Louisville Trust Co. v. Louisville, New Albany & Chicago Railway Co.

Citations

• 174 U.S. 674
• 19 S. Ct. 827
• 43 L. Ed. 1130
• 1899 U.S. LEXIS 1527

Syllabus

<p>The New Albany Railway Company, whose road was in several States, guaranteed bonds of a Kentucky railway company to a large amount. It attempted by suit to avoid this guarantee as ultra vires. Its contention was sustained by the Circuit Court, but that decree was reversed by the Circuit Court of Appeals, and this court has sustained that decision. After the decision of the Circuit Court of Appeals, Mills, a creditor of the company, commenced suit in the Circuit Court of the United States. The company appeared and confessed judgment, and execution was issued and returned unsatisfied. Thereupon the creditor filed a bill praying for the appointment of a receiver for the entire road, and that the court would administer the trust fund, and order the road sold, and the proceeds from the sale divided among the different creditors according to their .priority. The New Albany Company admitted the allegations of the bill, and interposed no objections, whereupon a receiver was appointed. These proceedings took place on the same day. Subsequently proceedings were commenced at different times for the foreclosure of different mortgages, all of which suits were consolidated. Then the Trust Company, as holder of some of the guaranteed bonds, intervened. Then a decree of foreclosure was entered, and a sale ordered, made and confirmed. Then the Trust Company filed another intervening petition, charging that Mills’ proceedings had been procured by the New Albany Company for the purpose of hindering and delaying the general, or unsecured creditors in the enforcement of their debts, and praying that the decree of foreclosure might be set aside, and other prayers. This was denied, and a sale was ordered. An appeal by the Trust Company to the Circuit Court of Appeals resulted in the affirmation of the decree below. The proceedings being brought here on certiorari, it is Held that, under the circumstances as presented by this record, there was error; that the charge of collusion was one