a sense, auxiliary. One of these was the Augusta & Knoxville Railroad, some 68 miles in length, and completed from Augusta, Ga., to Greenwood, S. 0.; another, the Greenwood, Spartanburg & Laurens Railroad, about 66 miles long, having its termini at SpartanImrg and Greenwood, and passing through the town of Laurens; and yet another, the Greenville & Laurens Railroad, 36i miles long, connecting Laurens and Greenville; another, the Savannah Valley Railroad, extending from McCormack, S. C., to Anderson, S. C., soine 58} miles. 'l'hese five towns (Greenville, Spartanburg, Laurens, Anderson, and Greenwood) are the important trade centers in, upper South Oarolina; and these roads put them in close con-
680
FEDERAL REPOR'l'ER,
vol·. 62.
nection with the city of Augusta, Ga., and, through Augusta, with ,great ocean· highways... Of the]J}, the Augusta & Knoxville had the most importanttunction, cOn,necting their common center, Greenwood, with Augusta, and, to adopt a homely expression much used in the hearing of the case, was Uthe neck of the bottle," to this lletwork {)f i'aihritys. From Augusta there ran' the Port Royal & Augusta Railway, connecting Augusta with the harbor of Port. Royal, giving imtpediate access, to the ocean. The amalgamation and consolidation of these lines of railroad were fraught with so ,many desirable results as tOiseem almost a'natural necessity. They' go without saying. The Central Railroad & Banking Compaliy.. of Georgia ha:d an eye to advantages.. The several roads, were weak; some ofthem in an incomplete state; all of them deficient in plant, and more or less moribund. In various ways,by purchase of· stock and'. of bonds, by constrnction contracts, originally '. undertaken, or, lt$signed to it, and otherwise,-this great system obtained a contJ;olling voice in each of these lines of railwaYLand proceeded to take the steps leading to their consolidation. The people of Greenville, Spartanburg, Laurens, and Anderson had long seen the advantages to be derived by their counties, and the cities an,d towns in from the building of these several roads, and had, by public. subscription, shown their faith in them. The county of Spartanburg hal) issued couJ;l.ty bonds to the amount of $75,000 to pay a SUbscription of the same amount in stock of the Greenwood, Spar1Janburg & Laurens Railroad Company; the county of Laurens had issued county bonds to the amount of $150,000, and had invested $75,000 of the proceeds in stock of the same railroad compauy;, and a like amount in stock of the Greenville & Laurens Railroad Company; the city of Anderson had issued its bonds for $50,000, and had used them in subscribing $50,000 stock in the Savannah Valley Railroad; the city of Greenville had issued $25,000 in bonds, and had taken a like amount of stock in the Greenville & Laurens Railroad Company; and the county of Greenville issued $50,000 worth of bonds, and subscribed for the same amount of stock in the same railroad. Each of these counties and municipalities had representatives in the several boards of directors controlling these companies, respectively. Their consolidation having been determined upon by the Central Railroad & Banking Company. of Georgia, the controlling stock and bond holder, and the charters of each of the roads authorizing consolidation with other roads, steps were taken for the compliance with the statutory provisions of the state of South Carolina in such case made and provided. Such consolidation is permitted in South Carolina to any railroad company organized under the laws of that state, and having its track, in whole or in part, within this state, whenever the railroads proposed to be consolidated form a continuous line of railroad with each other, or by means of any intervening railroad. Gen. St.S. C. § 1425 (pub. Laws S. C. § 1536). These conditions were fulfilled in the present instance. The question of consolidation was submitted to each separate railroad company, and the result was the preparation and execution of formal articles of agreement
PHINIZY f1. AUGUSTA &: K. R. CO.
