Eaton & Hamilton R. R. v. Hunt

Perkins, J. On the 1st day of November, 1852, there existed a corporation in the State of Indiana, created under a law of the State, with power to construct a railroad from Richmond, Indiana, to the Ohio State line, a distance of about six miles. The corporation was known by the name of the Richmond and Miami railroad company. On the day named, that corporation issued sixty bonds of 1000 dollars each, payable to George Carlisle or bearer, and on the same day executed to said Carlisle, as trustee, a mortgage on the six miles of road named, as security for the payment of the principal and interest of the bonds. The bonds were guaranteed by a railroad company in Ohio, called the Hamilton and Eaton railroad company, created by or under a law of that State, and vested with power to construct a railroad from Hamilton, Ohio, to the State line of Indiana, in the direction of Richmond in the latter State. In 1853, the Richmond and Miami road was completed. On the 1st day of January, 1854, forty additional bonds were issued by the Richmond and Miami company, and a second mortgage was executed thereby to Carlisle, upon the six miles of their road, to secqre the payment of them. The first mortgage bonds became due on November 1,1862, and the interest on them was payable semi-annually, but was not paid. John Hunt and others, plaintiffs below in this suit, are owners of fifty-seven of those first mortgage bonds. The plaintiffs had required Mr. Carlisle, the trustee, to proceed to enforce their rights against the railroad company, under the mortgage, and he had refused to do so. Legislative acts of Ohio and Indiana authorized the Eaton and Hamilton and the Richmond and Miami railroad companies to consolidate, upon such terms as might be agreed upon, but neither of those acts contained any provisions surrender — 460 — ing the jurisdiction of either State to the other over the consolidated company. At their date, the two companies executed the following articles of consolidation: “An agreement made and entered into by and between the' Richmond, and Miami railroad company, duly incorporated by the General Assembly of the State of Indiana, of the one part, and the Eaton and Hamilton railroad company, in like manner incorporated by the General Assembly of the State of Ohio, of the other part, witnesseth : That, “ First, These companies, their capital stock, their roads, debts, dues, rights in action, franchises, interests, and property of every kind, character and description, shall be, and hereby are, merged, united and consolidated, into one joint-stock company, one road, one interest, and one property, upon the terms following, that it is to say: . “ Second, The corporate name, franchises, rights, immunities and organization, of the Eaton and Hamilton railroad company, shall be preserved and remain intact, and the said consolidated company shall be known by, and its business transacted, in that name, in every sense, as if this consolidation had not taken place, except so far merely as the enlarged interests of the company, and a compliance with the laws of Indiana, may modify the same. “ Third, The debts, dues and rights in action, owing to, and accruing in favor of, the said Richmond and Miami railroad company, all and singular the rights and franchises, the road with its right of way, fixtures and appurtenances, depot and other station grounds, buildings and water tanks, with all other rights and interests and property, real, personal, and mixed, of every kind, character, and description, and all and singular, the interest, right and titles therein, whether legal- or equitable, of the said Richmond and Miami railroad company, are to be, and are hereby, granted,, transferred and con — 461 — veyed to, and merged in, those of said Eaton and Hamilton railroad company, its successors and assigns forever, as fully and completely, to all intents and purposes, as they are now vested in the said Richmond and Miami company. “ Fourth, The said Eaton and Hamilton railroad company is to, and does hereby, assume the franchises, rights, immunities and liabilities of the said Richmond and Miami railroad company, and especially is to assume, liquidate and pay all debts, dues, and liabilities, outstanding against it, and to that end is, so far as the unfunded indebtedness extends, to apply semi-annually, to its liquidation, an amount equal to one-seventh of the net surplus earnings of the entire road, until-the whole shall be paid, and is, upon the surrender of certificates, or other evidence of ownership of the capital stock of the said Richmond and Miami company, to issue to -the party in interest evidence of ownership of a like amount