HOBBS v. STATE TRUST CO. et al., 68 F. 618

LARDEE, Circuit Judge, after stating the facts as above, delivered the opinion of the court.

From the record we are unable to say on what issue this cause was disposed of in the court below, but as presented in the briefs of counsel (there was no oral argument) the question here is the same as though a general demurrer for want of equity in the bill was sustained; and, farther, we notice that in the original decree sought to he reviewed in the present bill of review no question of fact was or is in dispute, and that it is practically conceded that in the original cause the facts were that the Decatur, Chesapeake & New Orleans Railway Company commenced proceedings in the probate court of Limestone county, Ala., for the condemnation of a right of way for its roadbed over and through Hobbs’ land, resulting in a jury trial, in which the jury ascertained and assessed Hobbs’ damages and compensation for such right of way at the sum of $8,196.33, ou which judgment of condemnation was rendered in conformity to the laws of the state; that thereafter, the damages and compensation so as aforesaid assessed not being paid, and the railway company notwithstanding going on with its work, Hobbs filed Ms bill in the chancery court of Limestone county, Ala., obtaining thereon a preliminary injunction restraining the railway company and its agents from taking the right of way or building the roadbed thereon till such damages had been paid, and thereupon a compromise was made between the railway company and Hobbs, in writing, whereby Hobbs -was to convey said right of way for the sum of $2,500 as his compensation and damages in the premises, the same to be paid September 15, 1890; that no part of this $2,500 having been paid, Hobbs brought the compromise before the chancery court of Limestone county, had it enforced by a decree which recognized his vendor’s lien in the sum of $2,500 and interest upon the land covered by the right of way, and ordered the same to be sold to pay said sum; and this decree not having been paid oil', the register, after legal notice, sold the right of way, with the roadbed, rails, and ties thereon, to the highest bidder for cash, at the courthouse door in Limestone county, Hobbs becoming the purchaser at the amount of such lien, interest, and costs, and taking a deed for the property from the register; and that thereafter Hobbs removed and sold the rails on such right of way for his own account.

The erroneous ruling of law complained of by the appellant Hobbs in the original decree sought to be reviewed is that the decree of the chancery court of Limestone county recognizing’ appellant’s vend- or's lien, under which, by regular proceedings, the appellant had become the purchaser and the owner of the right of way across Ms own land, was treated as absolutely null. That this ruling was erroneous as a matter of law we do not think can be disputed.

The facts, as conceded, do not show that the appellant ever actually parted with the title to the land in controversy, but do show that he opposed at every step the proceedings of the railway company to take his land without previous compensation. If, however, it be taken for granted that by the proceedings of compromise he consented to convey title upon condition that the amount of the compromise should be paid, it seems clear to us that when the amount w7as not paid he had a right to go into a court of competent jurisdiction, assert his vendor’s lien, and have the same foreclosed.

When he did this, and at the foreclosure sale became the purchaser, it appears to us that thereby he acquired a full and complete title to the land in controversy, subject to the statutory right of the railway company to redeem.

At no stage of the proceedings does it appear that the appellant Hobbs lost or waived his superior vendor’s lien on the land, so that the lien of the mortgage granted by the Decatur, Chesapeake & Hew Orleans Railway Company to the American Loan & Trust Company could attach to his prejudice, even if it is not correct to hold, in view of the whole proceedings, that in equity the appellant never parted with the title, but retained the same from the beginning.

The main argument in this court is to the effect that when the appellant, after he became the purchaser under the decree of sale on the foreclosure of the vendor’s lien, sold the rails and ties found on the right of way for his own account, he thereby did something inequitable, which precluded a court of equity from recognizing his legal title to the land in controversy.

It does not appear that he was asked to account for, or that any account was taken of, the sum realized for the sale of rails and ties, and all that can be gathered as to the amount so realized is an assertion that the sum was more than the value of the right of way. We are unable to see any force in this argument.

When the appellant became the purchaser at the foreclosure sale, he became the owner of the land and its appurtenances, and it would seem that he had the right to deal with them as he saw fit, subject only to a right to redeem under the statute of the state; but whether he had or not, it is clear to us that no liability which he may have subsequently incurred to account to the railway company for rails and ties sold or appropriated by him would operate to defeat his title to the land itself.

Counsel for appellees cites authority to the effect that before'-a bill of review can be filed the decree sought to be reviewed must be first obeyed and performed. Conceding the rule contended for, we fail to see its applicability in the present case. The decree complained of appears to have left nothing for Hobbs (now the complainant in the -bill of review) to perform, not even, so far as the record goes, adjudging costs against him.

An attack is also made upon the proceedings in the chancery court, —not that jurisdiction in that court is wholly denied, but the claim is that the proceedings were not regular, in that the amendment by which the compromise was brought before the court was improper, and the proceedings had thereunder were not in accordance with the recognized equity practice in the state of Alabama.

We take it ■that (he chancei-v court acquired jurisdiction by the bill filed lor an injunction, and that thereafter it would naturally have jurisdiction to reject, or to affirm and enforce, any compromise made by the parties therein when brought to its attention.

That, the trust company, plaintiff in the original suit, was not a party to the proceedings in the chancery court is not suggested; but, even if it were, we are inclined to. the opinion that until the title oí the railway company attached to the right of way in question the trustee under the mortgage was without interest, and therefore not a necessary party to the proceedings, to say nothing of the fact that: thq proceedings were instituted in the chancery court before (he mortgage to tin* trust company was recorded in Alabama.

The circuit court erred in dismissing the bill of review, and the decree appealed from is reversed, and the cause is remanded to the circuit court, with instructions to overrule the demurrers of the Decatur. Chesapeake & New Orleans Railway Company and of (he State Trust Company, and thereafter proceed in conformity with the views expressed herein and as equity may require.