Court Opinion

ID: 8791502
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:53:04.783841+00
Date Added: 2024-06-11T17:03:22.852585
License: Public Domain

SEAMAN, Circuit Judge
(concurring). The agreement with Beggs and Bfister, mentioned in the foregoing opinion, was obviously made not only for the purchase of their bonds but for the express purpose of preventing them from becoming bidders at the foreclosure sale of the Illinois lines. It was made at the instance and for the benefit of the so-called “Assisting Syndicate,” as owners of a large share of the bonds resting alone on the Wisconsin line, to save their interests therein from jeopardy through an independent purchase of the Illinois lines, which was threatened by Beggs and Pfister for annexation to a rival Wisconsin line. So, whatever may have been the benefits of such arrangement to preserve unity of the two mortgaged lines upon foreclosure sale, it may lightly be held that such suppression of a prospective bidder for the Illinois line was prejudicial to the interests of nonassenting holders of bonds applicable alone to the Illinois -line. I believe it to be well recognized that reorganizations on the part of bondholders are needful and legitimate means for the purpose of purchasing the mortgaged property at foreclosure sales; that no bondholder can be brought into such reorganization without his consent; that bonds may be purchased of a nonassenting bondholder for the purpose *613(express or implied) of foreclosing his objections or attempts to interfere with the reorganization plans; that equality in prices so paid is not,' generally speaking, an essential requirement in such transaction; and that suppression of competition, either for reorganization or for the purposes of the sale, which may arise in such purchases or arrangements, neither disqualifies the purchasers to become bidders at the sale, nor, per se, invalidates the sale. Accordingly, in judicial sales of railroad properties these several elements are frequently involved, resulting in a single bid much below the estimated actual value of the properties; and the sale thereupon may rightly be confirmed by the court.
I concur, nevertheless, in each proposition of the opinion for affirmance of the decree appealed from, although I have hesitated over the tenability of the objection founded on th'e Beggs and Pfister transaction. . It cannot be doubted, however, that the trial court proceeded within its authority 'and duty for the protection of all interests involved, to ascertain whether the foreclosure sale was accomplished equitably, with no unfair advantage taken as against the nonassenting bondholders. Thus, when the transaction with Beggs and Pfister was plainly presented in the character above stated, I am satisfied that confirmation of the sale was rightly withheld, pending the further inquiry whether injury resulted in an unfair bid by the single bidder at the sale; and that the finding of inadequacy and unfairness thereupon should not be disturbed.
Whether the interest of all parties may not be best subserved by reopening the hearing for bidding in open court without the delay of resale by the master is matter entirely within the judicial discretion of the trial court, as I believe; but, if the provision for resale by the master were otherwise open to review in this court, the record furnishes no ground therefor, as well remarked in the opinion for af-firmance.