The New York herald., 1877-10-07
UNITED STATES SUPREME COURT.

Observation-Disclosures OF THE LAKE SUPERIOR
SHIP CANAL - FORECLOSURE - PARTIES
PRIORITY OF LIEN.
wAsnIxcroN. Oct 8. 1877.
No. lso George Jerome aud Fernando c. Beaman.
Assignces, SC, VS.. Thomas N McCartcr, Trustee
Appeal from the Circuit Court OF tho United States
for the Eastern District of Michigan.-There arc no
less than twenty assignments OF In this
case but the subjects OF real controversy arc few
The bill Is ordinary one for tho foreclosure of
junior mortgage covering the canal franchises Of
tho Lake Superior Ship Canal Railroad and Iron Com
pnuy, and covering also separate bodios OF land
each containing 100000 acres Tho mortgage
given expressly subject to two prior mortgages,
dated July J. 1855, upon tho canal and one Of the
bodies OF land, and tho other dated July
!. isss, upon tho canal and tho other BODY
prior mortgages was made 10 secure tho payment
of the conipany's bouds OF even dato therewiih,
ountng to the sum Of $500000 and all the bondi
issued and they are now outstanding. The hrst
OF these prior mortgages s known tho Sutherland
mortgage. Default having been MADE In the puym
OF interest upon tho ooncs secured by that John L.
Sutherland the trustee, nled his bill to f0reclose ,
making all the subsequent mortgages partes and they
ali appeared In that Isaac H. Knox appointed
r1celver of all the property covered by the several
mortgages and subsequently, In order 10 obtain the
money necessary for completing tho canal by order
OF the Court authoaizcd create, soil
certificates of Indebtedness to tho amount Of $5OOO00
to be secured by n mortgage which was empowered
prior in right 10 all other mortgages Pursuant TO this
authority s for their secu9
SS.sd the mortgage directed By the Court.
Such was the condition of affairs whom tho prescnt
bill filed. But the company having afterward
gone into bankruptcy supplemental bill
defendant and they appeared and made deiencc, and
they are tne only parties appellant II is now con-
tanned because the prior mortgages were not made
parties THIS position cannot be Sustained. IL ts
doubedy true there are cases 10 be found In which
was ruled that prior membranes necessary
parties to bill Tor the foreclosure OF junior mort
gage but IN most OF these cases tho circumstances
peculiar. Where the effort OF tho junior mort
gagec to obtain a sale Of the entire property
. laIe, and not merely OF tho equity OF redemption,
there Is reason Tor making the prior ncumbrancera
pares for they have immediate interest the de-
And So whom there is substantial doubt respect
ing tho amount OF the debts due prior liep
creditors there Is obvious proproty IN making them
parties that the amount OF the charge remaining
on the land af.cr tho sale may be determined, and
that purchasers at tho sale may be advised OF what
they are purchasing But the bin IN hand has
such peculiaritics The prior mortgages not due
when this bill was nlcd, and without the consent Of
those mortgages nothing more than the equity OF
demption could bo sold under any decree made the
case, under the decree which was sought. Nor Ia
there any doubt entcrainable respecting the amount
due under The prior mortgages Indeed the company
Is cstopped by the provisions Of its mortgage, Of
winch Tho complainant is trustee from asserting thai
the entire the $500 mortgages and OF
the receivers mortgase was not wnen the
was acknowledged by making the junior mortgage
pressly subject it. and there Is evidence that
any portion Of II has been paid II Is not ad-
mlssible Tor tho mortgagors or their assigncss In
bankruptcy to dcny u now. (Bronson va Tho La
Crosse aud Milwaukee Railroad Company; ALL 2Sal
Apart from the exceptional cases understand the
general rule to DO that In suit by junior mortgage
10 iorcciose u mortgage, prior mortgages arc not
necessary partes SO IL has been held In England In
Rose vs. Page, 2 Sim., All; Richards va Cooper, s
Beavan, 304; Dclabcre vs.. Norwood, Swanston, Ia
The ruling OF the Court that there IN the
objection TO tho decree, because the gagors
declared bankrupt after the bill was hled sustained
and also other rulings on minor questions, and touch.
ing tho ascerta,nmcnt oi liens the property an
terror 10 the mortgage Affirmed Mr.. Justice Strong
delivered the opinion