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where the court held that the amended act applied to all cars regularly used on any railroad engaged in interstate commerce, not only while actually in use in such commerce, but at all times when in use on such road. The language used by the court is as follows:
"It is manifest that the purpose in view was the regulation of commerce between the states by requiring common carriers to conform to certain require. ments regarded as essential to the safety of employés and passengers. To sustain the demurrer would be to hold that it is beyond the power of Congress to control the instrumentalities through which interstate commerce may be carried on.
It is the carrier which the acts seek to regulate, and it is by this method that Congress has undertaken to bring the matter under control."
While I am aware that no determination of this great question will be generally satisfactory save that of the Supreme Court, I have not felt at liberty to await the decision of that great tribunal, and thus avoid the responsibility of making my own determination of the pending case. I am clear as to the constitutionality of this measure; but if I were in doubt, I would uphold the law. It is a part of that splendid practical philosophy of government which is intended for the betterment of mankind. The statesmen who dealt with this question did not deal with abstractions. They were not enchanted with those flowers and blossoms which are sometimes woven into garlands to crown that divinity—the sovereign state. Like Lord Bacon in the Novum Organum and other works written to ameliorate the hardships of life, they were after "fruit." It is pardonable perhaps to declare that no court has gone farther than this in the maintenance of those “state rights” which are practical and valuable. The laws of the state against the sale of intoxicating liquors within three miles of a country church or school house, to authorize municipal corporations to forbid the sale, forbidding marriage between persons of the negro and white races, the homestead and exemption laws, the laws forbidding the consolidation of competing lines of railway, in violation of the state Constitution and in violation of the national law against "combinations in restraint of trade," and other state laws, have been steadily and sincerely upheld. Here, however, no right proper to the state, or any of its instrumentalities of government, is drawn in question. Disquisitions upon profitless, inutile, or imaginary "reserved rights" have never been charming to the writer, Such structures of ratiocinationand I again borrow from Bacon-are "like the ox of Prometheus, a sleek, well-shaped hide, stuffed with rubbish, goodly to look at, but containing nothing to eat."
The law itself deserves the approbation of the entire country. Its incentive to carefulness on the part of those who control railways will be immeasurable. It will bring to many an honest, fearless heart, the consciousness that he and his loved ones are insured against the folly and negligence of his fellows, whom he cannot control. Had it been of force in the past, thousands of our countrymen who are sleeping in untimely and tragic graves might now be leading useful lives, and many additional thousands who now spend the interval of life which remains to them in the mortification of mutilation, and in its incurable suffering, might now be happy and well. Surely, at
a period when every day brings its story of crashing and murderous collisions, of derailed and shattered trains, the long catalogue of the slain, the mangled, and dismembered, such efforts on the part of government to extend its protecting care around its people employed in its miglitiest interest should not be lightly discredited. The philanthropy and statesmanship which prompted it are not undeserving of such a eulogium as that pronounced by Macaulay on the philosophy of Bacon:
“It has lengthened life. It has mitigated pain. It has extinguished diseases. It has increased the fertility of the soil. It has given new securities to the mariner. It has furnished new arms to the warrior. It has spanned great rivers and estuaries with bridges of form unknown to our fathers. It has guided the thunderbolt innocuously from heaven to earth. It has lighted up the night with the splendor of the day. It has extended the range of the human vision. It has multiplied the power of the human muscles. It has accelerated motion. It bas annihilated distance. It bas facilitated intercourse, correspondence, all friendly offices, all dispatch of business. It has enabled man to descend to the depths of the sea, to soar into the air, to penetrate se curely into the noxious recesses of the earth.
These are but a part of its fruits, and of its first fruits. For it is a philosophy which never rests, which has never attained, which is never perfect. Its law is progress. The point, which yesterday was invisible, is its goal today, and will be its starting post tomorrow."
The demurrer on all grounds is overruled.
HORN v. PERE MARQUETTE R. CO. et al.
(Circuit Court, E. D. Michigan, S. D. February 11, 1907.) 1. RECEIVERS-REMEDIES-SUMMARY PROCEEDING.
A receiver may proceed summarily by petition for a rule to show cause in the court by which he was appointed to require one not a party to the suit to pay over money belonging to the receivership wbich has come into possession of the respondent since the appointinent of the receiver, and which is retained in defiance of the court's order sequestering the property and funds of the defendant, although the respondent claims a right to or lien upon the fund; his remedy in such case being by a petition in intervention setting up his claim. The rule would be otherwise, however, with respect to funds in the hands of respondent at the time the receiver was appointed, and which he claims adversely, which could only be recovered by the receiver by a plenary suit.
[Ed. Note.--For cases in point, see Cent. Dig. vol. 42, Receivers, $ 129.) 2. Courts-JURISDICTION OF FEDERAL COURTS--DISTRICT OF SUIT.
