Year: 1874

APPEAL FROM THE CIRCUIT COURT OF
THE UNITED STATES FOR THE
DISTRICT OF LOUISIANA


Mr.. Justice Strong delivered the
opinion of the cour*. 49, .---


The complainants are holders of six
hundred and sixty, out of seven hum
dred and sixty-one, bonds of one thou
sand dollars each, issued by the Vicks-
burg, Shreveport and Texas Railroad
Com pany, and secured by a mortgage
upon the railroad and its appurtellances,
and upon the franchises and personal
effects of the company, together with
more than four hundred thousand acres
of land. Their bill is filed as we'll for
themselves as for all other bondholders
whose situation is similar to theirs.
Some Of them are also preferred stock
holders of the company to large
amount. The mortgage was made by
an authentic act on the first day OF Sep
tember, A. ID. 1867, TO John Ray or
bearer, to secure the full, faithful, and
punctual payment and redemption of
each and all the bonds issued under it
to any and all the future holders there
OF, and to each and every one of them,
when the same should become due and
payable, together with the interest
accruing thereon. The relief sought by
the bill is that tho mortgage may be
declared to be a valid lien upon all the
property described therein: that a sale
averred to have been made under it in
1856, to the defendant Ludeling and his
associates, may be set aside, and the
deed made to them may be declared to
be fraudulent and void that the defen-
dants may be enjoined against setting
up any title under the sale and the
deed prohibited from selling any of
the property, rights, and privileges of
the railroad company, and required to
account for all money received by them
on account Of the corporation, and that
the mortgaged property may be decfeed
holders, the preferred and other stock
holders. The bill also prays for the
appointment of a receiver and for other
relief.


To the bill and the relief asked the
only defense set up is what is alleged to
have been judicial sale of the mort
gagged property under executory process
at the suit of William r. Gordon, one
of the defendants, and the Importance
presented by the record is whether that
sale, as against these conplainants,
eXtinguished the lien of the mortgage.


The sale was made under an ex parte
order, obtained from judge in cham
bers on the 23d day of December, 1865,
at the suit of Gordon, who described
himself as owner of four of the mort
gage bonds, upon which interest coupons
amounting to S72O We're due and re-
manned unpaid. The petition for the
order of sale did not aver that Gordon
was the owner or bearer Of the mort
gage, or that he had any rights therein
superior to the rights of any other bond
holder for whom the mortgage was q
security. It might, perhaps be doubted,
therefore, whether under the law of
Louisiana he was in u condition to
petition for executory process for a sale
of the mortgaged premises, and whether
the judge had any authority on his
petition to order a sale. No question
of this kind, however, is seriously made
here, and we proceed to notice at
once the manner in which the process
was used, the proceedings prior to the
sale and at the sale, and the actions and
relations Of the purchasers. Gordon's
petition made no disclosure of the
name of any other holder of bonds
secured by the mortgage. Ostensibly
he sued for himself alone. He asked
for no notice, and none was given, of
his application to ony other bondholder,
though there were seven hundred and
sixty-one bonds outstanding, held prin-
cipally in other States. The order Of seiz-
ure was granted by the judge on the 23d
day of December, 1866, but it was not
filed in the clerks office until Saturday,
the 30th of that month, late in the
afternoon, and on that day the sheriff
made seizure and served notice
thereof upon H. NJ. Bry, who was then
acting as the President of the corpora
ton. and who subsequently became
one of the purchasers at the sale. On
the I'd Of January, 1866, the sheriff
advertised the property for sale in one
newspaper published in the town of
Monroe, and by posting copy of the
advertisement on the church door and
another at the door of his office. The
salewas appointed for the first Saturday
of February, which was the earliest
day on which it could he made under
the law of the State. By that law the
property seized was required to be
appraised, and could not be sold for
less than two-thirds of its appraised
value. 1t consisted of railroad about