Woodworth v. Blair/Opinion of the Court

by Horace Gray

United States Supreme Court

112 U.S. 8

Woodworth  v.  Blair

Assuming, as the appellant contends, that her conveyance to Dobbins, and the mortgage back by him, should be considered in equity as if made to and by the railroad corporation, no ground is shown for reversing the decree below. The appellant's mortgage covered only the tract of land specifically described therein, and did not affect the title of the corporation in other lands and in so much of its road as was not laid over the land mortgaged to her. The case differs in this respect from the cases cited by her counsel, in which a mechanic's lien given by statute for work done on part of a railroad was held to extend to the whole road. Brooks v. Railway Co. 101 U.S. 443; Meyer v. Hornby, 101 U.S. 728. As a general rule, a prior mortgagee is not a necessary party to a bill to foreclose a junior mortgage, where the decree sought is only for a foreclosure of the equity of redemption from the prior mortgage, and not of the entire property or estate. Jerome v. McCarter, 94 U.S. 734. In a suit to foreclose a mortgage of the whole railroad, franchise, and property of a railroad corporation, it would often produce great delay and embarrassment to undertake to determine the validity and extent of all prior liens and incumbrances on specific parts of the corporate property before entering a final decree. The course pursued by the circuit court in the present case, dismissing the intervening petition of the appellant, without prejudice, and ordering a foreclosure by sale, subject to her mortgage, of the entire railroad and other property included in the railroad mortgages, to foreclose which the principal suit had been brought, judiciously and effectively secured the rights of all parties. The price obtained by the sale of the railroad and other property, subject to her mortgage, must have been less than if they had been sold free of that mortgage; and to order the amount of that mortgage to be paid out of the proceeds of the sale would pro tanto benefit the purchaser if the sale was carried out, or the railroad corporation in case of redemption, to the corresponding detriment of the holders of bonds secured by the railroad mortgages.

The railroad corporation, after having redeemed its property from the railroad mortgages, will hold it subject to any valid lien of the appellant, just as it did before the proceedings for foreclosure were instituted. Decree affirmed.

Notes