FARMERS' LOAN &:,TRUST CO·. V.CHICAGO &: A. RY. CO.
659
"And the court now reserve&the right to resume. the .possess,ion of said railroad and other property in case the said Chicago & Erie Railroad Company Elball hereafter fail or refuse, upon the or4er of the court, to pay into this court any money allowances for costs, expenses of the trust, or for claims against said receiver; and fofthat purpose the court retains jUl'isdiction of the said railroad and other property." If this did not make the Chicago & Erie Company a party to the cause within the meaning of equity rule 9, which authorizes the issue of the of assistance for the use of a party, it certainly entitles it. to the benefit ohule 10, whereby it is declared that"Every pl.'rson not lJeing a party in any. cause, who has obtained an order, or in whose favor an order shall have been made, shall be enabled to enfurce obedience to such order by Ihe samepl'Ocess as if he were a party tO'the cause; and every person not being a party inanycallsfl, against whom Obedience to any order of the court may be enforced, shall be liable to the same prouessfor enforci ng obedience to such order as if he were a party to the cause." The petitioner is therefore entitled to the writ, if the facts justify the granting of it. The answer of the respondent has in it the proposition that, by reason of the eOlJduct of the'receiver "as agent and representative of the mortgagees and bondholders;" his receipt of rent from the pany,and other facts alleged, "a general tenancy was created between the mortj(agees and bondholders, of the one part, and the Wabash Railroad Company, of the other part." In. respect to this it is enou/rhto say that the receiver did not make, or attempt to make, anyarrangement which should extend beyond the term of the receivership. Without' the consent of the cOlnt, I suppose, he could not have done so. The fact is ,that, during the possession of the receiver, he complied with the terms of-the contract of June 1,1887, in 'so far as they were obligat6ry upon the Chicago & Atlantic Company, so that there was, by reason of tbereceivership, no breach of the contract in that hehalf; and if, instead of a saIl.', the suit had ended in the restoration of control to the Chicago & Atlantic Company, the relation between the two companies in respect to that contract would have been the same-the contract would have been.jiist as binding upon them-as ifthere had been no receivership; and so, in. the language of the answer, it remained true, until the receiver turned the property over to the petitioner that "the reC'eiver and the Wahash Company entered upon the joint use and occupation of the railroad; * * * the receiver holdil'lg under bis appointment, as af<;lresaid, and the Wabash :Railroad Company holding and occupying * * * under the aforesaid contract of lease." . That contract, whether it created a tenancy or an easement, having been made pending the suit, the rights of the Wabash Company under it were necessarilybeld subJect to the decree, as much as if that c6mpany had been a pa.rty to the at the argumentthat the was made beaction. ; 'the fore the. filing of of Bippus jl'l immaleria1,because 9f,theFarme,rs' Loan & Tr.ust CompltnysQughta fQreclpsure of both mortgages, and consequently there was when that contract was made. in raspectto ,both mortgages,. R'lispendlms as complete;I suppose f : as ifthtt
660
FEDERAL REPORTER,
vol. 44.
cross-bill had also been pending. Besides, the decree upon the first mortgage alone is a complete foreclosure of the rights of parties claiming under contracts made with the mortgagor after the commencement of the suit to foreclose that mortgage. When, therefore, the purchasers at the sale, in accordance with the terms of the decree in that respect, gave notice to the master commissioner of their election "to abandon and disclaim" the contract of June 1, 1887, with Ashley and Talmage, and all supplemental agreements, the resuft was that, immediately upon the surrender of possession by the receiver, all right of possession in the Wabash Company under that contract ceased; and, if that company has any ground for rightful resistance to the petitioner's claim for full and exclusive possession, it must be because, by conduct or by contract, the petitioner has conferred that right since it took possession at the hand of the receiver. In respect to this point the attorneys for the Wabash Company, in a brief filed since the argument, say: "On the foregoing facts, the first question presented is whether this court ought to attempt, in this proceeding, to determine the merits of the controversy now pending and being prosecuted in good faith between the same parties in. the state court. If the Chicago &:; Erie Company has done nothing Which entitles the Wabash Company to the injunction which it prayed for and obtained in the state court, then the Chicago & Erie Company can make its defense there. Both parties being citizens of the state of Indiana, the state court was the only tribunal to which the Wabash Company could appeal for the protection of its under any express or implied contract which had sprung up between September 1st and September 22d between the parties, which was after the Chicago & Erie Company bad taken possession or assumed control; and we submit that no ,summary process from this court ought to be employed to cut down any such rights, in case they do exist. And especially is that true when such rights are asserted in·. good faith, and supported by evidence strong induce the state court, upon a full hearing, to grant the relief prayed for. The cases cited and relied upon by petiti,oner are those in wh;ich the parties in possession set up no claim of right through anything arising SUbsequent to the sale. But here that claim is made, and it is made in good faith, and upon evidence sufficient to cause the state court to issue an injunction, and our contention is that the question whether or not that injunction was or wrongfully issued is an issue which ought to be left to the tribunal in which it is pending. We rely on the rule as stated in Barton v. Beatty, 28 N. J. Eq. 412, in which it was said: · The exercise of the power of putting a purchaser in possession of land sold under the decree of this court rests in the discretion of the court. it will never be exercised in a case of doubt, nor, under color of its exercise; will a question of legal title be tried or decided.' Schenck v. Conover, 13 N ..J. Eq. 227; Vanmete?' v. Borden, 25 N. J. Eq. 414. The court will not in this summary way settle contested legal rights. Thomas v. ])e Baum, 14 N. J. Eq. 41. A writ of assistance is awarded in execution of a final decree. Having decreed a sale and conveyance of land. it is necessary, in order to gi ve the purchaser the full benefit. of his purchase, to put him in possessioq.. This the court will do as a full enforcement of its jUdgment, and as incident to the relief given by its decree. But if, subsequent to the sale, the purchaser confers new rights ()ll the person in posstlssion, or his conduct leaves it doubtful whether he has not given the person in possession a l'ight to hold the land, such. fact takes away the power of CQurt to deliver possession. In such a ease ,the ques-
FARMERS' LOAN & TRUST CO.
