Clarke v. Mathewson, 12 Pet., 164; Judiciary | ority now in the order of time of their execuAct of 1789, sec. 11, 1 Stat., 78. The La Crosse & Milwaukee Railroad Company was chartered in 1852, to build a road from Milwaukee to La Crosse. tion, except as they may have been affected by the statute requiring the filing of personal mortgages in case the rolling stock is to be considered personal property. Hence, if we were now before this court to have our right declared under the mortgage, and there had been no foreclosure, our mortgage would be decreed a lien upon all said rolling stock, which was on the road when the receiver took possession. Subsequently, in 1856, by ch. 517, private Fourth. That the La Crosse and Milwaukee laws of 1856, p. 1133, the La Crosse and Mil- Railroad Company, after giving these mortwaukee Railroad Company was authorized to gages, could not be heard to dispute the right consolidate with the Milwaukee and Watertown of any one of the mortgages to all of this rollRailroad Company. The two Companies after- ing stock; and as the mortgage to Barnes is, wards, in 1856, consolidated and became the by its terms, expressly made subject to all the La Crosse and Milwaukee Railroad Company. other mortgages, except the one to ChamberAt the same special session of 1856, the Legis-lain, the Minnesota Company stands in no bet lature of Wisconsin conferred upon said La ter position than would the La Crosse ComCrosse and Milwaukee Railroad Company the pany and is therefore estopped to dispute our land grant given by Congress to the State of title. Wisconsin, and authorized said Company to build a road from Madison by way of Portage City to St. Croix River or Lake, and thence to Superior and Bayfield, on Lake Superior. The Watertown road above mentioned is the present route of the Milwaukee and St. Paul Railway Company from Milwaukee to Portage City. After the passage of all these Acts, to wit: on the 31st day of December, 1856, said La Crosse and Milwaukee Railroad Company gave the said land grant mortgage to Bronson, Soutter and Knapp. Therefore the Milwaukee and St. Paul Railway Company was fully authorized to connect said Western Division with said Milwaukee and Watertown, afterwards called the Milwaukee and Western Railroad Company's route, the present line of the Milwaukee and St. Paul Railway Company. All the rolling stock which was on the La Crosse and Milwaukee Railroad, on the 11th day of June, 1860, when the receiver took possession, was covered by and included in the land grant mortgage to Bronson, Soutter and Knapp; and by the sale under that mortgage, it passed to and is now owned by the Milwaukee and St. Paul Railway Company, subject to the lien or mortgage given by the La Crosse Company, prior in date to the 31st day of December, 1856, the date of the land grant mortgage. All of these mortgages, in express terms, covered the rolling stock of the road. There can be no doubt that these descriptions were copied, the one from the other, and that in making these several mortgages the same identical rolling stock was intended to be conveyed, to wit: the rolling stock of the La Crosse Company used on its road. We, therefore, insist: First. That each one of these several mortgages, covered and included all the rolling stock belonging to the La Crosse and Milwaukee Company, and which had been procured for or used on said railroad, from Milwaukee to La Crosse. Second. That this is equally so, whether we regard said rolling stock as personal property or a fixture or accession or incident to the road, nd that if it is to be considered as a fixture or accession or incident, it is only so as respects these mortgages as against other creditors, and that there is no pretense that it is a fixture to any particular portion or mile or miles of the road. Third. That these several mortgages became a lien upon said rolling stock from the date of their execution, and that said liens have pri But it is claimed by the counsel that the district court determined, in the land grant foreclosure suit, that all the rolling stock, except forty box cars, belonged to the East Division, and that we are bound by that determination, notwithstanding our mortgage did cover the whole rolling stock. We deny that any such decision was ever made in the district court. There was no such contest in the district court. There was no party in that court who did claim, or who was bold enough to claim, what the counsel here asserts, to wit: that the right of the La Crosse and Milwaukee Railroad Company to any part of the rolling stock on that road was superior to the right of any one of the several mortgages thereof. But the only question in this regard that was before that court, was one of priority of these mortgages as to said rolling stock. We, therefore, insist that the question settled by the district judge was one of priority of lien, and not the extent of the lien of the land grant mortgage. We, therefore, insist that the land grant mortgage covered all this rolling stock, that the proceedings in the foreclosure suit so adjudicated; but that, as to all except that specially described in the decree, our lien was subject to the lien of mortgages, prior in date to the land grant mortgage; that it was sold by