West Virginia daily oil review. [volume] (Sistersville, W. Va.) 1894-1902, 1898-11-04
IMPORTANT CASEssa
Decided by the Circuit Court
of Appeals
IN CITY OF RICHMOND
Its Bearing on Receivershin
Cases is Important.

Judge Simonton, In the United
States Circuit Court of Appeals at
Richmond has handed down very
important opinion in the case of 7.
c. Anderson VS.. The Baltimore
Building and Loan Association, in
which the U. S. court for the dis
trict of West Virginia is reversed
Anderson and others, composing
the Lock Lynn Heights Hotel Co.
owned less than half an acre of
Ground at Lock Lynn Heights, Md.
They started to build a hotel and
borrowed money from the Balti-
more Building and Loan Associa-
ton to complete it. Before Dor
rowing the money, however, the
company acquired fourteen and
one-half acres of land, making Is
In all. The corporation became in
solvent and sub-contractors filed
mechanics liens against the prop
erty. A receiver was then asked
tor and ]. B. Sommerville was ap-
pointed by Judge Jackson with au-
thority to borrow money, complete
and furnish the hotel and lease it,
to issue receivers certificates for
this expense and to keep UP the in
terest to the Baltimore Building
and Loan Association. Judge Nc
Cluer, representing this association
contended that the United States
court had no jurisdiction in the case,
but the court held that it had.
The receiver sold $1,000 of the
receivers certificates, payable out
of the first funds that came into his
hands to a Sistersville lady, and
furnished the building throughout,
buying the furniture in Wheeling
and issuing certificates for it. Re-
ceiver's sale of the property and dis
tribution of the proceeds were also
ordered. The building association
fearing that there would be nothing
left for it, petitioned to be made a
party to the suit, and upon this be-
ing granted appealed the case to the
United States Court of Appeals.
This court held that the u. S.
court for the district of w. Va. had
no jurisdiction in the case and had
no right to put its receiver in con.
troll Of realt : outside of its district.
In his opinion Judge Simonton
says:
eve have striven anxiously to
find some way In which this appeal
could be disposed of without un.
doing all which has been done with
so much expenditure OF time and al
such cost. But we have been I'm.
able to do SO. AS has been seen
all the orders and DEGREES procured
were entered in a cause in which
the court had no jurisdiction. x j
The inevitable result is that
they must be vacated. The cause
is remanded to the Circuit court
with instructions to vacate the or
der ratifying the sales made by the
receiver, and the order distributing
the purchase money, and that it di-
rect that the payments made by the
purchasers be returned to them.
That the degree for sale be set
aside and the bill dismissed. The
costs to be paid by the appellees."
The decision holds that the
building association has prior lien
on all the really except the frac-
ton of an acre originally owned
and that the mechanics liens are
the prior liens on that. The hold
ers Of the receivers certificates are
therefore without recourse and are
probably out of pocket for the
amount represented by their certlh-
Gates.
The opinion is also important in
that lin the case of private corpora
tons the court cannot authorize the
issue of receivers certificates for
the purpose of improving, adding
or carrying on the business of the
company, without first having the
consent of creditors whose liens
would be affected thereby.
Ero,, Naxu gealanh