Source: https://supreme.justia.com/cases/federal/us/143/42/
Timestamp: 2019-04-18 10:42:57+00:00

Document:
When several plaintiffs claim under the same title, and the determination of the cause necessarily involves the validity of that title, and the whole amount involved exceeds $5,000, this Court has jurisdiction as to all such plaintiffs, though the individual claims of none of them exceed $5,000; but where the matters in dispute are separate and distinct, and are joined in one suit for convenience or economy, the rule is the reverse as to claims not exceeding $5,000.
A mortgage by a railroad company of its railroad, rights of way, roadbed, and all its real estate then owned or which might be thereafter acquired appurtenant to or necessary for the operation of the railroad, and all other property wherever situated in the state then owned or which might thereafter be acquired by the company and which should be appurtenant to or necessary or used for the operation of its road, and also the tenements, hereditaments, and appurtenances thereunto belonging, does not cover a grant of lands within the state subsequently made by Congress to the company in aid of the construction o¥ its road.
An appurtenance is that which belongs to or is connected with something else to which it is subordinate or less worthy, and with which it passes as an incident, and in strict legal sense, land can never be appurtenant to land.
A grant to a railroad company of public lands within defined limits not sold, reserved, or otherwise disposed of when the route of the road becomes definitely fixed conveys no title to any particular land until the location, and until the specific parcels have been selected by the grantee and approved by the Secretary of the Interior.
If a holder of one or more of a series of bonds issued by a railroad company and secured by a mortgage in terms like this mortgage has a right to institute proceedings for the foreclosure of the mortgage -- about which no opinion is expressed -- he is bound to act for all standing in a similar position, and not only to permit other bondholders to intervene, but to see that their rights are protected in the final decree.
"also all other property, real and personal, of every kind and description whatsoever and wherever situated in the State of Louisiana, which is now owned, or which shall hereafter be acquired, by the said company, and which shall be appurtenant to or necessary or used for the operation of said main line of railroad or any of said branches,"
etc. The mortgage, which was made to the Union Trust Company of New York, provided that the holders of bonds and coupons should have the right to institute legal proceedings for its foreclosure. The company put the bonds, secured by this mortgage, upon the market and disposed of a number of them. This mortgage was by public act, and was recorded in several of the parishes through which the main line and the branches were to run.
Company in aid of its construction of a railroad from New Orleans to Baton Rouge; thence by way of Alexandria to the eastern terminus of the Texas Pacific Railroad at Shreveport.
On November 11, 1871, the Baton Rouge Company filed in the General Land Office a map designating the general route of its road from Baton Rouge, by way of Alexandria, to Shreveport, and thereupon the withdrawal of the public lands along this line was ordered in accordance with the provisions of the above act of Congress, secs. 12 and 22. In 1881, the Baton Rouge Company transferred all its right, title, and interest in these lands to the Pacific Company, and in March, 1885, patents were issued to said company, as assignee of the Baton Rouge Company, for 679,287 acres of land lying in different parts of the state.
At the time this assignment was made, no work either upon the main line or upon the branches had been done by the Baton Rouge Company. December 28, 1870, the Baton Rouge Company executed a second mortgage to the governor of the state, as trustee, to secure the payment of certain bonds which were never issued. Such second mortgage having been subsequently cancelled, on September 4, 1872, one Allen assuming to act as president of the Baton Rouge Company, also executed a mortgage to secure the payment of 12,000 bonds, which, however, appear never to have been issued.
By acts of mortgage dated April 17, 1883, and January 5, 1884, the Pacific Company executed to appellants Dillon and Alexander a land grant and sinking fund mortgage upon the lands acquired from the Baton Rouge Company, to secure the payment of certain bonds, which the bill averred to be subsequent and subordinate to the mortgage executed by the Baton Rouge Company to secure the payment of the bonds in suit.