Where a defendant corporation, sued in a federal court in a district of which neither complainant nor any defendant is an inhabitant, waives any objection to the place of suit by appearing and joining in complainant's prayer for a receiver, such waiver is conclusive upon third persons not parties, who cannot claim that t appointment of the receiver was without jurisdiction; there being the requisite diversity of citizenship to confer constitutional jurisdiction on the court.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 13, Courts, $ 815.
Waiver of right as to district in which suit may be brought, see note
to Memphis Sav. Bank v. Houchens, 52 C. C. A. 192.) 3. SAME-Suit of LOCAL NATURE-SCOPE OF RECEIVERSHIP.
A suit by a creditor of a railroad company to have its property, situated in different federal districts of the same state, administered for the benefit of all creditors, is one of a local nature which, under Rev. St.
| 742 (U. S. Comp..St. 1901, p. 588], may be brought in either of such districts, and the appointment of a receiver therein is an equitable attachment of all property of the defendant within the state.
(Ed. Note. For cases in point, see Cent. Dig. vol. 13, Courts, $ 809.) 4. RECEIVERS—TITLE TO PROPERTY-DATE OF ATTACHMENT.
The qualified title of a receiver to the property he is directed to take and hold dates from the time of bis appointment, and actual seizure by bim is not necessary to prevent the attachment of rights or liens there after; and, if the order of appointment requires him to give bond, his title when so qualified relates back to the date of appointment, and cuts off all intermediate rights.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 42, Receivers, 126.) 3. CREDITORS' SUIT-QUALIFICATION OF CREDITOB TO BRING-WAIVER OF OBJEOTION.
The objection that a creditor's bill was filed by a single unsecured credItor who had no judgment, and claimed no lien, is waived and stands as though it never existed wbere the defendant voluntarily appears, confesses the debt, admits its Insolvency and joins in the prayer for a receiver, and sucb objection cannot be thereafter raised by other creditors who were not parties to the suit as brought, but are subsequently brought
in or are permitted to intervene. 6. RECEIVERS—TIME OF APPOINTMENT-ORDER MADE AT CHAMBERS.
An order appointing & receiver signed by a circuit judge at chambers in another district on presentation to him of bill and answer which have not been filed, to take effect when the pleadings and order are filed with the clerk becomes effective on such filing, any delay in transcribing the order upon the records or in the qualification of the receiver being imma
terial. 7. SAME-POWER TO APPOINT-JUDGE AT CHAMBERS.
A federal judge, in the exercise of his general equity powers as a chancellor, and those prescribed by Rev. St. 8 638 (U. S. Comp. St. 1901, p. 519), and equity rule 3, has authority at chambers to make an order appointing a receiver in a pending cause, or on a bill and an answer by the defendant joining in the prayer for such appointment.
[Ed. Note.--For cases in point, see Cent. Dig. vol. 42, Receivers, 8 38;
vol. 29, Judges, § 126.) & JUDGES—CIRCUIT JUDGES-CHAMBERS-TERRITORIAL LIMIT OF JURISDICTION.
A circuit judge of the United States may do chambers business at any place within his circuit without regard to the particular district in which the cause is pending.
[Ed. Note.—For cases in point, see Cent. Dig. vol. 29, Judges, 88 109,
110.) 0. RECEIVERS-EFFECT OF APPOINTMENT-LIEN OF BANK ON DEPOSITS RECEIVED
A railroad company kept a general account, subject to check, in a bank, which also beld notes of the company payable on demand. From time to time the treasurer and agents of the company remitted money to the bank for deposit in such account, and certain of such remittances were received by the bank after the appointment of a receiver for the property of the company in insolvency proceedings. Held, that such sums were property of the receiver, and the bank acquired no lien thereon which entitled it to apply them on its notes.
(Ed. Note.-For cases in point, see Cent. Dig. vol. 42, Receivers, § 117.] In Equity. In re intervening petition of Judson Harmon, receiver, and answer of the State Savings Bank.
Edward Colston and F. W. Stevens, for receiver.
LURTON, Circuit Judge. At the outset I must make my acknowledgments to the learned counsel who have appeared in this case.
Their assistance in investigating the numerous and interesting questions which are herein discussed has been unusually profitable to me, and I trust will tend to the better understanding of several mooted questions which concern matters of interest touching the appointment and authority of receivers.
