Central Trust Co. of New York v. Georgia Pac. Ry. Co.

NEWMAN, District Judge. The able and complete report of the special master renders unnecessary any elaborate discussion of this case in disposing of the exceptions filed by the interveners to the report. I am satisfied that, if the interveners had any lien at all, it is not more extensive than that stated by the special master; that is, upon the work done and improvements made by these contractors. It was stated in the argument for the interveners that the special master did not give a lien upon the embankment thrown up and constructed by the contractors, but this is not sustained by an examination of his report. If it was, I should differ with him as to that, because it seems to me clear that the embankment is as much a part of the improvement made by the contractors to the railroad as is the woodwork, masonry, etc. Construing the report in this way, or modifying it, if necessary, so as to give it this effect, I would make that the limit as to the property of the defendant upon which a lien would be given having preference over the bondholders. The third paragraph of the intervention in this case is as follows : “That said E. M. & J. M. Brooks commenced said work about the 23d day of June, 1888, and they and their subcontractors worked from that day till the 14th 'or 15th day of November, 1888, under said written contract, and did a very large proportion of the woodwork, earthwork, clearing, and grubbing upon said sections 40 to 50, inclusive, upon said railway, and furnished a large amount of material for the woodwork thereof. That, for a very large portion of said work and material, said company failed and refused to i>ay, and there is still due the petitioners herein a large balance for said work and material.” So, it seems that interveners claim to have done only a “large proportion” of the work on sections 40 to 50, inclusive. This complicates the matter, but, even if they did the entire work on these sections, there is no evidence whatever as to the proportionate value of that part of the road on which they worked, to the whole road in Mississippi; nor is there any evidence, if we consider the part of the road on which they worked alone, as to the proportion their work bears to the aggregate value of the property as it stood after the work was done, — that is, the right of way with this work on it; nor is there any evidence as to the proportion these contractors’ work bore to the railroad when completed, when the cross-ties and rails were added. Some evidence of this sort is absolutely necessary to the determination of the case, assuming them to have such superior lien as the special master finds. Of course, the work done by them cannot be severed physically from the other part of the road. Necessarily, therefore, there must be proof of the kind suggested to enable the court to make an intelligent disposition of the matter, or to render' any proper decree in favor of these interveners. There was an agreement by counsel for the defendants that the facts set out in the intervention were true. It is claimed that by this agreement certain admissions were made as to the value of the work done and the improvement made on the road by the interveners. It is denied, on the other hand, that the agreement goes to the extent claimed. The special master, before whom this agreement was made, [397] scorns to be doubtful as to its extent and effect. But, even if it be given the full effect contended lor by the interveners, it does not relieve the difficulty which has been mentioned as to the relative value of the improvement made and the remainder of the road. In the third finding by the special master, he says: “The proof (loos not show what work, improvements, or erections the interveners did on the line of road covered by iheir contract with sufficient detail or certainty of value to authorize any finding in their favor for any particular amount; and therefore the special master is forced to find against their claim as presented and proven in the proceedings in this ease.” Approving this view of the case taken by the special master, I must, for the reason he gives, as well as for the reasons above stated, concur with him in the final conclusions reached in (lie report. As the for ('going view of the case controls it adversely to the interveners, it is unnecessary for me to pass upon the question as to whether or not the interveners have any lien whatever superior to that of the bondholders secured by the trust deed. It has been a question of grave doubt with me, since the case was first presented here, as to whether these interveners have had any such preference over the bonds. It would be unnecessary to allude to this matter at all except that: I do not wish to be understood as deciding that question. I only hold 1hat, if a lieu exists, it dees not go beyond that allowed by the special master, and that there is no evidence by winch a lien of that kind can be given any practical effect in favor of the interveners. Counsel for the interveners, during the argument of the case, suggested their desire to amend, and to apply for leave to offer further evidence, in the event the court should differ with them. For this reason, no order overruling (he exceptions and confirming the report will he entered until they may have the opportunity which they desire, at an early date, to make their motion, and have it determined. On Application of Interveners for Leave to File a Supplemental Bill. (April 10, 1807.) At the stage of this case indicated hv the closing paragraph of the former opinion rendered herein, on the 3d day of December, 189(5, interveners’ counsel came before the court, and asked leave to file a supplemental hill, or petition in the nature of a supplemental bill, malting a new question in the case, and to set up new facts which they did not know until recently, notwithstanding the exercise of what: they claim to he due diligence on their part. It has been assumed all along in this case that the mortgage with which the interveners were contending as to priority