of the capital stock of said Eaton and Hamilton railroad company. “ Fifth, This agreement shall take effect and be in force on and after the 1st day of December, 1854, at which time the name and organization of the Richmond and Miami company shall cease, and its separate legal identity, franchises, rights, interests, property, &c., vest and merge into those of the said Eaton and Hamilton company. In witness,” &c. November 21st, 1854, signed, sealed, &c., by the officers of the companies. Prior to the consolidation, bonds and mortgages had been issued by the Hamilton and Eaton company, which were liens upon the road of that company in Ohio. After the consolidation, bonds were issued, secured by mortgages on the entire line of the road, in addition to those issued prior thereto by the separate companies. At the Spring term, 1860, Hunt and others, the plaintiffs in this suit, brought their action in the Wayne Circuit Court, Indiana, to enforce the lien of the first mortgage bonds, owned by them, — 462 — upon the six miles of railroad constructed in Indiana, by the Richmond and Miami railroad company. The suit was brought against Mr. Carlisle, the trustee, and the Raton and Hamilton railroad company. The company appeared and answered. But what company was it that thus appeared ? Were there, after the consolidation two Raton and Hamilton railroad companies, one in Indiana and one in Ohio ? Did the Miami company still exist, with her separate property, as a distinct corporation, but under the new name of the Raton and Hamilton railroad company ? See the Ohio and Mississippi R. R. Co. v. Wheeler, 1 Black (U. S.) Rep. 286. And was the suit against that corporation? If so, the suit was regularly brought against the old company by its new name. The President, &c. v. Jackson et al., 7 Blackf. 36. But did the consolidation merge the Richmond and Miami company in the Raton and Hamilton company, and operate to transfer the property of the former to the latter ? And was this suit against the latter company ? If so, the latter, the Raton and Hamilton company, of Ohio, was the proper defendant, and the Richmond and Miami company was not a necessary party; nor was the latter a necessary party, even if not merged, provided the consolidation operated to transfer the property of that company to the Raton and Hamilton company; Burkham v. Beaver, 17Ind. 367. We think it did, at all events, effect such transfer; see The President, &c. v. Jackson et al., supra; and that this suit was against the Ohio company; and as that company voluntarily appeared to the suit, there is no question as to the proper parties being before the Court. But we must look a little more closely into the act of consolidation of said companies. What, in legal effect, did it amount to? By the very terms of the alleged consolidation, “ the corporate name, franahises, rights, immunities and organization, of the Raton and Hamilton railroad company, shall — 463 — be preserved and remain intact.” “The name and organization of said Richmond and Miami railroad company shall ceasebut all the property, rights, & c., of the latter company, “ are hereby conveyed to ” “ the said Raton and Hamilton railroad company.” ■ It thus appears that by the act of consolidation, the exact existence of the Ohio compány is continued, while that of the Indiana company is extinguished .after all its property is transferred to the Ohio company. It comes to this: The Raton and Hamilton corporation bought out the Richmond and Miami corporation, and now owns a line of railroad, six miles of the west end of which is in the State of Indiana, and which that corporation, though a foreign one, thus owns and operates, under the authority of a law of Indiana. And the question now arises, to what extent can the Courts of Ohio exercise jurisdiction in rem. over that portion of the road owned by the Raton and Hamilton company, which lies in Indiana ? The question arises, under these circumstances. It is set up in bar of this foreclosure suit, as we will call it, of Hunt and others, that a prior suit, touching the same matter, has been instituted and prosecuted to judgment, in the Butler County Court, of Ohio, to which the Raton and Hamilton railroad company, and Mr. Carlisle, the mortgage trustee, for the benefit of Hunt and’ others, were parties, though Hunt and the others of the present plaintiffs were not. Yet it is claimed that the Ohio suit, being prior in time, draws jurisdiction of the entire subject matter, and renders it necessary for all parties in interest to seek an adjudication of their rights in the Court where it is or was pending. It will tend to clearness, perhaps, in solving this proposition, if we first ascertain