The matters now to be considered arise upon an intervening petition filed by Judson Harmon, as receiver of the Pere Marquette Railroad Company, and the answer of the State Savings Bank, a banking corporation of the state of Michigan, carrying on a general banking business at Detroit. The petition, in substance, avers that the petitioner had been appointed receiver of the Pere Marquette Railroad Company, under a bill filed at Grand Rapids, in the Western District of Michigan, at 9:30 o'clock a. m., December 5, 1905, and also under an ancillary bill filed at Detroit, in the Eastern District of Michigan, on the 8th of December, 1905. The contention of the petitioner is that, as to the property and assets of the Pere Marquette Railroad Company within both Michigan Districts, the appointment of the petitioner as receiver became effective at least from 9:30 o'clock a. m., December 5, 1905, that being the time of the filing of the original bill at Grand Rapids; petitioner having given bond simultaneously with his appointment. By this order the petitioner was appointed receiver of the entire Pere Marquette System of railroads, its rolling stock, property and assets of every kind wherever situated, including its books of accounts, bills receivable, choses in action, bonds, notes, stocks, moneys and valuables, and directed to take immediate possession of the same, and to operate the said railway, and hold possession of all its said properties for the benefit of whomsoever might be entitled, and subject to the orders and direction of the court. By the same order, the corporation, and all its agents and employés, "and all other persons,” were required to turn over and deliver to the said receiver all property held by them for the said company upon demand of the said receiver, and all said officers and agents, and all other persons were enjoined and restrained from interfering in any way with his possession or management of same.
The petition then avers that prior to the appointment of the receiver the Pere Marquette Railroad Company had kept an ordinary deposit account with the defendant bank against which it was accustomed to check; that from time to time the agents of said company, under its direction, made deposits of moneys received in the conduct of its business at many points within the state, and that the treasurer of said company, whose office was in Cincinnati, was also accustomed to transmit funds to the defendant bank subject to check. At the close of business on December 4, 1905, there was on deposit to the general credit of the said company $29,166.01. It is then averred that, after petitioner's appointment took effect, deposits sent by express to said bank were received as follows: December 5, 1905, remittances from agents, $2,625.88; December 5, 1905, remittances from treasurer, $29,722.63 ; December 6, 1905, remittances from agents, $4,811.46; December 7, 1905, remittances from agents, $3,272.21; December 8, 1905, remittances from agents, $2,892.21. At the date of this appointment the said railroad company was indebteded to the said bank by two notes, dated May 1, 1905, each for the sum of $50,000, and payable on demand. It is then averred that after the said appointment had been made, and with knowledge of the fact, the said bank applied the said sums so deposited to the credit of said railroad, to the payment of said obligations, and, though requested so to do, has failed and refused to pay such funds over to petitioner, thereby disobeying the order and direction of the court and in obstruction to the receiver's duty and obligation, and has thereby committed a contempt. The prayer was for a rule requiring said bank to show cause why it should not be required to pay into the hands of the petitioner the funds so withheld, and why it should not be punished for contempt. The bank so made a defendant, answered and set up its right to apply such deposits in payment of the debt of the railroad company upon the demand notes so held by it, and that it had made this application as the funds came in, and with knowledge of the receivership.
1. Objection is made to the right of the receiver to proceed by an intervening petition against the defendant, and, it is said, that he should have sued at law or some other independent suit. This objection, if tenable at all, should have been made by plea, demurrer, or motion. It was not. The defendant came in and answered to the merits. So far as the petition seeks to recover funds actually in the hands of the defendants at date of his appointment, against which a lien in good faith is asserted, the receiver could not have proceeded summarily if objection had been taken in time. The bank might well say:
“As to that fund, I claim adversely and demand that you proceed in the ordinary way to try the question whether my prior possession can be rightfully disturbed by an order in a case to which I was not a party." Wheaton F. Daily Telegraph.Co., 124 Fed, 61, 59 C. C. A. 427.
But as to so much of this fund as was actually in possession of the defendant bank at the close of business on December 4, 1905, the receiver has conceded the right of the bank to apply it upon the indebtedness of the railroad company to the bank. As to the deposits made after the appointment of the receiver, a very different question arises. If, as claimed, the deposits made on December 5, 1905, were made after they had been sequestrated or equitably seized, the appropriation by the bank to the payment of its own claim is a claim to hold and appropriate same in defiance of the receiver and in disobedience of the order placing him in possession of all the assets of the railroad company. The right to maintain such an intervening petition does not depend upon whether some actual manual possession by the receiver has been disturbed. If the funds in question did not come into the actual possession of the bank prior to the appointment of the receiver, the conduct of the bank in preventing the receiver from obtaining the possession of that which he was appointed to receive is a defiance of the court's order. In such circumstances the bank should have intervened interesse suo and set up its right, for the possession of the receiver is but the possession of those having a right thereto, and would not defeat any title, claim, or right which it might have in the fund which it thus received after the receiver's title to the possession accrued. The distinction which I call attention to is noted in Vermont, etc., Co. v. Vermont Central R. R.