the Marshal and the sale confirmed as made; that in pursuance of said decree, foreclosure and sale, it was by order of the court delivered to the Milwaukee and St. Paul Railway Company, and that said Company is now the owner thereof, subject to prior mortgages as above stated. The Palmer and city mortgages were made in 1854. At that time there was no Statute of Wisconsin defining the character of rolling stock; and whether it was a fixture or personal property, depended upon the rules of the common law. On the 10th day of October, 1856, the Legislature passed an Act concerning railroads. The 2d section provided that— "All rolling stock of any railroad company used and employed in connection with its railroad, shall be, and the same is hereby declared to be fixtures, and all such property, and all additional right of way, depot grounds and other real property acquired subsequently to The law of Wisconsin requires mortgages of personal property to be filed in the town clerk's office, and not in the office of register of deeds, where real estate mortgages are recorded. Rev. Stat. of 1849, p. 389, sec. 9. Same provision in Rev. Stat. of 1858, p. 614, sec. 9; And in case personal mortgages were not so filed, they were void as to all persons, except to parties thereto. Rev. Stat. of 1849, p. 389, sec. 9; Rev. Stat. of 1858, p. 614, sec. 9. The Palmer and city mortgages were never filed as mortgages of personal property, as required by the statute, and the land grant mortgage was the first mortgage ever executed by the La Crosse Company after the passage of the Act of Oct. 10, 1856. The decree was executed by a sale of the mortgaged premises by the Marshal. His advertisement of sale described the premises to be sold in the precise words of the description in the mortgage. The sale was had in pursuance of the advertisement. This sale was confirmed on the 5th day of May, 1863. The main facts on which the jurisdiction must depend as set forth in the bill, may be stated thus: The present defendants, James T. Soutter and Shepherd Knapp, together with Greene C. Bronson who is since dead, were trustees and grantees in a mortgage made by the La Crosse and Milwaukee Railroad Company on that part of the road between Portage City and the Mississippi River, and of the rolling stock and other appurtenances properly belonging to that division of said road. The same Company shortly afterwards made to William Barnes a mortgage on all their road from La Crosse to Milwaukee, and on all the rolling stock belonging to the Company, including both the Eastern and Western Divisions of the road. This latter mortgage was closed by a statutory proceeding, and the Milwaukee and Minnesota Railroad Company became the purchaser and owner of the equity of redemption of all the road, rolling stock and franchises of the La Crosse and Milwaukee Company. Shortly after this, Bronson, Soutter and Knapp, trustees in the mortgage of the Western Division, filed their bill in chancery in the District Court of the United States for the District of Wisconsin, to foreclose their mortgage, and had a decree under which the Western Division was sold, and also all the rolling stock of the Company belonging to both divisions of the road, to the Milwaukee and St. Paul Railway Company. The Milwaukee and Minnesota Company was It will be seen that the Marshal advertised made defendant in that suit, but did not answer. for sale and sold the precise property described The district court confirmed the sale of the in the mortgage, and no other or different, and Marshal and delivered to the Milwaukee and St. that he sold so much of the rolling stock as Paul Company all said stock, and that Comthe court had determined, the land grant mort-pany now has possession of it under order of the gage was a first lien upon, free and clear of all district court." It is alleged in the bill in the incumbrance, and the residue of it subject to present suit, that the mortgage to Bronson, mortgages prior in date to the 31st day of De Soutter and Knapp, did not cover a large part cember, 1856. of this rolling stock-over half a million dollars in value; that the decree of the court did not order it to be sold, and that the district court only placed it in possession of the Milwaukee and St. Paul Railway Company, as it did the Eastern Division of the road, for the purpose of enabling that Company to run the road from Milwaukee to La Crosse as one road; that notwithstanding this, the Milwaukee and St. Paul Company claimed to own all the rolling stock of the road, and are carrying it to other and rival roads which they own, and using it to the prejudice of complainant and to the destruction of the interests of the Eastern Division of the road. This sale having been confirmed as made, the purchasers, Pratt and White, received a deed from the Marshal, which described the property conveyed precisely as it is described in the report of sale. Said purchasers thereupon formed the Milwaukee and St. Paul Railway Company, under and in pursuance of the provision of the Revised Statutes of Wisconsin, and conveyed to it the premises, so as aforesaid purchased by them. Mr. Justice Miller delivered the opinion of of the court: In the circuit court a demurrer was sustained to the