'I).
CHICAGO & A. RY. CO.
661
tion would be, has the person in possession a right to hold the land by matter arising subsequent to the sale? and not, is a writ of assistance necessary to the complete enforcement of the decree? That question must be tried in another tribunal. In this case the person in possession puts in evidpnce certain facts tending to show the creation of a tenancy at will subsequent to the sale. The petitioner attempts to meet the case thus made by showing that no tenancy of any kind was created. Perhaps the evidence of each. standing alone, is sufficient to make out a p1'ima facie case. It is obvious at a glance that the question thus raised is one not proper to be tried in this court. The application must therefore be dismissed. To the same effect, see City of San Jose v. Fulton, 45 Cal. 816." It is evident that in the case referred to there was conflict in the evidence, and that on each side it was "sufficient to make out a primajacie case." There is no essential conflict of that kind here. The facts are as certain as if embodied in a special verdict or finding, and it remains only to deduce the proper legal conclusion,-a duty which would belong to the court even if the question were being tried in another tribunal with the aid of a. jury; and in respect to that conclusion it seems to me that there is little or no room for doubt what it ought to be. There is nothing in the evidenCe .adduced here that shows the ground upon which the Wabash circuit court granted its restraining order, nor that. that court passed upon the exact question presented here; and, if it did, it would nevertheless be the duty of this court to act upon the matter according to its own judgment, because the primary juribdiction is here, incident to the procedure of foreclosure and sale in the principal case, and upon the exercise of that jurisdiction the petitioner bas the right to insist, notwithstanding the action had in the state court, and notwithstanding its appearance in that court, to resist that action .. The powers and remedies of this court would be lame and inefficient indeed if they did not extend to situations like this, and if their exercise could be intercepted or cut off by applications to other courts. The Indiana statute (Revision 1881, §§ 5207, 5208) provides that "estates at will may be determined by one month's notice," but that "a tenancy at will cannot arise or be created without an express contract; and all general tenancies in which the premises are occupied by the consent, either express or constructive, of the landlord, shall be deemed tenancies from year to year," which are determinable by "three months' notice given to the tenant prior to the expiration of the year.» On the assumption that the oc.cupation and use of the road by the Wabash Company in the manner shown cOQstitutes a tenancy and estate in the sense of these statutes, it is now insisted that the Wabash Company holds as a general tenant of the Chicago & Erie Company. Whether the contract with Ashley and Talmage constituted, and whether any occupation and use of the road in accordance with the terms of, that contract could constitute, a tenancy, seems to me quite doubtful. The right conferred thereby upon the "lessee," so-called, was simply to run its trains in charge of its own employes over the road of the other party, (the road itself being in the charge of the employes of the owner,) which by the contract was bound to furnish,
nnd"did rmrnish,to theWabnsh:,Comp/lny the requisite fitel,' wate!', use of sidetracks, and other including'telegraph service, foi" themovingofits tritins.A or boarder occupying a. room for the. i't. may he exclusively, does. not beGome a tenant in any proper sense ofthe word; and right conferred by the contract with Ashleyan,j Talmage seems to meito be .rather in the nature of an easement; and the position of the Wabash Company since the Chicago& Erie COinpany took possession has been perhaps more like that of a licensee. But it is not necessary to define e:xactly the relation of the parties under that contract. It was treated in argument asa 'tenancy, and letjtge so regarded. Whatever it was, by force of the decree of foreclosllreand of the notice given by the, the master on the day of sale, the rights of) the: :l'espondent were terminated; Jlnd, aside irom consilierll,tions,of pub- ' anyslldden interruption of transportation and, travel j ' & Erie CompaIlY, ,t;lpon ,taking might have turne4 its switches, and reluseq tQ permit anot,ber locomotive or Car of CQmpllnyto cotn{l uponitstracksj but it was not bounq,in rightIJ, 'tomk,elJo peremptory a course. ,It was enough that im,mediate, ,notice, both ,by telegraph and letter, to the. bash:C,Qwpany ofitspllrp,osetoabide disclaimer which Coster nnd qeclar:edtandthat in the subsequent correspondence with, ,()fl.icersof the Wabas9Gompanythis