sonal property and the canal, to secure its bonds in the sum of distribution accordingly. Upon this bill a motion was made to $500,000.

July 1, 1868, it executed a mortgage, of which Lucien Birdseye is trustee, upon other lands and upon the canal and the personal property, to secure an additional issue of bonds in the sum of $500,000.

July 1, 1870, it executed a mortgage, of which Thomas N. McCarter is trustee, upon all the property covered by the two other mortgages, to secure a further issue of its bonds in the amount of $1,250,000.

May 1, 1871, it executed a mortgage to the Union Trust companý of New York, upon the property covered by the several other mortgages, and some additional property.

stay the proceedings in the foreclosure cases, which was granted. Whether this bill should be entertained, and the rights of all the parties interested in the several mortgages named should be administered in this suit, and in the meantime the foreclosure suits permanently stayed, or whether the equities should be worked out in the foreclosure suits-in one or all of them—was the general subject discussed upon the argument and submitted for decision of the court.

The motion for stay was originally made before the circuit judge, who then expressed a strong preference for the amendment of the pleadings in the Sutherland suit, in which he intimated an opinion that all the rights of the parties could be effectually secured. Full reference was made by his honor to the written judgment delivered by him some months since, when the stay of proceed

May 25, 1872, a bill was filed in Sutherland's name, in this court, to foreclose his mortgage, to which the company, Birdseye and Frost (McCarter's predecessor in the trust) and the Union|ings was originally granted. That opinion announced fully all Trust company, were made parties defendant. The defendants all appeared and answered.

June 13, 1872, a receiver was appointed in the Sutherland case, of the entire property of the company, and authorized to create an indebtedness of $500,000, to be a first lien on all the property. This was by consent of some, and without opposition from any of

the defendants.

July 3, 1872, a bill was filed in this court, in McCarter's name (he having been duly appointed Frost's successor), to foreclose his mortgage. The mortgagor and the Union Trust company of New York were made parties.

July 5, 1872, a bill was filed in this court, in Birdseye's name, to foreclose his mortgage. The mortgagor, McCarter, and the Union Trust company of New York were made parties.

August 27, 1872, the mortgagor was adjudicated bankrupt. December 3, 1872, George Jerome and Fernando C. Beaman were duly appointed assignees, and by supplemental bills were made parties to said several foreclosure suits.

The entire property was then in the custody of the court, through its receiver in the Sutherland case, when the subsequent bills were filed, without leave of the court being asked or obtained. Subsequently the Union Trust company of New York filed its bill to foreclose its mortgage in the bankruptcy court.

In reference to the amount due upon each of these successive securities, and more especially in reference to what the certificates of the receiver cover, whether all or a part only of the property of the corporation, the widest differences exist at the bar.

The assignees, after their appointment, appeared in the Sutherland, the Birdseye and the McCarter suits, without setting up in either the pendency of the others, though the pendency of the Sutherland suit is expressly set up in the bills of complaint in both the Birdseye and McCarter cases, and in each it is stated that the complainant therein is made defendant in the Sutherland case, and that a receiver of the property had been appointed.

In these circumstances it was insisted by the assignees that neither Birdseye nor McCarter (being subsequent encumbrancers and alreatly impleaded in the Sutherland suit, they might have had their liens adjusted, and the property which they covered sold) had a right to file either of the subsequent bills without leave of court, and thus necessitate a triple litigation. They insist further that as doubts exist in reference to the amount of the prior liens, which was put in issue by the pleadings, and as to the property which the dominant one covered, it was impossible to make a proper decree under the Birdseye or McCarter bills. As the facts upon which these equities rested were not contained in the answers and could not be administered as the pleadings in the fore-, closure cases then stood, an original bill was filed by the assignees in this court making Sutherland, Birdseye, McCarter and the Union Trust company parties, which had for its object a sale of the mortgaged premises free of liens and an ascertainment of the rights of the various parties interested in the proceeds, and their

opinions expressed in this. It emphatically declared the gross impropriety of suffering Birdseye or McCarter to sell the equity of redemption while prior liens existed, the extent of which was dis puted both in amount and as to the property which they covered A strong preference was then expressed for continuing the entire working of these causes in the hands of the mortgagees, who seemed to have interests so much more extensive than any other parties upon the record. The high character of their equities and the obligation of great diligence to speed the cause on the part of the assignees, were therein fully recognized.

On the point of whether all the prior mortgagees might have been made' parties to the McCarter bill, his honor said: "We deem it entirely clear that the prior encumbrancers, under the circumstances of this case, are necessary parties to the McCarter bill if it were proper, as it was not, to file it at all after the property which it seeks to sell was already in custodia legis."

To sustain the right to sell the equity of redemption without making prior lien holders parties and ascertaining their rights, the counsel for the mortgagees, he said, had referred to the following and numerous other cases: 2 Barb. Ch. Pr. 174; 1 Dan. Ch. Pr. 373:2 Spence Eq. Jur. 605, 704; Ld. Langdale, 6 Bev. 557; Hobart v. Abott, 2 P. Wms. 643; Williamson v. Probasco, 4 Halst. Ch. 571 : Gibson v. McCormick, 10 Gill & J. 65, 109. "We have,' he said, "examined them all. They show only that subsequent encumbrancers must be parties. There is nowhere an intimation that prior ones may not and should not be impleaded whenever it is necessary to ascertain the amount which is due to them, or there is a substantial doubt as to the property covered by their liens. A mortgagor who insists that he has paid a prior encumbrance cannot be subjected to the injury of a sale while this question is in dispute."

