Court Opinion

ID: 8851969
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:16:53.154264+00
Date Added: 2024-06-11T17:05:31.769945
License: Public Domain

WOODS, Circuit Judge
(concurring). If it be concededlas now asserted, “that the original bill was a creditors’ bill seeking satisfaction of the complainants’ judgments out of the assets and property of the Danville Company, and particularly out of the value of the equity of redemption belonging to that company in-the property which had passed into the hands of the Eastern Illinois Company,-’ it does not follow that .the lien thereby created upon the alleged equity of redemption attached to the bonds in question, as a substitute for the. equity, when they were afterwards issued. The bonds were not in fact intended by the parties to the transaction to be such substitute. They were not given'in whole or in part in- consideration of the surrender of that equity, though it is of *667course true that by giving the release of errors, which was only a part of the consideration for the issue of the bonds, the Danville Company waived all right of its own to assert such equity. But if the equity existed and the appellants by bringing their bill acquired a lien upon it, that lien tvas not affected by the execution of. the bonds, and their proper course, as against the Eastern Tlli-no’is Company, was to prosecute their suit under the original bill to final decree, subjecting the equity, if established, to sale for the satisfaction of their demands. Upon any possible theory, the existence of that equity is essential to their case. Moreover, if the equity and the lien thereon asserted under the original bill be admitted, and in addition it be conceded that under the amended and supplemental bills the bonds, as a substitute for the equity, came under the same lien, it: does not follow, in my opinion, that the appellants were harmed by the decree from which they have appealed. By asserting such substitution they necessarily abandoned all attach upon the title acquired by the Eastern Illinois Company and acknowledged that the bonds represented the full value of the equity which their original bill was designed to reach. This is admitted in the brief in support of the petition for a rehearing, where it is said:
“The bill (loos not attack the method which it charged had been adopted between the Kastern Illinois Company and the officers and stockholders of the Danville Company for releasing the equity of the Danville Company in Hie property to 1he Eastern Illinois Company. It does not seek to prevent ihat. scheme of transferring the right being carried into effect, and it did not seek to have the decree set aside. It made no objection to the price which had been fixed ns the value of the equity; and it could have made no objection to that price, because it was sufficient to satisfy complainants’ judgments. The attack of the bill is solely on the proposed payment of the value of that •equity, or of the sum which should be substituted therefor, to the Danville Company, or to those persons who intended to use it for their individual benefit, if the scheme should be carried inro effect.”
On that, basis the question plainly is whether the appellants, as judgment creditors of the Danville Company, were entitled to have the bonds applied to the payment of their demands. The Dan-ville road had been sold to the vendors of the Eastern Illinois Company, upon a decree of foreclosure of first mortgage bonds of which Fosdick and Fish were trustees, for $1,450,000, leaving the decree unsatisfied to the amount of $6,325,712.85. After the sale, and after the purchase by the Eastern Illinois Company, the decree had been reversed by the supreme court. If there was a right of redemption from the sale it was because of that reversal, and if that was the effect of the reversal, then the mortgages which had been merged in the decree were thereby reinstated and were again a lieu upon the property for the entire amount thereof, as if there had been no foreclosure and sale. Besides, there was the second mortgage, of which Elwell was the trustee, for more than $600,000, to which the lien of the appellants was subordinate. Without payment of prior liens in full the appellants could have no interest in the equity of redemption, or in the bonds considered as a substitute therefor; and if the holders of the prior liens permitted *668their officers and agents, or strangers, to appropriate the equity, or its proceeds or substitute, it is no cause for complaint by the appellants, unless the values so disposed of exceeded the prior liens and included something which justly belonged to them. That has not been shown, and the contrary is in effect admitted by the theory of the petition for a rehearing.
The petition is denied.