681
some time about 27th October, 1886, by and between the directors of the Port ROY'al & Augusta Railway, the Greenwood, Spartanburg & Laurens Railroad Company, the Greenville & Laurens Railroad Company, the Augusta & Knoxville Railroad Company, and the Savannah Valley Railroad Company, in which it was agreed to consolidate all these railroads into one company, to be called the Port Royal & Western Carolina Railway Company, under the provisions of the act of assembly of the state of South Carolina of 1882, to be found in the Statutes at Large of said state (volume 17, p. 795, §§ 14-20, inclusive, incorporated in the General Statutes as sections 1425, 1433, inclusive; Pub. Laws, §§ 1536, 1542, inclusive). This agreement provided capital of $2,000,000 preferred stock, $4,· 000,000 common stock, in shares of $100 each; the existing stock in all the railroads but the Augusta & Knoxville to be exchanged, dollar for dollar, in common stock of the new company, and the stock of the Augusta & Knoxville to be converted into a liability of the new corporation, and the holders to be paid the value thereof. This agreement contained, as its last and concluding clause: "Shall anyone of the companies named fail to enter into this agreement, the remaining parties hereto shall continue, perfect, and carry out this agreement upon the terms hereinbefore set out." This agreement was signed by the president and each director of each company, and was duly ratified and confirmed by the stockholders of the Greenwood, Spartanburg & Laurens Railroad, the Augusta & Knoxville Railroad Company, and the Savannah Valley Railroad, as their minutes show. The minutes of the Greenville & Laurens Railroad are not to be found; bUt, from the date of the agreement to the filing of this cross bill, this road has been included in, controlled by, and has been known as a part of, the Port Royal & Western Carolina Railway Company, without protest or objection or exception, so far as the evidence discloses, on the part of any one, and it may well be assumed that its stockholders also assented. The stockholders of the Port Royal & Augusta Railway Company, referred to, refused to confirm the agreement, and that company never has been recognized as a part of the Port Royal & Western Carolina Railway Company. This, as has been seen, did not, under the terms of the agreement, impair it as to the others, who, in its words, had agreed, in an event like this, to continue, perfect, and carry out the agreement. The agreement was duly recorded in the office of the secretary of state, as required by law; all the provisions of the act being complied with, except that the fact "that a majority of all the votes of all the stockholders of each company had been for the adoption of the agreement" had not been certified "upon the agreement by the secretary of the respective companies, under the seal thereof," which certificate is provided for in the act. The Augusta & Knoxville Railroad Company is a corporation of the state of Georgia, as well as of South Carolina. The Georgia act permits consolidation with other companies. At the date of the agreement, each of the railroad companies mentioned in it was under mortgage to secure outstanding bonds:
6S2
,,'!J1E#ERl.L BEPORTER,
vol. 62·. $660,000 500,000 300,000 630,000
:a'he Greenwood, Sparunibul1l' & I.JQUre!i9.B4Ulj.1()a4i in the SUIll of ·· Valley RaUr911,q,in the sUll\ of.......... ·.········· & taur?ns in the,sumpt & Knoxvllle :aftllroad. in tbesum of. . . . . · · · · · · · ·· · · ·
't4is havillg,peen .stock was issued in the new:\coxnpanYi and. there?f delivered, share ror share, in lieu of.tlie stm;k held in tp.e several companies; each of thecennties and cities, the cross bill,surrendering the,stl)ckheld byjt in the several compilnies, and receiving in lieu the sha.res in tlie. new company.. No one Of them availed St. S.O. (section 1543, itself 9f,the Pub.. JJaws), providing a; .:wbde of stockholders of COIlliiolidatiug companies ,vho,P1ay be unwilling to convert their stock of cQIllJ>uny; a pro,ceeding which into must. lie ",ithin 30'UI1Ys after the adoption of .the agreement .of co,ll!>olidaHon,not' aft¢r, its record.... After the' cdnsolidation was .made, the :J;>Qrt R'oyaf&'Western Oa;rolina Railway .lp.orWage it's tp the deritral Trust Com; pan;}' · York 19 secure' an. issue M 'coupon b()Irds; payable to bearer,l:Ic.htring ipterest,lit cent. pe:r annum, by coupons, to,the 'amqullt mortgage now in question. Of .· t.h".e.,.:s. . ,·. b.,o.n.d.s. . . . . .e ... o .the . e.·. ..re amountdfflrst 'mprtgagebo'nds .t of be.r.Augusta to re.tit.'e an equal & Knoxville Railroad. P9i#p3;ny. ,"Of. '1,460,000 was used in retiring slrtisfying the outstanding bonds of the otper companies in $88;,4Q6 in, taking up and canceling stock of AUg'llsfa& Company" and $321,600 served. for the. the Port. & Western Oarohna Rallway Qq'mpapy, in necessa-ry improvements and :additions to. its property. '. . .... .., . ' . Railroad &'13anking Oompany had become the owner The of allof these roads but the Augusta & Knoxville, and of if not. the sole owner of the stock of this lastwas the named railroad. So it became possessed. of nearly all of the bonds of the Port Royal & WesternOarolinaRailwayCompanywhich were issued. 'The trustee still hold,S the bOnds reserved for exchange with the of the Augusta: & Knoxville, and a part of. the other reserved,Ponds are, still on hand, The & ()f Georgia hypothecated aU ofits bonds-$1,460,OOO-with the Central Trust Company of New York, and a number of other securities, as collttteral .to a loan effected with the trust company. been paid on these bonds 'of the Port No in.terest coupons Royal& Western OarolinaRailway Company, and the Central Trust Company, as trustee holding the mortgage securing them, brought the bill't.o the' to which cross. bill was filed. Thi,s trust company holds many of these bonds, as ;hasbeen stated, as coUateral.'The bii.l,hOwever, is filed by it as trustee, and other parties, to be' holders, .by purchase, of the bonds, have proved them in this suit.. . . .' Fronl'·the dare of thefirsttill:!eting of the Port Royal & Western Oarolina Railway Cempany.to tbet>re13en.ttime, the stock in that
of
PHINIZY V.AU(;USTA '&'K:k;oo.