bill, and the bill dismissed, from which decree the present appeal was taken. The first question raised by the demurrer relates to the jurisdiction of the Federal Courts over the case. The complainant in the present bill is a Corporation, organized under the laws of Wisconsin and located in that State. The Milwaukee and St. Paul Railway Company, one of the defendants, is in like manner a Corporation of that State, and Pratt and White, two other defendants, are also citizens of Wisconsin. It being obvious that the suit cannot be maintained on the ground of citizenship of the parties, the appellant relies upon the subject-matter of its bill, to bring the case within the jurisdiction of the court. *For the purpose of this question, we [*632 are to take all the facts thus set up to be true, and consider whether they make a case for the jurisdiction of the Circuit Court of the District of Wisconsin, which has been successor of the District Court in that District. The present suit grows immediately out of, and is a necessity which arises from, the foreclosure suit, and is really a continuation of it. The rights of the parties depend upon the construction which is placed upon the acts of the court in that suit; and the present bill is necessary in order to have a declaration of what was intended by the orders and decrees made in that suit, and to enforce the rights which are established by it. The road and rolling stock, which are the subject-matter of this controversy, were placed in the hands of a receiver in the progress of that suit; and he was in possession of the rolling stock when, by an order of the district court, made June 12, 1863, in that suit, and a similar order of the same date, in another suit, it was all delivered to the Milwaukee and St. Paul Railway Company. At the last term of this court [Bronson v. La Crosse Railroad Company, 1 Wall., 405, ante, 616; Freeman v. Howe, 460, 16 L. ed. 752], we decided that, by the Act creating the Circuit Court for the District of Wisconsin, the district court lost its power to make such orders, and that they were void. The consequence of this ruling is, that in contemplation of law, this property is still in the hands of the receiver of the court. If in the hands of the receiver of the circuit court, nothing can be plainer than that any litigation for its possession must take place in that court, without regard to the citizenship of the parties. If it has been taken illegally from the custody of the receiver, it is 633*] *equally clear that the court has not lost thereby the jurisdiction over the property, or the right to determine where it shall go, so far as that right is involved in that suit. This is the very object of this bill, and it is rendered all the more necessary by that which the court has done, as well as that which it has failed to do. In the case of Randall v. Howard, 2 Black, 585 [ante, 269], these principles are fully stated as applicable to a proceeding in a state court, and are given as reasons why the Federal Court would not interfere; although the parties had the right, so far as citizenship could give it, to litigate in the courts of the United States. It is objected that the present bill is called a supplemental bill, and is brought by a defendant in the original suit, which is said to be a violation of the rules of equity pleading; and that the subject-matter, and the new parties made by the bill, are not such as can properly be brought before the court by that class of bills. We think that all the exhaustive research brought to bear on this technical question of equity pleading, while creditable to the counsel on both sides, is useless in the present case. It is not a question whether the proceeding is supplemental and ancillary or is independent and original, in the sense of the rules of equity pleading; but whether it is supplemental and ancillary or is to be considered entirely new and original, in the sense which this court has sanctioned with reference to the line which divides the jurisdiction of the Federal Courts from that of the state courts. No one, for instance, would hesitate to say that, according to the English chancery practice, a bill to enjoin a judgment at law, is an original bill in the chancery sense of the word. Yet this court has decided many times, that when a bill is filed in the circuit court, to enjoin a judgment of that court, it is not to be considered as an original bill, but as a continuation of the proceeding at law; so much so, that the court will proceed in the injunction suit without actual service of subpoena on the defendant, and though he be a citizen of another State, if he were a party to the judgment at law. The case before us is analogous. An unjust advantage has been 634*] obtained by one party over another by a perversion and abuse of the orders of the court, and the party injured comes now to the same court to have this abuse corrected, and to carry into effect the real intention and decree of the court, and that while the property which is the subject of contest is still within the control of the court and subject to its order. It is objected that Pratt and White and the Milwaukee and St. Paul Railway Company were not parties to that suit and cannot therefore be compelled to