The Portland daily press., 1877-05-22
Iowa Central Railroad Foreclosure Suit

With commendabe zeal for the dspensa-
tion OF impartial justice the New York Ma
ton has exposed to the attention of its read
ers two opinions of Judge Dillon on the same
subject given in different cases and contra
dictory in terms.
1t may be interesting to the bondholders in
this state to follow Judge Dillon in the FORE
closure suit against the Central Railroad Co.
of Iowa, beginning with his decision in
October, 1874, that one bondholder indepen-
dent of the trustee, constituted proper
party to institute proceedings for foreclosure
of the mortgage, overruling the defendants
demurrer and sustaining the bill of Alexander
ct al. At the October term, 1875, the Court
remarked that the majority governed accord
ing to the conditions of the deed of trust
which was the charter of the bondholders,
and final decree was entered by consent.
Dec.16th ensuing an appeal was sought by cer-
tain of the bondholders and denied because
the decree had been entered by consent, the
Judge adding that if the decree were erron-
eously entered or improper, to apply to have
it corrected or another entered. Accordingly
those bondholders applied by petition and
their motion to set aside the decree was re-
fused, but an appeal was allowed with the
stipulation that, if execution were suspended
bond for 100000 should be given.
The Supreme Court vacated the super
sedeas granted on modified bond, and said
that if the bond of 81 ,0OO,0 900 had been given
it could not in law have any effect for the
purpose OF supersedeas.
hesupersedeas was quashed Dec. IS, 1876,
and, showing that it is a statutory remedy
and that their own negligence had deprived
the appellants of right to suspend execu-
tim, the Supreme Court explained that af-
ter limited time the right of arrest is gone
and the successful party is freed from this
means of staying enforcement.
Application was then made to have the de-
cree executed, and now, when decree has
been entered in favor of the trustee as a re-
suit of the Alexander bill, Judge Dillon de-
cdes first, that the case stands just as if there
had been no supersedeas and that whatever
the court could have ordered if there had
been no supersedeas it may now order. Fur
thermore, that individual bondholders not
parties to the record who are represented by
the trustee, have no legal right to demand
that the trustee shall order sale under the de-
cree and have the same executed If the trus-
tee is of the opinion that the interests of the
bondholders will be best subserved by not
having sale made pending an appeal.
At the term when the decree was entered
Judge Dillon said: "The mortgage is the
charter of the bondholders and the majority
govern" and entered decree for execution
forthwith. In refusing execution he said
that, if any of the bondholders objected to
execution, the trustee might properly post
pone it.
Here we have, first, decision that one
bondholder independent of the trustee NAV
in opposition to the wishes of the others prop
erly bring bill for foreclosure with decree
entered for sale forthwith, as the result :
second, an application for an appeal which is
denied, with directions if the decree is erron-
eously entered to apply to have it corrected;
third, application to have it corrected refused
and an appeal allowed to operate as a SUPER
sedeas provided a bond of $1,OOO,OOO were
given; fourth, the Judge decides that he is
now free to have the decree executed and
that the bondholders are wholly dependent
on the will of the trustee.
In granting an appeal Judge Dillon fixed
the bond at 81 100000 ii execution was to be
susnpnded and now wban tho S,,nro,,,o
Court has decided there is no supersedeas
and that the successful party is freed from
the means of staying enforcement, that his is
a right which has been acquired and of which
he.cannot be deprived without due process of
law. Judge Dillon decides the rights of
the majority by the will Of the trustee and
that he could not see clearly that any special
injury would result by reason of the delay,
notwithstanding he had previously fixed
bond at 81 100000 to cover injury incident to
delay if execution were suspended.