Page:Federal Reporter, 1st Series, Volume 6.djvu/112

 lOft FEDERAL REPORTER. ���Faembbs' Loan & Teust Co. v. Geeen Bat & Minnesota �E. Co. �[Cvreuit Court, B. D. Wisconsin. January, 1881.) �L RArLBOAD— MOBTGAOK FoBECLOSUKE — PETITION FOE BlLL OF Rb- TIEW. �A trustee flled a bill to foreclose two railroad mortgagea, January 23, 1878, and obtained a decree of foreclosure April 3, 1879. EM, upou petition of a second-mortgage bondholder for a bill of review, filed January 10, 1881, tirithin a few days before the sale under the decree of foreclosure was advertised to take place : �(1) That an adjudication in such decree thatpartof the second- mortgage bonds were issued in exchange for interest coupons due upon the flrst-mortgage bonds, and were, with interest thereon, " a lien under the said flrst mortgage, and constituted a part of the debt secured thereby," did not entitle such second-mortgage bonds to a preference over the flrst-mortgage bonds. �(2) That, theref ore, where the decree had provided that the greater part of the purchase money, upon the sale of the railroad, might be paid in cash, or flrst-mortgage bonds, or such second-mortgage bonds as had been therein adjudicated to be secured by said flrst mortgage, at such percentage as the court should authorize at the confirmation of the sale, it was not necessary that such decree should further pro- vide for a cash payment at the time of the sale sufflcient in amount to liquidate in fuU such second-mortgage bonds as were secured by said flrst mortgage. �(3) That a course of procedure preseribed by the mortgages, to be pursued in case of a sale by the trustee without foreclosure, was not binding upon the court in proceedings to foreclose such mort- gages. �(4) That, theref ore, upon a foreclosure sale, the court was not bound to adopt the provisions of the mortgages, as to the application of the bonds upon the bid of a purchaser, or as to the proportion in which such bonds should be so received, or as to the manner in which their value should be ascertained. �(5) That where the decree authorized the mortgage bonds to be applied on the purchase of the railroad upon the foreclosure sale, it was not essential that such decree should determine the percentage value of such bonds before the sale actually took place. �(6) That, therefore, a provision in such decree that the purchaser, after the payment of a certain specifled amount in cash, could pay the balance of his bid in outstanding bonds and coupons, secured by the flrst mortgage, " at such percentage of the face value thereof as this court shall, at the approval of said sale, authorize ^nd direct," was not erroneous, and was similar to that inserted in ail railroad mortgage foreclosure sales entered in the (seventh) circuit. ��� �