The sun. [volume] (New York [N.Y.]) 1833-1916, 1877-07-25
SOME QUEER LITIGATION.
A CIRCUIT COURT AGAINST TIE SU-
PREME COURT
Judge Woods In the Case or LudciinR and the
vicksburg and shreveport Railroad 90 In
tercstirw Facts about ~ Judicial Sale.

New ORLEANS July 2o-In previous cor |
rcspondcnce from this city the readers OF THE !
Sun have been informed MS to the progress OF
the somewhat famous litigation Of the mortgage
bondholdcrs of the Vicksburg Shreveport and
Texas Railroad Company against the notorious
laieChief Justice OF the Supreme Court OF Lou
isiana. John +. Labelling, and other persons
associated with him in the fraudulent purchase
of that property nj n judicial sale made by the |
Sheriff OF Ouachitn parish on Feb B. 1866. They
may recoect that In 1872 Judge W. b. WOODS
the Circuit Judge Of the United States Tor the
District OF Louisiana on an Application to him
made by the mortgage bondhodcrs OF the COM
pany TO annul that sale and reinstate their
mortgage which Ludeling and his associates
insisted had been extnguished by the Sherins
adjudication OF the property to them. he upheld
the validity OF the sale. pretending to SEQ no
fraud nor oven improperly in IT, dismissed
the bondholders' suit and gave judgment for
the defendants. confirming their title. Tho
next step in the litigation was an appeal by the
States. which, at the October term of 1874 rc-
suited In "a very memorable Judgment reversing
that of the court below and granting tue rcnci
sought for by the appellants. The opinion OF
the Supreme Court was reported IN 2ist
Wallace; and as IT was remarkable Tor the
severity Of lie language in relation 10 the wrong
which had been done To- the bondhodcrs hy MIR.
Ludeling and his associates one would h ssSn
rs the defendants. whose inipuitous conduct "
had underworld to justify and reward, would va
appellate court. and thcnceforwnrd coniormed
its action in the case to The spitt as wei ns The
letter OF the judgment. But II hns not been 80.
rs appears from the subsequent proceedings
taken in the lower court toward the execution
OF the decree and orders OF the Supreme Court
After the judgment Ludcling and nssoci-
atcs presented to the court here claim for
their entire expenditures upon this railroad
property during their nine years fraudulent
occupation and use OF It. which amounted. nftcr
the sum Of 81 .O96 .03l 50. They contended that
his sum should be paid to them before the
property could be legally subjected To- sale in
satisfaction OF the mortgage of tho bondholders;
that they were by law entitled TO "a lien or right
payment Of their clam. and that its possession
should be- restored to them until they mad been
This claim has. OF course, been strenuously
resisted by tho bondholders. who contend that
BY an express provision of the law Of Louisiana
ments, by whomsoever made. upon the prop
mortgage and that il the defendants tadjudscd
70 have fraudulently possrssedl are entitled to
provements they must seek it from the owner
OF the property Vthc muItShkorl, ana not from
the bondholders. who are mortsagees. and
whose claim cannot be opposed, much less eN-
tinguished. by that of any other creditor OF the
mortgaXor. even had there been NO fraud IN the
case and If the expenditures had been those OF
n bona iide posscssor. The bOndholdeIs further
contcndcd that the very utmost the defendants
ments and additions they made upon the prop
erty and which xsted upon it when taken hos
value has been ascertained 10y experts commas
stoned by the court 70 be the sum % t3i2.3Gl 30
ahle rental of the property. which at i27 800 per
annum would amount with interest to the sum
kUpon these issues the case went TO trial in
March. 1876, and decision was rendered 10y
Judge Woods in June. 1877. This decision is
that posspssurs. even in bad faith or fraud, nre
by the law Of Louisiana entitled 10 be- REIN.
bursod their expenditures Tor improvements, II
the owner Of the property accepts those I'M
provemens. That If they are ~ a klti sus ,cp-
tible OF being removed or demolished, the owner
may require 70 have them removed but II they
are of kind impossible to he removed or de
molished then the owner must pay the cost
price Of them TO the party eyicied and cannot
r allowrd tfs 2p9hn oil o aehnT 60; or reieSns
ments made by Ludeling and associates are not
that they cost he sum Of Sass 1881, and that
amounts to s97 81 % = together, 1855, 7al 80.
