The New York herald., 1877-02-27
THE COURTS.
The Trusteeship of the Mobile and
Ohio Railroad Company.
IMPORTANT DECISION BY JUDGE BRUCE
Cleaning out the Augean Stabe o'
Whiskey Crookedness.
A WID WIS CORT.

The recent decision OF Judge Bruce of tho United
States Circuit Court sitting in the Southern District
OF Alabama in relation to the Mobile and Ohio trustee
ship already briefly referred to IN the telegraphic
news OF tho HERALD to have excited in hnancal
circles degree of interest with its I'M
portance and the large amount oil property involved
thereby Tho property amounts to about e6 0oO,0 00o
and IT very large number OF security holders, both
IN this city and London, are Interested The facts on
which litigation based may be briefly stated as
follows Before tho war; when the mortgage was
made on the Mobile aud Ohio Railroad TO secure the
nrst mortgage bondholders Mr. Morris Ketclum, OF
this city, and John J. Palmer and W X. Hal'ett were
named as trustees therein for the bondholders.
Duripr the war his two co-trustees died, but Nr.
Kctchum still survives. After the death OF his
associates certain proceedings had in the Coned
crate courts in the State OF Alabama whereby Mr.
Ketchutn = place as a trustee purpored to be made
vacant, and william Butler Duncan and his partner
Elliott OF the late firm OF Duncan sherman d Co., OF
this city, found themselves put IN as trustees by
them suit commenced 10 ioreclose the mortgage,
and of them, Mr. Duncan, was appointed receiver
Mr. Ketchum followed with the present suit as
soon as default IN the payment OF tho com
pany,s coupons authorized him to do so, and this
suit involved the legality OF his removal MS trustee
by the Con iederate court The only notice pretended
was published in local paper in the State OF
ALABAMA ut a time when the two armies obstruc ed
oil commun cation between the two sections. This
notice he claims he never saw. and was not
bound the action of tho court nded thereon The
Confederate trustees interposed demurrer and plea
in bar to Mr.. Ketchum's complaint claiming that he
had due notice. and even If he had not, his delay in
taking action after he had been advised OF the pro-
cecdngsat the close OF tho war. amounted TO an ac-
quicscence in what had been done. On these ques-
tions that Judge Bruce has rendered his opinion
favorable Mr.. Ketcbunis claim as trustee the most
important points IN which are gwen below The
Court holds that before the Alabama tribunal could
acquire right TO proceed TO determination OF a
matter involving the rights and property of party 1t
must first obtain jurisdiction OF the person THIS Is
fundamental law and equally applicable, whether a
proceeding be that which Is termed in perseDan or
In rem AS the argument OF the railroad defend
ant that the Confederate court had acquired juris
dtction by constructive service under ITS statutes
of publication this 1t deems unenable
as the object all OF that give
parties notice. at least an attempt TO give them notcc,
SO that they may appear IN behaf OF their interests
With the OF war, and the interposon OF the
respective OF the government de faco and the
government de jure separating Mr. Ketchum from the
out OF which the notice bad issued II could not
be ythng else than futile and utterly incapable OF
accomplishing tho purpose for which ~ was intended.