did not authorize a mortgage on the land grant or on future property; that the mortgage did not embrace the land grant; that the Baton Rouge Company made no definite location of its road, nor built any portion of the same; that the Pacific Company purchased from the Baton Rouge Company, as alleged in the bill, and thereupon constructed its road, and that the legal title to the land grant remained in the United States until patents were issued to this company. October 13, 1886, these defendants filed a cross-bill setting forth that the cross-complainants were endeavoring to sell the lands that had been patented to them, and were being embarrassed and prevented by reason of the claim set up by Parker in his bill; that as the mortgage sought to be foreclosed and the outstanding bonds secured thereby did not mature for several years, they would continue to be embarrassed for a long time; that Parker had sued on behalf of himself and of other holders of bonds issued under the mortgage of 1870, and, as complainants were advised and believed, represented upwards of two hundred of said bonds, each holder of which might bring suit and involve them in a multiplicity of suits, and that only a court of equity could afford relief by removing this mortgage as a cloud upon the title of the Pacific Company to the lands, and prayed for a decree adjudging that the mortgage did not embrace the land grant in question. Parker subsequently filed a demurrer to this cross-bill. On December 24, 1886, Hamlin intervened by petition, and was admitted as a co-plaintiff in the cause. Subsequently the case was heard, and separate decrees rendered in favor of Parker and Hamlin for the amounts of their several claims, adjudging the mortgage to be a valid lien upon the lands, which were ordered to be sold, and dismissing the cross-bill. Appellants took an appeal from these decrees to this Court. Parker thereupon moved for a dismissal of the appeal as to him upon the ground that less than $5,000 was involved. The consideration of this motion was postponed to the merits.
lands. Had the bill been filed by the trustee under this mortgage for the foreclosure of the whole amount of the debt, and a similar cross-bill had been filed for its cancellation, there could be no doubt of the appealable character of any decree rendered upon these pleadings. This mortgage, however, contained a provision permitting a foreclosure by any holder of an overdue bond or coupon. Parker's bill was filed practically for the benefit of the entire number of bondholders, and the cross-bill could not be sustained except upon the theory that the entire mortgage was invalid as a lien upon these lands. While a decree in favor of the cross-plaintiff might not have been binding upon any defendant to the cross-bill who did not appear, it certainly would have been binding upon Hamlin as well as Parker, since Hamlin, on being made a plaintiff, expressly stipulated that the cause should be considered as if he had been one of the original plaintiffs; that Parker's pleadings should be considered as his, and that the pleadings of the defendants should apply equally to him. If Parker's argument in this connection be sound, it would necessarily follow that if every bondholder of this mortgage had intervened and a cross-bill had been filed against them all praying a cancellation of the entire mortgage, our jurisdiction to review a dismissal of this bill could not be sustained as to any of such bondholders whose decrees were not more than $5,000, notwithstanding it would be sustained as to others whose decrees were larger. The result would be that the land might be sold for the benefit of the larger bondholders and freed from the lien of the smaller.
"They all claimed under one and the same title. They had a common and undivided interest in the claim, and it was perfectly immaterial to the appellant how it was to be shared among them."
The case of Rodd v. Heartt, 17 Wall. 354, is still more nearly analogous. In this case, which was in admiralty, a fund exceeding the jurisdictional amount paid into the registry of the court was claimed on the one hand by several creditors secured by one mortgage, and on the other by a number of mariners and materialmen. A decree having been made adverse to the mortgagees, an appeal was taken by them to this Court and it was held that although no one of the claims under the mortgage equaled the jurisdictional amount, yet as the claim of the appellants, which was disallowed, exceeded that sum, an appeal would lie. In The Connemara, 103 U. S. 754, it was held that where salvors united in a claim for a single salvage service jointly rendered by them, the owner of the property was entitled to an appeal where the sum decreed exceeded $5,000, though in the division among the several parties sharing in the recovery several were awarded less than $5,000. In line with these cases are those of Davies v. Corbin, 112 U. S. 36, and Handley v. Stutz, 137 U. S. 366.
The true distinction is between cases in which there are several plaintiffs interested collectively under a common title and those wherein the matters in dispute are separate and distinct, and are joined in one suit for convenience or economy. Of the latter class are those relied upon by the plaintiff Parker in this case, and his motion to dismiss must therefore be denied. Indeed, the cross-bill to set aside the whole mortgage as to these lands is sufficient of itself to remove all difficulty with regard to our jurisdiction.
answer this question satisfactorily it is necessary to consider the power of this company under its charter and the manner in which it attempted to exercise this power.
"real and personal estate within the State of Louisiana appurtenant to or necessary for the operation of said main line of rail road, owned by the company at the date of said mortgage, or which may be acquired by it thereafter, and upon the corporate franchises and privileges of said company, granted by the State of Louisiana, relative to the construction, operation, and use of said main line of railroad within the State of Louisiana,"
which shall be appurtenant to or necessary or used for the operation of said main line of railroad or of any of said branches; also the tenements, hereditaments, and appurtenances thereunto belonging, and all of the estate, right, title, and interest, legal and equitable, of the said company and its successors and assigns therein, together with the corporate franchises and privileges of said company at any time granted or to be granted by the State of Louisiana relative to the construction, operation, and use of said railroad within said state."