From this latter SUM he deducts $685. '2,Ql
operating expenses OF the railroad. interest
added. and then strikes q balance Of 1891 .959,i2
for which heawnrds judgment IN favor 81 the
defendants. Ludrling and associates, lie or
ders the property 10 be sold. and out OF me pro;
the above-mrntionad sum OF 1891 .9j9.42. II thu
price Of $3.50 ys.3s which he terms the ul-rI
that upset price Shall be- Obtained then thcy
are to receive in the same proportion Of The sum
actually obtained as that sum bears to the = upset
price" The result il that bondholders holding a
mortgage for 81 700OOO the sum found 10 be due
Tor principal AMI matured interest on then
erty 10 pay in cash the sum Of 1891 $50 AZ, which
If il be a debt Of any body. II debt due by the
owner Of the property an not by its MORTGAGE
On the other hand. If Ludeling and associate!
their own hands the same sum out Of their hi,
and pay themselves the amount awarded then
by the Court The amount found 10 be due tn
road company are indebted to them III cash
and, by the law Of louisiana mortsagees buy
titled TIL to c setie thef BID Win the judgment the
hold as far as II vii 20, and without pay 7!
IN nY my 4 al
II the property brings more than the ludgmen
they hold they have to pay in cash the exces
Now what is the result Of the decree OF Juig
Woods so far as the bondholders are concerned
debted to parties with whom they had no con
nection whatever and parties, who had for min
years fraudulently INSTRUCTED them in the en-
forcement OF their mortgage. The bondhold
erS are required To- submit 70 a deduction .
tanned from the Supreme Court, and, II III
propcrty realizes only the sum Of 1888 Oys g
they suffer Il loss OF nearly one half OF what III
property is worth. and get about % cents on III
dollar Of their claim instead OF about 10 cents
which the property ought 20 realile.
The property under no circumstances. wi
bring enough 10 satisfy the bondhoders mort
The decision Of Judge Woods treats thes
fraudulent possessors MS If they had been III
duly-appolnted trustees or agents OF the raj
road company authorized to manage an
operate the prOperty--at all events 50 lar ms III
earnings, are concerncd-ior he only charge
them with what they Say was the excess 81 earn
ings over expenditures, instead of chargin
them with n rental. or what the use OF the prol
erty was really worth. The decision also treat
Them as if they had been possessors IN goo
faith. and therefore i runs counter to the find
Ing of the Supreme Court.
Both plaintiffs and defendants have apple
for and obtained a suspcnslNe appeal from thl
decision to the Supreme Court, aud have or WI
furnish supersedeas bonds. II Is TO be hope
that that court Will not again send back the cas-
T. Judge Woods. who appears resolved 10 della
justice in this cast, II MOTTO prevent taltogethe
Judge Woods being An applicant Tor the Va
cancy on the Supreme bench. II - in order
uutpleUtutS
for that exalted office. and his personal integrit
With regard to his anteocdents, have earne
from those who were acquainted with h
standing in Ohio. from which state he WI
appointed Judge Of this circuit, that he WI
an obscure attorney Of very ordinary talent
His service on the bench here, so far as | al
aware. does not enttle him To aspire 70 high,
position than he now occupies. Most Of III
appeals taken from his decs IONS have resute
In IA reversal Of them. | have myself counto
ypward Of thirty revorsals. and many MOI
have not been. reported. This ought 70 sett
the question Of his competency for the Supren
bench. AS 10 his integrity, while there is 4
direct evidence OF any deficiency In that respec
tat. al t.asllf 90