Court Opinion

ID: 8759724
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:01:43.350501+00
Date Added: 2024-06-11T17:01:29.333843
License: Public Domain

SEAMAN, Circuit Judge
(after stating the facts). The appellant, as the purchaser of the railroad property under the foreclosure decree, assumed liability for all claims and liens which were subsequently adjudged to be entitled to priority, under applications filed within six months after the entry. Two mortgages were involved in that decree—one made by a predecessor corporation to Metropolitan Trust Company and another, as trustees, January 1, 1887, securing bonds to the amount of $375,000, and the other made by the Chicago & Southeastern Railway Company to Central Trust Company and another, as trustees, October 30, 1891, securing bonds to the amount of $1,425,000. The bill for foreclosure was filed in the trial court by the Central Trust Company, representing the second mortgage, and a receiver was appointed over the property. Subsequently the trustees of the first mortgage intervened and filed a cross-bill to foreclose such mortgage. The decree provided accordingly for payment of the first mortgage out of the proceeds of sale and for application of the remaining purchase money upon the second mortgage, but subjected the proceeds to prior payment of all claims adjudicated at the foot of the decree to be entitled to priority. The proceeds largely exceeded the first mortgage, so that was paid in full, leaving the residue to be awarded as the decree directs. Thus no right or interest arises except such as exists in the second mortgagee—'the appellant, under the final provisions of the decree referred'to, standing merely as the representative of such interest in the disposition of proceeds—and any equities in favor of the prior mortgagee extend only by way of security for its bonds, and, upon their payment, do not accrue to the second mortgagee, as against intervening claims and equities. Therefore, the only question for review is whether the appellees’s claim was rightiy awarded priority over the second mortgage. Rights vested in the Chicago & Southeastern Railway Company, mortgagor, through its purchase of the property or otherwise, are of course involved in the inquiry, but not any independent equities which may have arisen to save the prior mortgage from impairment. The view thus stated, which we believe» to be unquestionable, is studiously ignored in the argument for reversal, and, in so far as the various contentions rest on assertions of equity for the benefit of the" first mortgagee, no further discussion is deemed necessary.
The complicated facts in evidence, relating to the chain of conveyances under which the appellee deraigns title, possessions of the right of way strip, and the relations and acts of predecessors in title, are the main reliance for defeating the claim. These facts, reported by the master, are well arrayed in the argument of counsel for the appellant and pressed for consideration, and are not without force to the end sought, unless the subsequent adjudications touching the subject-matter of this controversy are binding upon these parties and decisive. If the adjudications referred to are thus operative, the preexisting facts are not reviewable, either as tending to create an estoppel against a claim for compensation, or indicating an accord and satisfaction, or.defect in title to a portion of the strip in question. In passing to the consideration of the litigated matters, however. *50these leading and undisputed circumstances may well be noted: The original entry upon the strip in question, for right of way purposes, was by a predecessor railway corporation (referred to in argument as the Anderson Company) in 1873, when one Messick, one of the officers' of the company, owned the farm and acquiesced in the entry, without condemnation or payment. Such entry consisted of location and light grade work. In 1874, with no further use made of the entry, Messick re-entered upon and inclosed the right of way strip within his farm, and thereafter for about 13 years the strip was in his exclusive possession, under cultivation as a part of the farm. In 1875 the Anderson Company mortgaged its property under general terms, and the mortgage was subsequently foreclosed and the property sold to the Midland Railway Company in 1885; and this company made re-entry upon the strip in 1887, and proceeded with the construction of a railroad, which was, on completion, continuously operated as a line of railroad, by it and its various successors in inr terest or occupation. On October 30, 1891, the Midland Company transferred its property to the Chicago & Southeastern Railway Company, and the mortgage in question to the Central Trust Company and Collett, as trustees, was executed by the purchasing company on the same day. The several adjudications involved in this review arose out of litigation which ensued immediately upon the above-mentioned reoccupation of the right of way strip by the Midland Company, in 1887.
1. On November 21, 1887, Elizabeth A. Messick, as the alleged owner in possession of the farm, brought an action against that company, in the circuit court for Montgomery county, to quiet title to the strip, under the provisions of section 1070, Rev. St. 1881 .of Indiana (1 Burns’ Ann. St. 1894, § 1082). The Midland Company answered (1) in a general denial, and' (2) averring ownership through the Anderson Company, under facts stated. On change of venue to Putnam county the issues were tried May 16, 1892, and resulted in a judgment in favor of the plaintiff, that the “claim of said Railway Co. was groundless,” and- the plaintiff “was the owner in fee of said strip of land,” and “that her title thereto be forever quieted.” The appellee’s title is derived from the plaintiff in that judgment, and the transfer from the Midland Company to the Chicago & Southeastern Railway Company, and its mortgage to the Central Trust Company and Collett, as above mentioned, were made pending such suit, October 30, 1891. The conclusive effect of such judgment, as between the parties, is settled by the recent opinion of the Supreme Court of Indiana, in the case (referred to later on another point) involving the same claims of title, reported as Chicago & Southeastern Railway v. Charles W. Grantham, Administrator, etc., 75 N. E. 265. As there stated:
“The decree quieting the title to said land therefore adjudged that the whole interest was absolutely in Elizabeth A. Messick, and that the claim of the Midland Railway Company was groundless. Such a decree cuts off every claim, whatever its form or character, or.any easement or other interest in the land.”