yield their right to litigate with a citizen of Wisconsin in the courts of that State. Pratt and White are mere nominal parties, who were the agents and attorneys of the corporators composing the Milwaukee and St. Paul Railway Company, and purchased the property at the Marshal's sale for them. They and the company may both be considered as purchasers at that sale; and it is in their character of purchasers, and on account of the possession which they obtained on petition of the Company, and the rights they claim under that purchase, that they are now brought before the court. If the court has jurisdiction of the matters growing out of that sale and order of possession, as we have already shown that it has, then it has jurisdiction to that extent of these parties without regard to their citizenship. It would, indeed, be very strange if these parties can come into court by a petition, and get possession of that which was the subject of litigation, and then when the wrong they have done by that proceeding is to be corrected, they shall be permitted to escape by denying that they were parties to the suit. In the case of Blossom v. The Milwaukee & Chicago R. R. Co., 1 Wall., 655 [ante, 673], this matter was fully discussed, and it was there held, that a purchaser or bidder at a master's sale, subjected himself quoad hoc to the jurisdiction of the court, and became so far a party to the suit by the mere act of making a bid, that he could appeal from any subsequent order of the court affecting his interest. De la Plaine v. Lawrence, 10 Paige, 602; Calv. Part., pages 51, 58, and note to page 61. *The objection to the jurisdiction [*635 must therefore be overruled. We next proceed to inquire whether the bill makes a case calling for relief. This involves the consideration of the mortgage of complainants in the original suit, and of several orders and decrees of the district court, all of which are the subject of conflicting constructions by the parties and their counsel. A preliminary statement of a few facts may assist us in the solution of these difficulties. The La Crosse and Milwaukee Railroad Company was chartered originally to build a road from Milwaukee to La Crosse, and commenced the work at Milwaukee, proceeding westward. The Legislature of Wisconsin added the right to build other roads connecting with this, and also gave them the right to mortgage any particular division of their road separately, for the purpose of raising money. Upon this latter provision of the statute the Company appears to have divided the main road into two divisions, nearly equal in length, the Eastern Division extending from Milwaukee to Portage City, ninety-five miles, and the Western Division from Portage to La Crosse, one hundred and five miles. On the 30th of June, 1854, the Company made and delivered to Francis A. Palmer, as trustee, a mortgage on the Eastern We have already seen that after all these, the Company made the Barnes mortgage, which was first foreclosed, under which complainant in this bill became, by purchase, owner of the equity of redemption of all the road, its franchises, rolling stock and realty. Division, commonly called the first mortgage, or parcels of land which now are, or may herefor $900,000; on the 31st of December, 1856, it after be, or constitute the site of the roadway, made a mortgage to Bronson, Soutter and turnouts, engine houses, workshops, depots and Knapp, trustees, which is the foundation of the other buildings, and all the other lands and real original suit in this case, for several million dol-estate which now constitute or may hereafter lars, covering the Western Division, commonly constitute, or be a part of the roads of said called the land grant mortgage; on the 17th Railroad Company from Madison, &c., and from August, 1857, it made to Greene C. Bronson and Portage City to La Crosse; and also all and James T. Soutter, trustees, a second mortgage singular the superstructure of said roads, on the Eastern Division for $1,000,000. whether now made, or to be made hereafter, and all the engine houses, workshops, depots and other buildings, and all the other improvements on or pertaining to said roads, whether now built and made, or to be built and made hereafter; and also all and singular the locomotive engines and other rolling stock, and all other equipment of every kind and description which have already been, or may hereafter be procured for or used on said roads, or either of them; and all the materials, tools, implements, utensils and other personal property which have been, or may hereafter be procured for or used in connection with said roads, or either of them; and also all and singular the rights, liberties, privileges and franchises of said Railroad Company, of every kind and description, relating to said roads." In reference to the road-bed which is covered by these various mortgages, there is no diversity of opinion; but in reference to the rolling stock, it is contended by appellees that these several mortgages were successive liens on all the rolling stock of the Company, and by appellant that they are liens only on the rolling stock belonging to, or in some way identified with, that part of the road included in each mortgage respectively. At first blush it