position waMlonsistently maintaine4, timely notice given thattbe Wabash Q(j)mpany at a time stated, Ilhould cease .entirely the uSe) of the Chicago &; Atlantic road. , There was time oa:use for, n01'WI18. there in tact, on the part of the Wabash Company, the attitude orthe Chicago, & Erie Company; and if, under thecircumstances,n,ew rights have w:isen in the. nature of a general tenancy; it is because the law, from the mere fact oft1}econtinued;joiJ;ltuse oCthe road confor-mnhly to the terms of the under V\'bich that, \lsehad. begun, compels the inference of, an iJ;ltention con traryn,ot only to the, uI1derstanding ,of both parties, to the expI:essed illtention of the party against whose interests the inference is lIl3st'rted. N.o such legal inference is necessary, and to say that there can be in this ca.sefl.n inference of fact, . or of mixed law and fact, to the that a new tenancy or contract of any kind was intended to be created,)nstead of being a Jair or reasonable dedl!ction from itt wQuldbe a distortion of the evidence. , . . ' If there was not a strict compliance with the rule that there should be a, formal for compliUl1ce with th,e order or d 'cree of the court applying for a writ .of assistance, the resJlondent may be said, uPPll the facts shown, to bavewaived the objection. 11he prayer of the petitioJI;is theretore a reasonable time (to be: fixed on .motion) the WllbashCQmpllny shall voluntarily withdraw its locomotives'and cars,fj.ndceasetouse.the petitioner's road,. the writ of will issue, the respQndent will be enjoined, as prayed. 1 ,
":',
663 J'EBUPet
af.
fl.
WABASH,
ST.L. &; P. Ry. Co. 'tt aL
(Oircuit Oourt, N. D. OMo,W. D. December Term,1890.)
1.
RBOlIITBB8- BALBII ,.... AsSUKPTION oJ" LUBILITIBII, BY, PuRCHASBR DBMANDS.
Where a railroad which has been In the hands of a receiver a'Ppolnted by the cil'o cuit is sold,. and the, as part of the <X\nsideration, covenants to discharge all eXisting debts and liabilities of the receivership, it is the duty of luch court ,to protect· the purchaser against all demands which are not just and proper demands against the receiver, and to that end to require all such demands to be presented to it for allowance. : ' , Where,on the strength -of. covenant, a -person brings an action in the state Court against the to recover fill" a tort to his realty commiti.ed by the receiver,,\ d.emand bei.n g primar,ilYchargeable on the f, UIikl, in the hands of. the, arising from the of action, and require plaintiff to present his claim to it, for a,judgment thereon in the state court would en title him to satisfy It out of any propertlsubject to levy In the baJ;llD oUbe purchaser. . " ' The purchaser's appearance in the state court Is DO' waiver odtll right to have the '.' ',_
ALLOWANOlI '
(W
t.
BllrE-AO'J'tON IN STATE COtrRT-JUBlsDICTlON OJ' FEDBRAL CoURT.
a. ,
BJ.llE-W.UVER BY A,PPBJ.RiNCB.
Proce,edh:l.glll therein restraine.It, where th.,·S nature 01' the,Buit d,id, n. 0,1. B.t once, appe,ar, WU
buUt the jurisdictiOn of the (edQral revealed by the pleading&. ,_,
ulIjlpIl as iti naht ,to do 80 ,.", " p ··, ,
"I
InEquity. _ Osborn &: Smith, for petitioner. HiU &:l1ubbard, John W. Winn, and Harris &: ConIel"On, for defendants.
RICX8,-J. In ibis cause an application, was mBdeoll' bebalf of tbe Wabasb,Railroad Company on the 25th ofOctober, 1890, asking for an order to be made requiring ReubenT.Potterf to show ,cause wby he sboulc;l'not be restrained from an action l;l.t law againSt the petitioIlElr ,in the common pleas of Defiance county, Ohio. .In tbat application the petitioner alleged that it was a corporation organized under tbe Jaws of Ohio, and became the purchaser of tbe property of tbe Wabasb, St. Louis & Pacific Railway Company, foreclosed and sold in proceedings in the circuit courts of tbe United States for the several· districts in the states of Illinois, Indiana,and Ohio. The petitioner furtber represents that in September, 1890, tbe said Reuben T. Potterf instituted au action against the petitioner" tbe Wabash Railroad Company, in tbe cotgmon pleas court of Defiance county, Ohio, to recover damages fora tort committed by JobnMcNulty while be was receiver operating tbe railroad property foreclosed in tbe above proceedings under the order and direction of tbis court. It appears froIll the papers filed in connection witb tbis application tbat tbe said Reuben T. Potterf is tbe owner of certain real estate in tbe town of Defiance,Obio, adjacent to the property of the ,Wabasb Railroad Company. " In bis petition filed in the state court the plaintiff alleges that he improved the real estate in his petition by building thereon a suitable dwelling.bouse, ,barn, cistern, and outbouses,and constructed tbe same with reference to the Krade 'ofa certain highway running: ontbesoutb..westedy side of said premi:ses;and with to tbegmge the same bad beenmain-