683
oompany held by these various :municipalities has been repre-sented at its annual meetings; and gentlemen ' of excellent character and standing, leading citizens of the municipalities, holding few, in some cases no, shares in the company, have served on its board of directors as representatives of the municipalities. There appear many irregularities in the time and mode of selecting them. Yet their service was a matter of notoriety, their right was never disputed, nor were any other persons ever selected, regularly or otherwise, to serve in the places they filled. The question made by the cross bill is as to the validity of the mortgage which the original bill seeks to foreclose. The cross bill denies that there is, or ever has been, a lawful corporation known as the Port Royal & Western Carolina Railway Company, and that all so-called corporate acts alleged to have been performed by it are void. This averment is made on many grounds. They go to fraudulent conduct in getting up the agreement for consolidation, a want of compliance with the provisions of the acts of assembly in such case made and provided, and to improper and unlawful conduct of the Central Railroad & Banking Company, in possessing itself of the bonds issued by the company. It is also denied that the mortgage is valid, because it was executed under a vote of the directors, and not of the' corporation. It is claimed with great earnestness that one essential feature of this consolidation-the inducement controlling the counties and cities-was that the Port Royal & Augusta Railroad Company formed a part of it; that the name of tbis company was inserted in the agreement and in the title -of the new company; and that the failure upon the, part of this company to join in the agreement invalidated it, especially as this failure was brought about by the machinations of the Central Railroad & Banking Company; the chief promoter of the enterprise, in order to suppress a competitor.Whatever may have been the hopes, expectations, or motives of the parties to this agreement, its validity must be determined by the considerations expressed in it, and not by those dependent on extraneous parol evidence. This agreement expressly provides for the failure of anyone of the companies named in it to enter into the agreement, and binds the remaining companies, notwithstanding such failure, to continue, perfect, and carry out the agreement upon the terms set out The agreement is the joint agreement of ·the directors of these several corporations, under the corporate seal of each. It proposes the consolidation of these companies. It prescribes the conditions and terms, and the mode of carrying them into effect It gives the name of the new corporation, the number and names of the directors and other officers; declares who shall be the first directors and officers, and their places of residence. It gives the number of shares of the capital stock, the amount or par value of each share, the manner of converting the capital stock of each of thecompaIiies into that of the new company; that is to by the .purchase of all of the stock of the Augusta & Knoxville, and by the exchange of the new stock with the old stock, share for share, of the other companies. When it is considered that the Augusta' & Kilo:x:ville was absolutely 'necessary to this whole scheme, and,
684
1'J'l])ERAL REPORTER,
;without its would have Jailed,-:was in fact the necK of the bottle aITangement was wise and natural. The 'u,rther states when and how the directors and of· ficers shall be chosen. Oomparing the agreement with the words of the act, it complies, in ipsissimis verbis, with its requireme:J;lts. Pub. Laws S. O. § 1537 (Gen. st. S. O. § 1426). The agreement, 4aving beenerecuted by each board of directors, was submitted to the of the s¢veral companies. The evidence discloses the minutes of the' action of three of them, confirming and. approving the agreement. The minutes of the other company have been lost, and callnot be produced. But we have the fl:l.ct that the old stock was surrendered, and the new certificates accepted ; that the new com· pany took full 'cllargeandcontrol of all the component raih'oads, without question or exception, and has for years exercised this conWhen we consider these facts,and the immense advantage to the railroads thi!!, consolidation, and the great public benefit therefrom; that each railroad was rescued from a moribund condition, and put in condition for traffic; that