would seem that in a road used continuously as one road, there could be no such definite relation between any particular division of the road and any particular portion of the stock. But as it was competent for the Company which owned all the road and all the stock to assign certain stock to one division, and certain other stock to the other division, when the roads were divided for the purpose of making mortgages, we cannot assume as a fact that there was no such allotment of the rolling stock; but must look to the language of the mortgages themselves, to see if any such intention is expressed. If it is not, then obviously the other view prevails, and the mortgages are successive liens on the whole stock. The descriptive part of the Palmer mortgage is in the following words: "All their said road, from its eastern termination, in the City of Milwaukee, to Portage City, being ninety-five miles in distance, constructed and to be constructed, together with all and singular the railways, land procured or occupied, or so to be, for right of way within the limits aforesaid, together with bridges, fences, privileges, rights and real estate owned by said Company for the purposes of said road, or which may hereafter be acquired or owned by them within the limits aforesaid; and all the tolls, income, issues and profits to be had from the same, and all lands used for and occupied within the limits aforesaid by depots and stations, with all buildings standing thereon, or which shall be procured therefor, together with all locomotives, engines and tenders, passenger cars and freight cars, shop tools and machinery, now owned or hereafter to be acquired by said Company, and in any way belonging or appertaining to said railroad, now constructed or to be constructed, within the limits aforesaid, including all its property, real and personal, pertaining to said railroad, within said limits, and all its rights, credits and franchises thereunto appertaining." The corresponding part of the mortgage on the Western Division is as follows: "All and singular the several tracts, pieces, The language thus quoted has been the subject of much minute criticism on both sides, and when considered in reference to the rolling stock alone, may not be free from doubt as to its construction. But when we consider it in reference to the clear purpose of the parties to make the mortgages distinct and different as to everything else conveyed by them, we conclude that it was intended that the rolling stock [*636 covered by each mortgage was that which was properly appurtenant to each particular division of the road. It is not so important that we be right in this, however, as we are satisfied that the district court in the foreclosure suit decided this question; and as that decision is in full force and unreversed, it must conclude the parties to the present suit, all of whom claim under the decree of the court. The complainants in the original foreclosure suit made defendants of all the judgment creditors of the Company who had liens subsequent to themselves, and made the Milwaukee and Minnesota Company defendant, who held under the subsequent mortgage to Barnes, with a view to cut off their equity of redemption; but they did not make defendants of Bronson and Soutter, who held a subsequent mortgage on the Eastern Division, and a subsequent lien on the rolling stock, which complainants would also desire to extinguish, if they had believed it covered the same rolling stock which theirs did. By omitting these mortgages they show their own construction that their mortgage and that of Bronson and Soutter, did not cover the same stock; which could only be because it was appurtenant to the Eastern Division. About the time that foreclosure suit was commenced, a suit was instituted in the same court to foreclose the second or Bronson and Soutter mortgage on the Eastern Division; but the holders of the Palmer mortgage were not made defendants to either suit. The two suits progressed puri passu to a final decree; but while the Western Division went to sale, an appeal stayed proceedings in the Eastern Division case, and no sale has yet been made under that de- | cree. Very shortly after these suits were commenced, the court made an order of reference in each of them to masters in chancery, who were the same masters in both cases. These references were for the purpose of ascertaining the amounts due on the bonds, the amounts due certain judgment creditors, and the amount of rolling stock on the whole road, and the amount included in each mortgage. The language of 637*] *the order of reference on this latter point in the original suit in this case is as follows: "And it is further ordered that said masters ascertain and report the whole amount of rolling stock on the road, and that they specify the quantity thereof that is covered by this mortgage, also in the first and second mortgages respectively." The reference in the other case is in language almost identical with this. Now it is claimed that the object of this order was to ascertain and settle the priorities between these different mortgages. No such inference can be made from its language, for it says nothing about priorities in date, or superiority of lien. There was no occasion