The bonds issued under this mortgage contained a similar description of the property, the latter clause of such description, however, purporting to include "the corporate franchises and privileges of said company granted by the State of Louisiana, or by act of Congress, relative to the construction," etc. How these words "or by act of Congress" came to be inserted in the bonds does not appear. It may have been an oversight, or the company may have supposed that the land grant would be acquired and that the insertion of these words would impart additional currency to the bonds. It is not material, however, to determine why or how this was done, since neither the act of the legislature nor the mortgage itself assumed in terms to cover anything granted by the act of Congress.
held not to cover municipal bonds issued to it in building the road, which were not embraced in such description. And in Bank v. Tennessee, 104 U. S. 493, where a bank was required by its charter to pay a certain tax in lieu of all other taxes and was authorized to purchase and hold a lot of ground for its use "as a place of business," and hold such real property as might be conveyed to it to secure its debts, it was held that the immunity from taxation extended only to so much of the building as was required by the actual needs of the bank in carrying on its business. See also Tucker v. Ferguson, 22 Wall. 527.
"lands purchased and sold at a profit, although the profit might be expended in the construction of the road, were never intended to be embraced by the phrase, 'acquired by the company for the purposes of the railroad.'"
v. Johnston, 53 Ala. 237, a mortgage of a railroad and "all other property now owned and which may be hereafter owned by the railroad company" was held not to cover a land grant of the United States, made by an act of Congress subsequently passed. Other cases to the same purport are Shamokin Valley Railroad Co. v. Livermore, 47 Penn.St. 465; Dinsmore v. Racine &c. Railroad Company, 12 Wis. 649; Farmers' Loan &c. Company v. Commercial Bank, 11 Wis. 207, 15 Wis. 424; Morgan v. Donovan, 58 Ala. 241; Walsh v. Barton, 24 Ohio St. 28; Calhoun v. Memphis & Paducah Railroad, 2 Flippin 442; Seymour v. Niagara Falls Railroad, 25 Barb. 284.
within the indemnity limits, it has always been held that no title is acquired until the specific parcels have been selected by the grantee and approved by the Secretary of the Interior. Grinnell v. Railroad Company, 103 U. S. 739; Kansas Pacific Railroad v. Atchison, Topeka &c. Railroad, 112 U. S. 414, 112 U. S. 421; St. Paul &c. Railroad v. Winona & St. Peter Railroad, 112 U. S. 720; Barney v. Winona & St. Peter Railroad, 117 U. S. 228; United States v. Missouri &c. Railway, 141 U. S. 358, 141 U. S. 375; St. Paul &c. Railroad v. Northern Pacific, 139 U. S. 1. A definite location of this line was subsequently made by the Pacific Company, but there is no evidence that such location coincided with the general route designated by the Baton Rouge Company, and, as no patents were ever issued for the lands earned by the construction of the road until March, 1885, when they were issued to the Pacific Company as assignee of the Baton Rouge Company, it is difficult to see what lands were ever "acquired" by the latter company to which this mortgage would attach.
Not only this, but there is no allegation or evidence that the Baton Rouge Company paid the cost of surveying, selecting, and conveying these lands as required by the Act of July 31, 1876, 19 St. 102, 121, c. 246, as a preliminary to their conveyance. New Orleans Pacific Railway v. United States, 124 U. S. 124; Deseret Salt Co. v. Tarpey, 142 U. S. 241. Nor is there any evidence to show that the Baton Rouge Company ever built any of its line of road or did anything to earn or acquire the title to any part of its land grant.
"have a common interest in this security, and are all equally entitled to the benefit of it, and in case of a deficiency of the fund to satisfy the whole of the debt, in equity a distribution is made among the holders pro rata. . . . To permit, therefore, one of the bondholders under the second mortgage to proceed at law in the collection of his debt upon execution would not only disturb the pro rata distribution in case of a deficiency and give him an inequitable preference over his associates, but also have the effect to prejudice the superior equity of the bondholders under the first mortgage, which possesses the prior lien."
Jones on Railroad Securities, sections 392, 393, 434; Fish v. N.Y. Water-Proof Paper Co., 29 N.J.Eq. 16; Martin v. Mobile & Ohio R. Co., 7 Bush 116.
should be a deficiency in the security, real or apprehended, everyone interested should have notice in advance of the time, place, and mode of sale, that he may make timely arrangements to secure a sale of the property at its full value."
In the view we have taken of the case, it is unnecessary to consider the other points made by the defense. We are satisfied, both from the words of the mortgage itself and from the circumstances attending its execution, that it should not be construed to include the land grant subsequently made to this company.
Reversed, and the case remanded, with instructions to dismiss the bills of Parker and Hamlin, and for further proceedings in conformity with this opinion.

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