Court Opinion

ID: 5555757
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:40:50.747112+00
Date Added: 2024-06-11T08:35:19.350828
License: Public Domain

Warner, Judge.
This is a bill filed by the State of Alabama, in the Superior Court of Dade county, against the defendants, who are the creditors of the Alabama and Chattanooga Railroad Company, having numerous and various claims against said company which they are endeavoring tt> enforce against the property of said company, in the county of Dade, by every *472process (in the language of the complainant’s bill) known to the law. The complainant alleges that the State of Alabama is the indorser of the bonds of said company to the amount of several millions of dollars; that the company, owing to the fraudulent conduct of Daniel N. Stanton and John C. Stanton, the one as President and the other as Superintendent of said road, and their associates, in the misapplication of the funds of the company, and mismanagement of its affairs, is utterly insolvent; and that the State of Alabama, the complainant, mnst lose heavily as the indorser of the bonds of said company; that said road is constructed in the States of Mississippi, Alabama, Georgia and Tennessee; that a large portion of the property of said road in the county of Dade, consisting of rolling stock, wood, crossties, fixtures, etc., has been levied on by attachments, and judgments founded upon the foreclosure of liens for labor and material, and is now advertised for sale; that the said property is rapidly deteriorating in value, and will be sacrificed if sold under the present complications, and serious and irremediable injury will be suffered by the complainant. The execucution of the mortgage deed of trust to the State of Alabama, on the road, was acknowledged by the President of the company and Treasurer, in its corporate capacity, before the Clerk of_the Superior Court, of Dade county, and recorded in his office on the 1st day of January, 1869. By the Acts of the General Assembly of this State the company was authorized to construct the road through the county of Dade on certain conditions therein explained. The bill prayed, amongst other things, for an injunction to restrain the creditors of the company from selling the property of the road in the county of Dade, and for the appointment of a Receiver to take charge of the same. On the hearing of the motion for the injunction and the appointment of a Receiver, counsel, representing the State of Georgia, (though the State was not a party to the bill) appeared ’before the Court and objected to the granting of the injunction, and read to the Court the procla*473mation of the Governor of this State, made in pursuance of the Acts of the General Assembly, passed in 1869 and 1870, granting' State aid to this railroad company, and other companies in this State, the Governor having indorsed the bonds of the company to the extent of $8,000 00 per mile. The third section of the Act of 1869 provides, “That in the event any bond so indorsed by the State, as provided in the first section of the Act, or the interest thereon, shall not be paid by said railroad company, at maturity, it shall be the duty of the Governor, upon information thereof, to seize and take possession of all the property of said railroad company, and apply the earnings thereof to the extinguishment of said unpaid bonds and the interest on the same, and upon continued default for the period of six months, he may sell said property in such manner as may best subserve the interest of all concerned.” The proclamation of the Governor is dated the 2d of August, 1871, and recites that the company has failed to pay the semi-annual interest due on the indorsed bonds on the 1st days of January and July, and ordered a seizure of the road and all its property of every description lying or being in this State, and placed the same in the possession of Messrs. Nisbet & Graham, as agents for the State. The Court granted the following order :
“ Ordered by the Court that the State’s writ of injunction issue in accordance with the prayer of complainant’s bill, but that said injunction shall not restrain or interfere with the sale of said railroad by the Governor of Georgia, according to the laws of said State. It is further ordered, that William T. Wofford, of the county of Bartow, in this State, be and he is hereby appointed Receiver in said case, to take charge of and preserve and protect the property of the said Alabama and Chattanooga Railroad Company, in accordance with the law of this State applicable to this case. The Receiver appointed in this case so soon as he is qualified as required by the order of appointment, is directed to take into his custody and safe keeping that portion of the Alabama *474and Chattanooga Railroad situated in the State of Georgia, and all the property of the Alabama and Chattanooga Railroad Company now in said State of Georgia of every kind and description whatsoever; and it is further ordered, that said Receiver negotiate with the parties in charge of and controlling other portions of said Alabama and Chattanooga Railroad situated in other States, for the running of said road through its entire length, from Meridian to Chattanooga.”
Whereupon the defendants, by their counsel, excepted.
It appears from the complainant’s bill that this is a continuous line of railroad from Meridian, in the State of Mississippi, to Chattanooga, in the State of Tennessee. In our judgment, the allegations in the complainant’s bill make a proper case for an injunction to restrain the sale of that portion of the road being in this State, and the property of the company appertaining thereto in this State by the judgment creditors who have levied on the same in satisfaction of their numerous conflicting liens, so as to prevent a multiplicity of suits, and to prevent irreparable injury and damage to the respective indorsers of the bonds of the company, both in regard to the State of Alabama, and the State of Georgia, as well as the other creditors of the company in this State. When the road is sold it will be best for all the creditors of this insolvent company, that it should be sold together, with its equipments, as an entire road, and not in detached parts, and in the meantime the road should be run and kept in operation throughout its entire length, for the benefit of all concerned, so that when it shall be sold it may bring its full market value. We therefore affirm the judgment of the Court below in granting the injunction and appointing a Receiver, with the instructions given to said Receiver, with this additional instruction, “that said Receiver negotiate with the Governor of Georgia in regard to the possession and running of the road through this State,” as well as with the other parties in charge of and controlling other portions of *475said road situated in other States, for the running of said road through its entire length, from Meridian to Chattanooga.
Let the judgment of the Court below and the instructions to the Receiver be affirmed, and the Court below is directed to give to the Receiver the additional instruction, as herein specified.