*51And the Indiana cases supporting such view are cited. Without reference to the force of this ruling upon the present controversy, we adopt its interpretation of the issues thus set at rest, as both just and applicable to this adjudication.
2. After obtaining such judgment, Mrs. Messick conveyed to Wesley Grantham the land which includes the right of way strip referred to, and such grantee, in March, 1893, sued the Chicago & Southeastern Railway, in the circuit court for Montgomery county, to recover possession of the strip. The company answered, setting up substantially the same defenses interposed by the Midland company in the first mentioned action; and, upon change of venue to Putnam county, in December, 1894, the plaintiff obtained judgment of ownership and for recovery of possession of the right of way strip. A writ of possession was issued and executed by the sheriff, so that Wesley Grantham (appellee’s grantor) obtained physical possession of the strip, for a period of several days. Thus the railway use was severed for the time, but soon resumed, under injunction proceedings. All issues touching the title were plainly settled against the purchasing corporation by this adjudication, if not concluded by the earlier decree, and the judgment is not open to collateral attack (as sought i-n the present contest) under the authorities, state or general. Unreversed and unappealed from, it concludes the parties and privies—■ that the title was in the appellee’s grantor and the railway company was a trespasser—and the question is not reviewable here whether either judgment or dispossession thereunder were rightful.
3. The remaining inquiry, therefore, is the nature and effect of the proceedings instituted by the appellee, July 26, 1901, for an assessment of damages against the Chicago & Southeastern Railway Company, for taking and appropriating the right of way strip in question; Wesley Grantham having conveyed to the appellee the portion of land which embraced such strip, with delivery of possession of the right of way strip during the interim of the grantor’s exclusive possession under the ejectment writ. Formal compliance with the statutory provisions (1 Burns’ Ann. St. Ind. 1894, Art. 30), in the application and proceedings, is unquestioned. The Central Trust Company was included as a party defendant, with the railway company and the prior mortgagee, to answer any interests or adverse claims, and issues were made up and tried in conformity with the statute (1 Burns’ Ann. St. Ind. 1894, Art. 30, §§ 896, 908) upon pleadings on the part of the railway company setting up its claims to the right of way strip and various objections to the proceedings. The verdict was against all of the defendants upon the issues, with the damages assessed against the railway company. That any issue affecting the title to the strip—right to, as well as liability for, the damage—was properly adjudicated in that proceeding, not only impresses us to be the statutory purpose, but is established by the recent opinion, of the Supreme Court infra, upon appeal from like proceedings and judgment.
With the occupancy of the right of way strip by the railway company thus adjudicated as wrongful, and the right to recover damages *52established in the appellee at the amount assessed, we are of opinion that the answers to his intervening petition for its allowance •out of the fund in court raised no issuable matter, and the decree justly awards such payment. The Central Trust Company is equally subjected to the adjudications, and neither it nor the appellant is entitled to reopen any of the issues so settled. An objection is raised against the appellee’s right to recover, under the finding of an agreement with his grantor respecting these damages, which is assumed to create a beneficial ownership in the grantor and leave the petitioner no substantial interest. This objection, if tenable in this forum in any view of the facts, is within force under the last-mentioned adjudication.
The report of the master, in reference to the adjudication of the Clinton county circuit court on the assessment of damages (No. 25), states that an appeal therefrom was taken to the Appellate Court and is pending. Since the hearing below an opinion has been handed down in the Supreme Court of Indiana, on transfer from the Appellate Court, in the above-mentioned cognate case of Chicago Southeastern Railway Co. et al. v. Charles W. Grantham, Administrator, etc., 75 N. E. 265, which affirms the judgment of the Clinton circuit court on appeal in that case. While the decision is not in the case involved in this review, nor could it be treated as within the present record were it identical, nevertheless, the published opinion is well entitled to the highest consideration, here as elsewhere, as an expression of the law of that forum upon facts substantially identical. For interpretation of the statute in question and the proceedings thereunder, including applicability to the same state of facts, that opinion' is both satisfactory and controlling. The rule which it upholds in reference to these prior adjudications confirms the view expressed in the foregoing opinion, while both conclusions are well fortified by the doctrine stated in Southern Pacific R. R. v. United States, 168 U. S. 1, 48, 18 Sup. Ct. 18, 42 L. Ed. 355, and authorities cited and reviewed.
The decree of the Circuit Court accords with such conclusions, and it is affirmed.