the railroads from Greenville, Anderson, Spartanburg, Greenwood, and ·Laurens were an to market,-we cannot avoid the conclusion that the agreement was accepted and ratified. The agreement was then recorded, as required by law, in the office of the secretary of state: It did not upon it the of the several secretaries of each of the railroad companies that it had been accepted. Was this an essentiaJ prerequisite before the consolidated company could .as a corporation? It would seem that, at the most, this was only evidence. of the fact,-the best and most conclusive evidence,that its a'bsence could .be supplied aliunde. Here note that Wiper l'Iection Gen.. St. (section 1543, Pub. Laws) an objecting would lose his remedy if he did not apply within 30 days from the date-not from the record-of the agreement. It nll-l!!lt be· kept in mind that the consolidation of railroads does not create a new corporation, with powers of its own, distinct from, greater or less than, those enjoyed by the consolidating companies separately. It is a method provided byJaw for the formation of a cQpartnership between railroad corporations, by which, if the expression may be used, they pool their franchises and property, and are enabled to actln complete harmony under one head, as a unit. This unit possessest}le powers of its comp<:ment parts,-no more and no less. Section <l53$, Pub. Laws (Gen, St. s. O. § 1427). And the act authorizing it provides a method of advertising the state that this copartnership has been formed. No further grant of a franchise is necessary, nor is any giyen. Indeed, it is an accomplished fact, z:equiring no. further act or deed on the part of the. state, or anyone else. Gen.St. § 1428 (Pub. Laws, § 1539). At all events, the consoli· dated company assumed. to act as: a corporatioll, and issued its coupon bOl1ds, by mortgage, and put these bonds in circulatiw.. These bonds' and thismorf;gage are now resisted by parties hold:ing stock in the corporation! as sucb, permitted to intervene in thi.$ case in Order todothatwhicJ1 the corporation could, but will not, do. "A. who has"g\veJil bond to a corporation is not
PHINIZY II. AUGUSTA & K. R. 00.
685
allowed to defeat the bond by alleging that tbecorporation was not duly incorporated, nor can a corporation defeat its bonds by alleging a want of lawful incorporation. A person who mortgages land to a supposed corporation cannot defeat a foreclosure of the mortgage by alleging that the mortgagee is not a corporRtion. Nor can the corporation itself, having given a mortgage, defeat a foreclosure by such a plea." Cook, Stock, S. & Corporation Law, § 637, and eases cited; W'allace v. Loomis, 97 U. So 146. Assuming to act as a corporation is claim of a franchise. If invalid, it is an ofe fense to the sovereign, cognizable by it alone. "No one is allowed to assert that the corpoI"ation is dissolved, or its franchise is forfeited, or its incorporation illegal, until after that result has been decreed by a court in a proceeding instituted for that purpose." Cook, supra. "In general, the courts do not allow parties to suits on contracts to question the due incorporation of a company which it was possible to incorporate, which has attempted to incorporate, and which has acted as a corporation." Id. n is further objected that this new mortgage was not submitted to the corporation for approval, but was the act of its directors. Under the law of South Carolina (Gen. St. S. C. §§ 1427, 1428; Pub. Laws S. C. §§ 1538, 1539), it is provided that upon the consummation of the act of consolidation the rights, privileges, and franchises of each of the corporations, parties to the same, shall be taken and deemed to be vested in and transferred to such new corporation, without any further act and deed. Each of these corporations, at the date of the consolidation, had outstanding bonds secured by mortgages nnder proper authority. The main purpose of the new mortgage was to take up them, and substitute the bonds of the new company. The bonds and mortgage so substituted were authorized and sustained by the same powers. "The directors alone, without the vote of the stockholders, may authorize a mortgage to be made; and, even though there is a question as to their authority, the validity of the mortgage, as against the corporation, is established by its affirmance of it by the issue of bonds under it." Wood, R. R. p. 1951, § 461, quoting McCurdy's Appeal, 65 Pa. St. 290; Hadden v. Railroad Co., 7 Fed. 