what right Hunt and others had, which a Court of Justice was bound to enforce. They had a mortgage on six-miles of railroad'lying in the State of Indi — 464 — ana, and they had a right, if necessity required it, to have a judicial decree for the sale of that six miles of road, and a sale for the making of this money secured by the mortgage; that was a contract-right, which it was, perhaps, not in the power of a State to impair, Gantley’s Lessee v. Ewing, 3 How. U. S. Rep. 707; Scobey v. Gibson, 17 Ind. 572. It will not do for the company to say that that six miles of road could not be sold separately, they having purchased it after it had been mortgaged separately, subject to the mortgage. See 1 G. & H. 528, 2 id. 291. It is true that the mortgage contains a grant of power to the trustee to take possession, &c., and it is probable that he could have executed'the power. A statute of this State, enacted May 4,1852, indeed forbids a power of sale generally in mortgages, 2 G. & H. 855; but a later statute, approved June 17, 1862, 1 G. & H. 651, authorizes sales by trustees under powers in trust mortgages. See 2 G. & H. 291. Both these statutes may stand, the first, however, as modified by the second. But the power of sale in the mortgage did not exclude the right of foreclosure by judicial proceedings. It was but a cumulative remedy. At all events the creditors had a right to appeal to the Courts of the State. See the authorities cited in a note to Taber v. The Cincinnati, &c., Co., 15 Ind. on p. 467; Red. on Railways, 2 Ed. p. 572 et seq., and notes. Indeed, it is doubtful if parties can, by contract, oust the jurisdiction of the Courts. It has been said that “no cause can be found to show that a party may be restrained, by way of estoppel, from maintaining an action, although it be in violation of an executory contract,” French et al. v. The Lafayette, &c., 5 McLean 461; see 9 Ind. R. 443, Austin v. Searing, 16 N. Y. Rep. 112; Perk. Pr. 76. And, it may be observed, in a foreclosure suit upon a trust mortgage, the Court, in the exercise of its general powers, would be able to make all orders necessary to adjust the — 465 — rights of all parties in interest, in the property that might be embraced in its decree, according to the trust. It is not necessary that we should here examine the question whether with the road bed, &e., the corporation franchises can be sold. It is enough for the purposes of this case, that the party has a right to the sale at least of the real estate proper. But see Red. on Rail. 575 et seq. and our statutes supra. Also, 2 Am. L. Reg. (N. S.) p. 641. This right of Hunt and others to foreclosure and sale, the Ohio Court could not, on general principles of international law, enforce for them. The States, as between themselves, are foreign to each other, Story on Prom. Notes 323; and, although the Courts of one of these States may act in personam upon an individual, touching real property owned by him in another of the States,' even to ordering him to sell it, yet if he should refuse obedience to the order, the Court could not appoint a commissioner to make the sale in his stead, and would, in fact, be powerless to affect the sale. This has been repeatedly decided by' the Supreme Court of the United States, and is according to the general doctrine of international law, Watts v. Waddle, 6 Pet. 389; Boyce’s Executors v. Grundy, 9 Pet. 275; Caldwell v. Carrington, id. 86; Watkins v. Holman, 16 Pet. 25. See 15 How. U. S. R. 233,. and 16 id. 1; Story’s Conf. of Laws, §§ 17, 18, 550, et seq. See The New Albany, &c., R. R. Co. v. Huff, 19 Ind. 444; Sturgis v. Fay, 16 Ind. 29; Law. Wheat. Int Law pp. 280 to 286. But it is argued, and with plausibility, that the statute of Indiana, authorizing railroad companies in this State to consolidate with companies in other States, embraces in it, as an incident, the grant of jurisdiction to the courts of such other States over such consolidated companies, and their roads, as may be formed. It may be, but we do not so decide, that this State might grant jurisdiction to the courts of another State,, or, at least,, — 466 — grant the right to another State to authorize her courts to act on certain matters in this State, or to constitute a court in this State to act upon the rights and property of the citizens of such other State in this State. Nations by treaties provide for something akin to this. See Law. Wheat. Int. L. p. 224. But we do not think that the mere grant of authority to a foreign corporation to exercise its franchises and hold property, in this State can be construed as containing a grant .