was properly admitted to record in (.lie various counties of Mississippi in which its record was material. They now desire by their supplemental bill to make the question that the mortgage was not properly recorded, and did not operate as constructive notice, for the reason that the copy, instead of the original mortgage, was admitted to record in each of these counties. On this question of the record of a copy of a mortgage, instead of the original, on the county records kept for that purpose, the authorities seem tp he unanimous, and to the effect that such record is not [398] good as constructive notice. To that effect, see Blight v. Banks, 6 T. B. Mon. 192; Lewis v. Baird, 3 McLean, 56, Fed. Cas. No. 8,316; St. John v. Conger, 40 Ill. 535; Lund v. Rice, 9 Minn. 230 (Gil. 215); Marsden v. Cornell, 62 N. Y. 215; and Stevens v. Brown, 3 Vt. 420. An extract from the case of Porter v. Dement, 35 Ill. 478, will sufficiently give the view taken by the courts of this question, and the reasons for the same: “Tbe original mortgage is required to be recorded in the recorder’s office, and it is the duty of the recorder to correctly transcribe the same. To do this, be must have the original before him. The law has made no provision for authenticating to the recorder a copy of such mortgage. He has no authority^ to transcribe a supposed copy of such an instrument on the records of his office. He is not responsible for the correctness of any such transcript. A copy or duplicate mortgage was not, and does not appear to have been, acknowledged as the law requires, and for that reason is invalid as an original mortgage. The justice has no authority to certify that it was a copy. A certificate of the mortgagor or of the chairman of the board of supervisors, or a letter from an acquaintance, would have been as effectual to authenticate a copy of the mortgage as the certificate of the justice. The recorder did not know whether the copy was a correct one or not. He had no authority to record it, and, when transcribed, it would appear /to the world as a transcript of a paper which some estimable gentleman supposed to be a copy of the mortgage. We thirds this is not such a recording of the original mortgage as the statute requires.” In response to the rule to show cause why the interveners should not be allowed to file their supplemental bill, the defendant brings into court the original mortgage, with entries thereon of its filing and record in each of the counties material here, giving the day and the hour of such filing. In addition to that, they produce the affidavit of one Robert R. Brown, who testifies that he, in person, carried the original mortgage to each of the counties through which the road ran in Georgia, Alabama, and Mississippi, and that he filed the original mortgage with the several clerks, and that the entries of the clerks thereon were made in his presence. Some affidavits are produced by the interveners which tend to show, and indeed, I think, do show, together with the other apparent facts in the case, that while the original mortgage was filed for record, and the entry of record made.thereon, the actual work of entering the mortgage on the record book was done from a printed copy of the original mortgage. None of the cases above cited have in them the facts presented for determination in this case. In each of those cases it was the clear-cut question of the record of a copy of a deed o'r mortgage, pure and simple. In one of the affidavits presented here, it appears that the clerk compared the printed copy of the mortgage presented to him with the original mortgage sufficiently to satisfy himself that it was a true copy; and this, it would probably be fair to assume, in view of the usual presumption as to the proper discharge of official duty in the absence of evidence to the contrary, was done by all the clerks who made these entries on the original mortgage. I have given very careful consideration to the question presented on the application to reopen this case by the filing of a supplemental bill. The question involved has not, so far as I am aware, ever been presented to the courts of this state in any shape for determination. The facts- brought out by the- answer to the rule to show cause are not [399] seriously questioned, except with the qualification I have suggested as to the actual work of record having been done from a copy. The transaction, I think, mast be taken to have oc'curml in about the way that has been stated. In this view, and determining the case upon this state of facts, and conceding the law to be as announced in the decisions referred to, I do not believe that in this case it is the record of a copy of the instrument, but it must be held to be the filing for record and the record of the original in a manner satisfactory to the clerk, and reasonably necessary under the circumstances, considering (he character of the mortgage and the property it covers, and sufficient in law. To allow this case to be reopened, and the interveners to take additional testimony, and to go to further expense, would he wrong, when I am satisfied that they can obtain no final benefit thereby. If there was any substantial dispute as to the real facts in the matter, notwithstanding the lapse of time and the long trial in this case upon other issues, 1 might feel it my duty to allow the interveners to file their supplemental hill, and he further heard; hut in view of what must he recognized as the truth of the transaction, and, indeed, what I understand to be recognized by counsel on both sides, the application io file their supplemental hill must be denied. Another ground has been urged for reopening this case, and that is to take additional evidence on which to base a recovery in accordance with the views expressed by the special master in his report, and which was concurred in by the court. To allow the case to be reopened for this purpose would violate the precedent established in this court, and cannot be allowed. Clyde v. Railroad Co., 59 Fed. 394; Central Trust Co. v. Richmond & D. R. Co., 69 Fed. 761.