793. "If the act authorizing the mortgage requires a concurrence of the majority of stockholders, it is held that this is a requirement in which the public have no interest." Thomas v. Railroad Co., 104 ill. 462. The question now under consideration is the validity of this mortgage in the hands of the trustee. Nothing is decided with respect to the claims of other than bona fide holders of the bonds held under it. With regard to the rights of the Central Railroad & Banking Company, they cannot be passed upon at present, because this corporation is in no sense a party hereto. For the same reason, it cannot be decided how fur the pledgees of these bonds are affected by the defects in the title of the Central Railroad & Banking Company, nor can a decision be made as to the misuse of any of these bonds. All these questions can come up, and can be decided, when proof is made, or attempted to be made, of bonds in the hands of holders presenting them. Nor is the case ripe for an opinion hoW' a decision declaring the invalidity of bonds under
this :afteetithe'tlgMsloflhol'ders ;{)f bonds covered by separaw th0rtgttgHoIl l tMi.:tl8everaJ. roads,' who exchange theirr!bondl'l'fol' the new! bonds.,· .All' that is! now decided is, that the mortgage'setup;in:theori:gihaJ bill Central Trust Company of New')York, npoxfthe franchises,propertY,atld assets of the<'Port Royal & Western'Cal'olina Raifway' GOIllpany, is a good mOrtgage, and that :the rights of bona fide holders ,of the bonds isand without ,notice, will be protected rand kis so ordered.: The crossbill will be retained for further:p,rl)ceedings in this,c81'use, and will not be diSmissed. .'fr " ,
,GORDON et al. v.,NEWMAN., i(Clrcult Court (jf Appeals, Fifth! Circuit. June 25, 1894.) 'I ' , ,No. 243. 'I'
,f9r foreclos'];Ire of raHroad mortga&,es qirected that the' ,p,ropei:ty be any .and ,!ill' liens .t>ri8f to the lien' of the.r' mortgages and had Mt been' and" adjudicated, and .sjlbjeqt· to (:el'ijficMes authorized, declaring said 'f: afirsj:llnd 011 them ll;nd ·.. the ,4.fter the s\lle. a made. Qn an 1 "'clMnii'of it mecHanic's llei:l,onp:l,rtoHheprop$rty;presented before the certmdtes Were; authotlzed. allOWed such lien as a sllPslstJngflrst llellon thepl'operty.8Jid payb:l'ent of· the amount "., bY, tb ill U .. .. ..rchase,r, . . l1!l.'QIl(l,efa.u.lt., .a .... the. ,p.r9pe.rty:. an.d this ,d.ecree' . aft)rmed,?u appeal; ):Iy thesuprerpe court", that.lti;l enforce'ment't!otiId pot by of certificates claim't'1hg,ptloritY'0'\tell 1'such' Hen. as they"were bouij(lll 'by: the decree as and: because an inllunction fpr:such ptJrpose,' in effect, stayed of ,final de<;1;ee or the, supl'emecour:t. ,
CERTIFIC,ATES-PIUORITY OF.
,i:TWs'!was a suit. by ,for .an injunction t(l
Strobel & of a decree.
0Ilfue.,9tb of Januaw, :theGenulI.I'r!:pst COlOPiuW of New York filed a.gainst the ShefIield& Birlphigham coat;, troll & RailWaY 'Company, in the clrCUitcourt of the UnltedStates for' the \tiorthern dlstI'icfof Alabama, its bill WfQreClose two certain mo,r1:gages, ,iOn the 12th . of Janual'Y a receiver 'Was appointed" and took of tbe. mortgagep w,-opero/. On the 11th Febr;l,1R17, Gordol1,. .Lareau, a lien 'me three furnaces 'and one acrll .of land which were alsocovijted by the ,mortgages sought to be foreclosed in t1iesuit just referred to. a request 'Was filed by' the receiver, asking authority to, issue amount of$l50,OOO tor tPe purpose of raising mOJ;lei, to. pay 1;a;x:es on a P\?l'tl0n. of the land,a,ndfor other objects stated in the prayer. This petition was granted on the 11th otJuly, 1889. The issue .of receivet"scertificates was consented .' \:1> by the trustee under the mortgage, and the interlocutory order: authorizing the certificates::llltatedthat they were 1 ·, a fir,s.t..lien. R,n t4.e w h Q.,.le:.:J?l.'O.pertiV.i.· . n ()lJ,th . .. Of. .. . .. .. ...· 188'J., . a final decree .. of forec1psure waseJ,ltered ,on bill .of .· the Central 'J.1rust Company, the decree;am6ng as follows: 'It is ,further ordered" ndjudged, mil' :that' Bttill 'snle· shall·; be made BUPjeet to any and all .-UeIlft 1:eo'lfe11ing or etlilbl'acing said,pr.ol!lerty:;,:or premises, or ally part thereof, e. u.ppn. '.!il.'14;P,rope..rt.. r.l:Qr'. to. the lie.u .Of t1l e mortga.gas. . .. .. ,this .S:Uitl uAt,Dee.n ascertained. ,anll adjudicated 'b:V: this'· ¢blfrt,!IDd su,bject, to ,ilie receiver's cettiflcates heretofore autl1M'ifJMhtlj he Issued by saitl i J. '0;1,dl1ldnberlain, receiveri. to an amount t.