Court Opinion

ID: 6961633
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:46:37.813002+00
Date Added: 2024-06-11T16:08:25.903648
License: Public Domain

Mr. Justice Sheldon delivered the opinion of the Court: As in the decree of foreclosure judgment was rendered on these twenty-eight bonds for the sum of $36,360, the amount due upon them, and that- constituted a part of the whole amount of the decree upon which the mortgaged property was sold, it is contended by appellant that by the return by the bank to the company of these twenty-eight bonds there reverted back to the company so much of the property sold to satisfy the decree as was represented by $36,360 of the decree. This would be treating these twenty-eight bonds as if they were the bonds of some other party than the company,—as if they had, in fact, been actually returned to the company, and as if the sale had been for the full amount of the decree. But these twenty-eight bonds had never been sold and negotiated by the company,—they were merely pledged by the company as collateral security for the payment of the company’s three notes.' Both were but the promises of the company,—the notes the original promises, and the bonds the collateral promises,—and upon the payment of the notes, the original promises, the bonds, the collateral promises, were discharged, and the return of the latter to the company would vest in the company no property in the bonds, their own promises. There were, in fact, no bonds returned by the bank to the company. Upon the payment of the bank debt, the bank, for its protection, to show that it had accounted for the bonds to the railroad company depositing them as collateral security, required from the president of the company a receipt for the bonds as returned back by the bank to the railroad company. It was but a formality. There were no bonds returned. They were remaining in the hands of the master, where they had been léft by the bank on proving them up before him, when the decree was taken for the amount of the bonds, for “the use of the bank, ” and they were merged in that decree. The sale was not for the amount of the mortgage indebtedness for which the decree was entered. The property sold but for $2000,—the amount only, as the garnishee answers, of the costs and expenses of the foreclosure, which sum was contributed and paid from the assessment of five dollars upon each bond, so that there was really no part of the decree for the mortgage indebtedness satisfied by the sale of the mortgaged property. Besides, the decree, at its close, recited that these twenty-eight bonds, with other personal property, had been pledged for the payment of the indebtedness secured to be paid by the deed of trust to William W. Wagdin,—that indebtedness, as before observed, being the bank debt,— and then says: “All which bonds and personal property remain pledged for the indebtedness in said deed of trust to William W. Wagdin, the bonds or the judgment upon them in this suit, and said personal property, to be surrendered. ” As the property was to be sold subject to this Wagdin deed of trust, it was a very proper provision that these twenty-eight bonds, or the judgment upon them, which were held but as collateral security for the indebtedness in the trust deed mentioned, should be surrendered. This provision in the decree neutralized the portion of it for the payment of these twenty-eight bonds, and taking the whole decree together, there was in reality no decree for the payment of those bonds, this final provision rendering the decree as if there had been no order in it for such payment. But it is contended further, that the property was purchased at the foreclosure sale for, and on behalf of, all the bondholders, and that if the twenty-eight bonds, or the judgment upon them, can not be followed and availed of as the property of the company, yet the company has an interest in the property bought at the foreclosure sale, as purchaser, as being one of the bondholders for and on whose behalf the property was purchased. It is true that on the proceeding for the confirmation of the report of the foreclosure sale, it appears there was introduced in evidence the affidavit of the three committeemen who were appointed to bid in the property, which stated “that the committee was appointed to buy the mortgaged property at the sale, in trust for the bondholders, with power to bid it in, to the extent of the indebtedness as found by the decree, if necessary, and expressly providing that any purchase made by them should be in trust for the bondholders; that so far from any one expecting to get a valuable property for nothing, the property was bought for the benefit of all the bondholders, and is so held by the committee, ” and the report of the sale was thereupon confirmed by the court. The garnishee in his answer states that the purchase was made by the committee appointed by a part of the persons interested in the bonds; that the purchase was not made for all the bondholders, but only for such as subscribed a paper agreeing the purchase should be made by said committee, and that the interest of each purchaser should be in proportion to the bonds held by him; that these twenty-eight bonds were not represented in the purchase. This paper writing was not in evidence. One of the committee named testified on the hearing in this garnishment proceeding, that he was one of the committee to bid in the railroad for th.e new organization; that the committee turned the whole railroad and its property over to the new company when it was organized; that the purchase was for all that came in; that all the bondholders could come in; that these twenty-eight bonds did not come in, and some others, when they turned the property over to the new organization. It appears that nothing was done on behalf of these twenty-eight bonds, either in paying the assessment of five dollars on each bond to pay costs and expenses of foreclosure, or in coming in to the new company and taking stock therein for the amount found due upon the bonds, at one-half such amount,—the mode of formation of the new company. If we take the ex pwrte affidavits introduced on the confirmation of the foreclosure sale as proper evidence in this case, we then have a conflict of evidence whether the purchase at that sale was for and on behalf of all the bondholders, or of only certain of the bondholders, not including the holders of these twenty-eight bonds. As on appeal from the Appellate Court we do not review any determination of controverted facts, but only questions of law, in the absence of anything in the record showing what was the finding of fact, we must take it to have been in the way most favorable for the support of the decision made; and in the present case, that the property was not purchased at the foreclosure sale for and on behalf of all the bondholders, but for and on behalf of a portion of them only, of which the holders of these twenty-eight bonds, or the Galena and Southern Wisconsin Railroad Company, did not form a part. Not perceiving from the record that at the time of the service of process on the garnishee, or since, he was indebted to such railroad company, or had any effects or estate of the company in his possession, custody or charge, or that the company itself had any property whatever, the judgment of the Appellate Court must be affirmed. Judgment affirmed.