or reason for ascertaining those priorities in that suit, for the respective parties were not before the court, and could not be bound by its decree. It would not even bind complainants, because there would be no mutuality in the estoppel. It is an impeachment of the legal attainments of the court and of the counsel to suppose that they would make a reference to a master to ascertain a fact which could have no influence on the suit, and if passed upon by the court, could affect nobody's interest in the slightest degree. But the language of the order clearly implies a different thing. The object is to ascertain, what is covered by one mortgage to the exclusion of the other; an object which had manifest pertinency to the duty which the court was called upon to discharge. The judge who made these orders delivered an opinion at the trial, in which he decides that the rolling stock of a railroad is a fixture; and if we suppose him to have considered that which was mortgaged to Palmer and to Bronson and Soutter as a fixture on the Eastern Division, and that which was mortgaged to Bronson, Soutter and Knapp, as a fixture on the Western Division, we have a clear idea of what he wished to ascertain, in view of the decrees he was to make in the two suits. We have next the report of the masters on this subject, which is in the following words: 638*] "We have also ascertained the whole amount of rolling stock on the whole road at the cost price. The amount thereof was, at the date of the filing of the bill of complaint in this cause, $569,635.78, and an additional amount of $53,600 has been purchased since the filing of the bill of complaint, making the whole amount $623,235.78. "And we have ascertained, and do further report, that of the said rolling stock, forty box cars, amounting, at the cost price thereof, to $31,979.64, and numbered 330, 332, 334, 336, 338, 340, 342, 344, 346, 348, 350, 352, 354, 356, 358, 360, 362, 364, 366, 368, 370, 372, 374, 376, 378, 380, 382, 384, 386, 388, 390, 392, 394, 396, 398, 400, 402, 406, 408, are covered by and included in the mortgage executed to the com plainants as set forth in the bill of complaint in this cause, the said cars having been purchased, and by the proceeds of a portion of the bonds to which this mortgage is collateral; and all the remainder of the said rolling stock is covered by and included in the first mortgage upon the said railroad, and in the mortgage upon the said railroad executed to Greene C. Bronson and James T. Soutter, and bearing date on the 17th day of August, A. D. 1857." In the foreclosure suit of the Eastern Division, these same masters reported on the same day: "We have ascertained and do further report, that of said rolling stock, forty box cars, amounting, at cost price thereof, to $31,979.64, and numbered 330, and so on, are covered by and included in the mortgage of Greene C. Bronson, James T. Soutter and Shepherd Knapp, and no other;" and then adds, that the remaining rolling stock is covered by the mortgage to Palmer, and to Bronson and Soutter; that is, the mortgage on the Eastern Division. It is impossible in examining these reports to doubt that the commissioners understood that they were directed to ascertain what rolling stock was covered by each mortgage, in order that only such might be sold under the decree in that case, and that they reported that of all the rolling stock on the road, forty box cars alone were subject to the mortgage in the present case, and that all the other stock was subject to the mortgage in the other suit. At all events, they were directed to ascer- [*639 tain what was subject to the mortgage in this suit, and they reported the forty box cars, and did not report any more. This much is beyond dispute from the language of the report in this case. Counsel for complainant excepted to this report. His fourth exception is, that instead of certifying as they did, the masters should have reported, "That all the rolling stock on said road was covered by and included in the mortgage given to said complainants, and described in their bill of complaint in this cause, and that said mortgage was a first and prior lien on said rolling stock superior to all other liens." This exception was overruled by the court, and the report of the masters confirmed so far as this branch of the subject is concerned. We regard this as a judicial decision, that complainant's mortgage did not cover the rolling stock which was covered by the previous mortgage to Palmer, and that it only covered the forty box cars, and such proportion of the rolling stock purchased by the receiver as the net earnings of the Western Division bears to the net earnings of the Eastern Division. This order modifying and confirming the report of the masters settled the rights of the parties, and by that decision they must stand until it is reversed on appeal, or set aside by some direct proceeding for that purpose. The final decree ordering the sale proceeds. upon the same view of the rights of the parties. After ordering a sale of the property mortgaged, and copying the language given in the mortgage as descriptive of what was mortgaged, the decree adds: "With forty box cars," numbering them, and "such portion or share of the rolling stock pur |