Farmers' Loan Trust v. Waterman/Opinion of the Court

On the twenty-fourth of July, 1877, a decree was entered in a     suit pending in the court below for the foreclosure of      certain mortgages on the property of the Indianapolis,      Bloomington & Western Railway Company, directing a sale of      the mortgaged property and an application of the proceeds to      the payment, among others, of 'all such *  *  * claims and sums      of money as shall be hereinafter allowed by this court *  *  *      in preference to the liens of the hereinbefore-mentioned      mortgages or deeds of trust for debts due by said railway      company for work, labor, supplies, and material done and      furnished during the six months next preceding the first day      of December, 1874, *  *  * which payment for debts due as last      aforesaid for six months prior to December 1, 1874, shall be      made into court without prejudice to the right of the      Farmers' Loan & Trust Company to object to the same, and to      appeal from any order or orders which may be hereafter made      by the court directing the money so paid to be distributed to      the various claimants thereof.'

At the time this decree was made it was not known how much     the debts  for labor and supplies would amount to. That     matter had been referred, on the fourth of June before, to certain special      masters to take testimony and report, but their report had      not been filed. To meet this condition of the case the decree     further provided that on the delivery of the deed the      purchaser should pay into court enough of the purchase money      to satisfy any amount that might in the further progress of      the case be found to be owing. It was also specially provided     that the reference to the master, which had been made and      which was approved and continued, should 'in nowise abridge      or impair the right of any of the parties hereto to prosecute      an appeal from any order or orders of the court allowing or      disallowing said claims, or any part thereof, and declaring      the same to be prior and superior to said mortgage.'

The Farmers' Loan & Trust Company was the trustee of the     mortgages having the paramount mortgage liens on the      property.

On the sixteenth of November, 1877, the special masters filed     their report as to the labor and supply claims, allowing      1,163 separate claims which had been presented to them by      petition in accordance with the provisions of the order of      reference, and which, in their opinion, had been established      by the evidence. Of these claims only 14 were for sums     exceeding $5,000. All the rest, being 1,149 in number, were     in every instance for less than that amount. On the coming in     of the report numerous exceptions were filed by the trust      company. These exceptions remaining undisposed of and no sale     having been made under the decree, 'on motion of the Farmers'      Loan & Trust Company' it was, on the eighth of May, 1878, 'by      way of further directions for the execution of the decree *  *      * of date July 24, 1877, *  *  * considered by the court, and      ordered, adjudged, and decreed that the said original decree      be and the same is hereby amended and modified as follows: *      *  *

'(13) That the sale be made * *  * subject to *  *  * such *  *  *      claims and sums of money as are now under consideration by      and as shall be hereafter allowed by this court, *  *  * and      affirmed by the supreme court of the United States on appeal,      should an appeal be taken, in preference to liens of the      hereinbefore-mentioned mortgages or deeds of trust for debts      due by said railroad company for work and labor done, and supplies      and material furnished, *  *  * without prejudice to the right      of the Farmers' Loan & Trust Company to object to the same,      and to appeal from any order or orders which may be hereafter      made by the court in relation thereto; *  *  * and such back      pay, labor, and supply claims as shall be finally adjudged      against the property herein directed to be sold, after an      appeal so taken, shall be assumed by the purchaser or      purchasers, in addition to the amount of the purchase money      so bid. * *  * And the payment of the amount of any claims so      allowed, *  *  * shall not be required to be made at or prior      to the time of the delivery of the deed, but the said sale      shall be made subject to, and the purchaser or purchasers of      said property shall agree to pay off so much of, the said      claims or sums of money as shall be finally allowed in the      progress of this cause, on or after such appeal, and the same      shall be paid and discharged by said purchaser or purchasers      within six months after the entry of an order of this court,      upon a mandate of the supreme court, concerning matters so      appealed from being filed in this court, and the said deed      shall be delivered without payment of said claims or sums of      money, or any part thereof, upon the purchaser so      conditionally agreeing to pay so much and no more of such      claims and sums of money as may finally be allowed on such      appeal, and it shall be competent for the court to enforce      hereafter, by proper order or decree herein, or to be added      to the foot of this decree, any of the provisions or      conditions of this thirteenth article of this decree.'

On the thirtieth of October, 1878, the mortgaged property was     sold under the decree of July 24th, as thus modified, to      Austin Corbin, Giles E. Taintor, and Josiah B. Blossom,      'purchasing committee, in trust for certain bondholders under      the trusts expressed in certain agreements, dated December      20, 1875, and a supplement thereto, dated July 25, 1878,'      copies of which were attached to the report of the sale. These agreements had reference to a plan adopted by certain     of the stockholders, bondholders, and general creditors, for      the purchase of the property, and defining their respective      interests therein, if the purchase should be made.

The sale was confirmed by the court on the thirty-first of     March, 1879, upon the application of the purchasers, and the master      was directed to make and deliver to the purchasers a deed of      the property, subject, among other things, 'to *  *  * such *  *      * claims and sums of money as are now under consideration by      and as shall be hereafter allowed by the said court, *  *  * in      preference to the liens of the hereinbefore-mentioned      mortgages or deeds of trust, for debts due by said railroad      company for work and labor done and supplies and material      furnished during a period not exceeding the six months next      preceding the first day of December, 1874; *  *  * but nothing      herein contained shall be taken to prejudice the Farmers'      Loan & Trust Company, or the said Austin Corbin, Giles E.      Taintor, and Josiah B. Blossom, their successor or successors      and assigns, or any of them, to object to the same, or to      appeal from any order or orders which may be hereafter made      by the said court, or either of them, in relation thereto, to      the supreme court of the United States, which said *  *  * back      pay, labor, and supply claims *  *  * finally adjudged against      said property hereby conveyed, are hereby expressly assumed      by the said Austin Corbin, Giles E. Taintor, and Josiah B.      Blossom, purchasing committee, their successor or successors      and assigns, as and for a charge and lien upon the property      hereby conveyed, *  *  * prior and superior to any interest or      estate hereby vested in them, or any of them. * *  * '