While admitting the competency OF the Legislatures of
the State governments facto to establish police reg
ulations the preservation and maintenance OF order
the right OF ito courts to entertain and decide dis
putes between resident citizens II holds that when
these rebeous States AMI the Judicial tribunals which
ackur"cd their authority TOOK any action directly
hostis ia rs nature the lawful government OF the
lan make any disposition OF the rights or property
absent citizens OF the United States then went
beyond any jurisdiction conceded to 1t, and
It's action vodable, but utterly
null and void Mr. Ketchum was u loyal citizen Of
the United States, and such did and could
pay any attention to the order of publication OF the
Confederate court even ii IL had been brought 10 his
notice The decree divestng him his title OF trus-
tee recites that 1t entered pro conesso. and the
necessary implication OF recital OF this nature Is that
the Court proceeds TO determination on the suppos
rf Tho tnn nf I'm ri La hAn
the prerequisite to Iurisi siciion is notice, and under
the circumstances, us II absolutely impossible to
give Mr. ketchum any effective notice. the Court
acquired any jurisdiction. The Court goes on TO say
likewise claimed that this decree has been rati
led and VALIDATED by the action OF the State
OF the State OF Alabama, held after the war; to
the State TO its proper relations TO the Union,
and that this deed oil trust was made with reference TO
laws OF Alabama and Is TO be governed by those
laws alone II i am right III my conclusion
this decree void as 10 the rights OF
KetchuIn, trustee in this trust 1t follows that II
could acquire validity IRON such acts as II In
capable Of legal liie but this scheme oil raising money
on bonds By deed OF trust property Of the
railroad company located I'm party in Alabama, with
its principal place OF business IN the city of Mobile,
looked ior It's execution and plishment bcy ond
the limits OF the State of Alabama IL expected
TO raise $6,000,000 In this State ana the form OF
bonds and coupons as negotiable securities payable to
bearer for many pounds sterling at the banking
house Of George Peabody Company, London, shows
the purpose to have been reach money centres OF
tho world. When the bonds were sold the purchasers
acquired interest this security, and the transac
tons became "a contract between the parties. The
directly or through Mr. Ke,chum, to any
judicial proceeding for, or given consent TO,
the removal OF, Keichum as trustee. To remove
the trustee and substitute another in his place
In any other way than by Jurisdictonal decree,
was to change and impair the obligation OF the con-
This the State OF Alabama, neither by its
s,,tutonai conventions nor by its Legislatures, had
any power to Hence 1t coud not ratiiy and make
valid that which beyond its power to do in the first
instance. If / correct my conclusion
that this decree void az 10 him. then he under
no obligation to pay any regard to It. The effect OF
pltrati hie rt aft ter Onpnt tl.
cree take appeal-time for which was amply ex-
tended BY the Iaw-making power OF the State--i is
not important TO discuss; Tor the fact Is, he did not
make any such application. The doctrine OF estoppc
Is also evoked TO the complainant He admits That
he acquired knowledge OF the proceedings ana decree
in the State Chnncery, Mobile in the year 1866,
uiier the close oi the Ii Is claimed that from
that time to the time OF filing this bill s76) he has taken
steps his right trustee aud has thereby
ncquesced in what has been done, and IL
cstoppcd IRON asserting any right as trustee in tho
deed OF trust Ii Is 10 be observed that by the terms
of trust after specifying the duties Of the
to the lands covered by the deed
to say:-"As to other items assets OF real
or income of said company. they to remain the
under the control OF the said company,
cxcept The sa,d compauy become IN default Tor the
payment OF said bonds Interest any portion
thereof. In such case the said party OF the second
part is hereby vested with full authority take pos
session control oil all and singular the entre estate
&C., &c And again said party oil the second part
shall not claim to take possession and control, unless
snid company remains IN default OF payment OF snid
bords or interest for the space OF three months after
being due ana payable. - ihs default payment
OF interest occurred In May 1875, that up tnat
time by the OF the dced, the railroad company
was entitled TO possession aud control OF the prop
erty. except the lands; and as 10 them. until
the de.ault, no sales could be made ''without the
ADVICE and of the company" ,
This suit was brought In May, 1876, so thai as To
the property other the lands Kctchum's duties
arose. iact only few months prior TO the bringing
OF this suit THIS IS not plea OF the
statute Of lniiaiious IL IL acluosccnce since the
year 1565. Aoquiesccncc implies something to be
acqucsced In, and the plea ~ that "he acquesccd IN
the decree,' moaning the decree Df the state Chan
Gerry Court at Mobile. y The plea ,ays tha,
.uy said Decree meaning the decree The Chancrry
Court at Mobile, "a successor TO ketchum ap-
pointed and who IRON ihat time did bold and
The duties D. said oicc Successor IN lieu Ot aud
stead Of said ActchuiD, uni the time when the CO.
and Andrew Foster kniott, were appointed SUCH
trustce" Mauiiestly, then The occree the basis
and source OF the alleged rights OF the present trustees
not anv acts admissions OF kochun, tor be was then
iLyu. in the State New York, aud without the op.