(of judicial jurisdiction to foreign courts over the property c®f .such corporation in this State. Such jurisdiction is not a ¿necessity. It is scarcely consistent with the rights of our ^people, or the dignity of the State. The courts of this State ¿are competent to afford all necessary relief in rendering dounestic-and in executing foreign judgments. See Aspinwall -v. Wheeler., ¡at this term. The grant could hardly be held to -extend to the matter of taxation and sale for taxes, but it would be necessary that it should in order to make the foreign jurisdiction ¡adequate to the convenience claimed for it. It is held that States will not be considered to have parted with jurisdictional power without the clearest expression of. ithe fact. The Newcastle, &c., Co. v. The Peru, &c., Co., 3 Ind. R. 464. As to the punishment of crimes, see Johns v. The State, 19 Ind. 421. But see Law. Wheat. Int. Law, p. 231. Thus far we have proceeded upon a somewhat general view ■■•of the subject. It is proper that we should notice some of ithe points made by the appellants with more particularity. Premising, however, that mauy -variances are amendable below ¡.or in this Court, and that the-evidenee is not of record, that no motion for a new trial was interposed, nor was any particular exception taken below to the ¡lengthy final decree or judgment. The first paragraph of the answer to the •original complaint denied the existence of either'the Richmond and Miami, or the Bairn aafl MamiUon railroad company; but, by the — 467 — articles of consolidation, which were filed with the complaint, and whose execution was not denied by the defendants, the existence of both these corporations, the merger of the former in the lattei’, and the continued existence of the latter, were admitted. The second, third, fourth and fifth paragraphs of the an- • swer may be noticed together. They aver that the sale of the bonds to Hunt and others was illegal, the sale of a part for one cause, and of the balance for another. 1. A part of these bonds had been put in circulation by the Richmond and Miami company, into whose hands, before maturity, they again returned, and then passed by the transfer preceding the consolidation, to the Raton and Hamilton company, by whieh they were re-issued, before due, to Hunt and others. The mortgage for their security -was still held by the trustee, Mr. Carlisle. As those bonds were commercial paper, and passed by delivery, we do not see why, under the powers and property possessed by the Raton and Hamilton company, by virtue of the consolidation and preceding conveyance, the re-issue was not legal. Story on Prom. Notes, § 180. Perhaps the company, having received the money, is estopped. Red. on Rail., 1 Ed., p. 575, § 11. 2. A part of those bonds were on pledge to Hunt for a debt in which it is claimed usurious interest was included, and the Raton and Hamilton company, after the consolidation, negotiated them to Hunt absolutely in discharge of the debt. Now, as the statute authorized the company to dispose of the bonds, at such rates as might be agreed upon, -we do not think that facts are made to appear in this case which will authorize this Court, over the judgment of the Court below, to hold the sale illegal on the ground of absence of power in the directors. Local Laws 1851, § 4. Other paragraphs set up the proceedings in the Butler County Court of Ohio. The pendency of a foreign suit can — 468 — not be pleaded, even in a transitory action, in bar of a suit for tbe same cause in this State. Cook v. Litchfield, 5 Sandf. R. 330; DeArmond v. Bohn, 12 Ind. 607, and cases cited. Nor can a final judgment in any Court be pleaded unless it embraces, in comtemplation of law, an adjudication upon tbe matter in controversy in tbe second suit. Kirkpatrick v. Stingley, 2 Ind. 269. J. L. Miner, Bielde $ Burchenal, for the appellant. J. S. Newman, J. F. Kibbey and J. P. Siddall, for tbe appellees. In tbe ease at bar, aside from what has been said as to the jurisdiction of tbe Ohio Court, tbe judgment in that Court did not purport to make any decree touching tbe foreclosure of tbe mortgage of Hunt and others upon, and tbe sale of tbe six miles of railroad in Indiana. ? Upon another point we may simply observe, that, where a note is payable at a particular place, it is not necessary to allege, in a suit against tbe maker, a demand of payment at. that place, before suit is brought; but if tbe maker on tbe trial proves that tbe money was at the place, ready to be applied in payment when tbe note fell due, he will not be subject to costs. The Indiana and Illinois R. R. Co. v. Davis, [ante 6.] As we find no error in tbe original judgment, it is not necessary that we should examine tbe suits for review. Per Curiam. Tbe judgment below is affirmed, with costs.