After this deed was delivered a further reference was made to     take testimony and report as to certain special matters      connected with the claims before reported on. Upon the coming     in of the report under this last reference, exceptions were      filed by the trust company and the purchasers, and on the      thirty-first of October, 1881, the court, after a hearing,      decreed 'that said Austin Corbin, Giles E. Taintor, and      Josiah B. Blossom do, within 60 days, excluding Sundays, from      and after the date of the decree, pay to said several      intervening petitioners and claimants the several amounts set      opposite their respective names; that is to say, to Charles      F. Webb $270.' Then followed the names of all the other      separate claimants, with the amount due them respectively set      opposite.

From this decree of the thirty-first of October the trust     company and Corbin, Taintor, and Blossom took the present appeal,      which the appellees having claims less than $5,000 move to      dismiss as to them for want of jurisdiction. Those whose     claims exceed $5,000 have filed motions to affirm as to them,      on the ground that it is manifest the appeal was taken for      delay.

To our minds it is clear the trust company has no interest in the questions arising under this appeal. That company represented the bondholders for all the purposes of the foreclosure of the mortgages under which it was trustee, but the interest of the bondholders in the suit ended when the property was sold and the proceeds distributed. As the purchasers took the property subject to the lien, if any there was, of the back-pay claims, the bondholders, as bondholders, cannot in any manner be affected by the result of the proceedings to determine whether such lien exists, and if so, to what extent. All questions as to such matters are between the purchasers and intervening petitioners alone. The decree ordering a sale subject to the claims was entered on the motion of the trust company, and the appeal is in express terms confined to the order establishing the claims against the purchasers. If, by reason of the agreement under which the purchase was made by the purchasing committee, any of the bondholders secured by the mortgages to the trust company are entitled to share in the property, they are for all such purposes represented by the purchasing committee, and not by the mortgage trustee. The trust created by the mortgage was fully executed when the foreclosure was complete. After that the purchasing bondholders became purchasers of the mortgaged property, and their rights are to be determined accordingly. Neither is it of any importance that in the decree of sale as modified, as well as in that originally entered, a right of appeal by the trust company was expressly reserved. Only parties to a decree can appeal. If a party to the suit is in no manner affected by what is decreed, he cannot be said to be a party to the decree. A reservation of the right to appeal has no effect if there is no decree from which an appeal such as has been reserved will lie. In the present case, as has already been seen, the several claimants or intervenors and the purchasing committee were the only parties to the suit affected by the decree of October 31st. The purchasing committee became parties by their purchase to the extent that was necessary to protect their rights in the property purchased against any further orders to be made in the execution of the decree under which they bought. The trust company, by consenting to the decree ordering a sale subject to the back-pay and supply liens, in effect voluntarily abandoned that part of the litigation, and left it to be carried on thereafter between the several claimants and the purchasers alone. Neither the trust company nor those it in equity represents can gain or lose by either a reversal or affirmance of the decree appealed from.

Our jurisdiction, therefore, depends on the case as it stands between the purchasing committee and the several back-pay claimants. As we have shown at the present term in Ex parte Baltimore & O. R. Co. ante, 35, if distinct causes of action in favor of distinct parties, though growing out of the same transaction, are joined in one suit, and distinct decrees are rendered in favor of the several parties, these decrees cannot be joined to give us jurisdiction; but if the controversy is about a matter in which several parties are interested collectively under a common title, and in the decree, after establishing the common right, a division is made among the claimants according to their respective interests, this separation of the decree into parts will not prevent an appeal.

We are satisfied the present case comes under the first division of this rule. There is a question involved common to all the intervenors, that is to say, whether back-pay and supply claims of any kind are to be paid by the purchasers; but if that is settled in favor of the claimants it will still have to be determined whether each one of the separate claimants has a claim of that kind. In determining this question each claim will depend on its own facts. A recovery by one claimant will not necessarily involve a recovery by another. While the rights of all depend on establishing a liability of the purchasers for the payment of debts of a particular kind, no one can recover unless he shows that there is owing to him individually a debt of that kind. There are, therefore, necessarily in the case as many separate and distinct controversies as there are separate claimants and intervenors. The purchasers have the right to contest each claim separately. They stand in the same relation to the several claimants that the ship-owner did in Oliver v. Alexander, 6 Pet. 143, to the seamen, or the alleged fraudulent grantee in Seaver v. Bigelows, 5 Wall. 208, to the judgment creditors. The several intervenors do not, as in The Connemara, 103 U.S. 754, claim under one and the same title, and it is material to the purchasers how much is allowed to each the every one, for the amount of the recovery is not determined by any fixed sum, but by the aggregate of all the separate sums allowed the several claimants individually. The amount of the recovery by one is not affected in any manner by what is allowed to another. Clearly, therefore, distinct causes of action in favor of distinct parties have been joined in the same suit, and distinct decrees rendered in favor of the distinct parties. This is not only the form of the decree, but the substance.

There is no question here of a fund for distribution. The purchasing committee bought the road subject to the liens of the various back-pay and supply claimants, if any such liens existed. The claimants are seeking to establish and enforce their respective liens. They, in effect, join in one suit for that purpose, but both their claims and decrees are separate and distinct.

It follows that the motion to dismiss must be granted, and it is so ordered.

The question involved in the appeals from the decrees for more than $5,000 are not such as we are willing to consider on a motion to affirm. The motion for an affirmance is therefore overruled.