American Construction Company v. Jacksonville, T. & K. W. Railway Company

Statement by Mr. Justice GRAY: These was two petitions to this court, each praying, in the alternative, for a writ of mandamus, or a writ of certiorari, to the United States circuit court of appeals for the fifth circuit.

In the first case (No. 14) it appeared that the following proceedings were had in the circuit court of the United States for the northern district of Florida:

On July 6, 1892, the American Construction Company, a corporation of Illinois, and a stockholder in the Jacksonville, Tampa & Key West Railway Company, a corporation of Florida, engaged in operating a railroad in that state, filed a bill in equity, in behalf of itself and of such other stockholders as might come in, against the railway company, and against its president and directors, citizens of other states, alleging that they had made a contract in its behalf, which was illegal and void, and unjust to its stockholders, and had declined to have an account taken, and praying for an account, a receiver, and an injunction.

On the filing of the bill, Judge Swayne, the district judge, made a restraining order, by which, until the plaintiff's motion for an injunction and for the appointment of a receiver could be heard and determined, the railway company and its officers and agents were enjoined and restrained from remitting, sending, or removing any of its income, tolls, and revenues from the jurisdiction of the court, and from selling, disposing of, hypothecating, or pledging any of its bonds of a certain issue at less than their par value.

On August 4, 1892, Judge Swayne, after a hearing of the parties, made an order appointing Mason Young receiver of all the property of the railway company; enjoining the railway company, its officers and agents, and all persons in possession of its property, from interfering with the possession, control, management, and operation of the property, and from obstructing the exercise of the receiver's rights and powers, or the performance of his duties; and continuing the restraining order of July 6th until the further order of the court.

On August 5th, Judge Swayne, on a petition of the receiver, and after hearing him and the parties, made an order authorizing him to pay certain interest and obligations of the railway company out of the income and money coming into his hands as receiver, or, if those should be insufficient for that purpose, to issue receiver's notes in payment of such interest and obligations, or, at his discretion, to borrow money on such receiver's notes for that purpose, the amount of such notes outstanding at one time not to exceed $125,000.

On August 27th, the railway company prayed and was allowed an appeal from the orders of August 4th and August 5th to the United States circuit court of appeals for the fifth circuit, and gave bond to prosecute the appeal.

On November 18th the construction company moved the circuit court of appeals to dismiss the appeal because that court had no jurisdiction to review the action of the circuit court in making those orders or either of them.

On January 16, 1893, the circuit court of appeals, held by Circuit Judges Pardee and McCormick and District Judge Locke, denied the motion to dismiss the appeal, and entered a decree reversing and setting aside the orders appealed from, except as to the injunction; modifying the injunction so as to permit the railway company to send away money for the payment of its bonds which had been regularly sold, and for the purchase of necessary equipment and supplies, and to restrain it from disposing of, at less than their par value, such only of the bonds of the issue mentioned as remained the property of the company; and instructing the circuit court to modify accordingly the restraining order of July 6th, continued by the order of August 4th, and to vacate the order of August 4th, appointing a receiver, to discharge the receiver, and to restore the property of the company to its officers.

On January 23d, the construction company filed a petition for a rehearing, upon the grounds, among others, that the circuit court of appeals had no jurisdiction to review an order appointing a receiver, and that its decree did not allow the receiver time to settle his accounts, nor provide for the payment of his notes in the hands of bona fide holders for value.

On January 30th, the circuit court of appeals denied a rehearing, and sent down a mandate in accordance with its decree, and on February 1st the mandate was filed in the circuit court.

On February 2d, the construction company moved this court for leave to file a petition for a writ of mandamus to the circuit court of appeals to dismiss so much of the appeal of the railway company as undertook to bring before that court the action of the circuit court in appointing a receiver and in authorizing him to borrow money upon receiver's notes, or, in the alternative, for a writ of certiorari to the circuit court of appeals to bring up its decree for review by this court.

In the second case, (No. 15,) besides the facts above stated, the following facts appeared:

On July 23, 1892, the Pennsylvania Company for Insurance of Lives and for Granting Annuities, a corporation of Pennsylvania, as trustee under a mortgage of the property of the railway company to secure the payment of its bonds of the issue aforesaid, presented to Judge Pardee a bill in equity, addressed to the same circuit court, against the railway company, praying for a foreclosure of the mortgage, for the appointment of a receiver, and for an injunction.

On the same day, upon this bill, and with the consent of the railway company, Judge Pardee signed an order appointing Robert B. Cable receiver of all its property, and declaring that the appointment was provisional, to the extent that any one having an interest in the property of the railway company might show cause within 30 days why the appointment should not be confirmed, and that the appointment should not 'affect or forestall any action the court or any of its judges may hereafter see proper to take on any bill heretofore filed in this court against said railroad company, wherein a receivership has also been prayed for.' This bill and order were directed by Judge Pardee to be filed of July 23, 1892, and were filed by the clerk as of that day.

On July 29th, the construction company filed in the circuit court a petition of intervention, setting forth the previous proceedings in the first case, and praying that the order appointing Cable receiver might be set aside and vacated.