In the 11 Wheaton, 304, Finley v. Bank of United States, MARSHALL, C. J., says: "It cannot be doubted that Coleman (the prio mortgagee) ought regularly to have been a party defendant, and, | that had the existence of his mortgage been known to the court, no decrees ought to have been pronounced in the cause until he was introduced into it."

This was not understood as declaratory of a universal rule. It is correctly limited in 14 Howard, 29, Hagan v. Walker et al., where CURTIS, J., reviews the authorities, and lays down the doctrine as announced by this court some months since at the first hearing of the motion.

He says: "On the other hand, there are cases in which it has been declared that all encumbrancers are necessary parties Many are collected in Story's Eq. Pl. 178. But we consider the true rule to be that, where it is the object of a bill to procure a sale of the land, and the prior encumbrancer holds the legal title and his debt is payable, it is proper to make him a party in order that a sale may be made of the whole title. In this sense and for this purpose he may be correctly said to be a necessary party, that is, necessary to such a decree. But it is in the power of the court

bill to redeem. In England the court does not decree a sale of mortgaged premises, but merely allows the second encumbrancer to file a bill to redeem from the first encumbrance, and that the junior encumbrancer may redeem both of the prior ones or be foreclosed. And the complainant there is in all cases required to of fer to redeem the first encumbrance. But where the puisne creditor has the right to a sale of the estate to satisfy his debt after applying so much of the proceeds of the sale as may be necessary to pay the debt and costs of the prior encumbrancer, he is not required to offer to pay the first encumbrance. All the prior encumbrancer has a right to ask, even when he is in possession under his encumbrance, is that he shall not be subjected to useless

all. He represents just as fully those of the assignees, of the shareholders, and the creditors as the prior lien holders; and if a sale should be ordered which was in hostility to and would dispose of the rights of those interested in the equity of redemption, this sale would be directly in hostility to the rights of the receiver who holds possession for them. To illustrate the completeness of the jurisdiction in the Sutherland suit, and how the rights of all parties might be adjusted therein, cases, 24 Howard, 450, Freeman v. Howe; 16 Wall. 203, Davis v. Gray; 10 Wall. 327, Jones v. Andrews, and others, were referred to and commented upon. They show that suits in reference to property in custodia legis are deemed auxiliary only to the principal cases. His honor said it was wholly unnecessary for Sutherland in any costs, when the proceeds of the sale will not probably be sufficient way to notice the trustee, McCarter. He had become trustee to pay the amount of his debt with interest and the costs of foreclosure." pendente lite. It seemed extravagant to say that, while his predecessor, Frost, was impleaded in the Sutherland suit and bound In Hagan v. Walker et al, 14 Howard, 29, Justice CURTIS, after by the order granting a receiver, his successor could file an very fully considering the subject, says: The court will exercise original bill without leave of court to sell the equity of redemp-its discretion whether to sell free from or subject to prior encumtion without impleading the prior parties. Story's Eq. Pl. 156. Generally speaking, an assignee pendente lite need not be made a party to a bill, or be brought before the court; for every person purchasing pendente lite is treated as a purchaser with notice, and is subject to all the equities of the persons under whom he claims in privity. And it would make no difference whether the assignee pendente lite be the claimant of a legal or of an equitable interest, or whether he be the assignee of the plaintiffs or the defendants. Still, however, it is often important to bring such assignee before the court as a party by a supplementary bill, in order to take away a cloud hanging over the title, or to compel the assignee to do some act, or to join in some conveyance. So that such assignee, although not a necessary party, may at the same time be a proper party at the election of the plaintiff. And an assignee after the bill was filed, but before subpoena was served, has been held to be a necessary party."

It is only in cases where the complainant parts with his interest and where defendant's rights are transferred by death or by operation of law, as by bankruptcy or the insolvent laws, that a transfer pendente lite need be noticed by litigants in court.

His honor said that among the positions taken by mortgagees' counsel which surprised him most, and to sustain which he had found the least learning, whether in judgments or elementary books, was that there exists no power in an American court of chancery to sell property covered by successive mortgages free from encumbrances, upon bills filed by junior mortgagees, by judgment creditors, or by the owner of the equity of redemption. It had been argued that Sutherland and Birdseye were not proper parties to the suit by McCarter, because if they were brought in, there was no power on the part of the court to make any other decree than the mere one to sell this vast estate in mass, subject to prior liens which were uncertain in amount and extent. The broad ground had been taken that prior encumbrancers were not necessary parties, for the reason that there was no power to sell free from encumbrances. This power, he said, is fully conceded in Hancock v. Hancock, 22 N. Y., 568; in Gibson v. McCormick, 10 Gill & Johnson, 65. The latter quite fully asserts and justifies the rule. It cites Elliott v. Pell, 1 Paige, 263, and Chamley v. Lord Dunsaney et al., 2 Sch. & Lef., 710 and 718, as sustaining such right. The only doubt is where a prior mortgagee opposes the sale because his claim is not due, or he would be injured by it; but, as before said in these cases, they all demand a sale. In Vanderkemp v. Shelton, II Paige, 28, a bill was filed to foreclose a junior mortgage and the prior mortgagee was made a party. The chancellor says:

"The complainant's bill is properly framed for that purpose; as this is a bill for the foreclosure and sale of the equity of redemption in the mortgaged premises to satisfy the several encumbrances thereon according to their respective priorities, and is not a mere

brances.

The power exercised by the court of bankruptcy, to sell free from encumbrances, is but an instance of a similar one familiar to the court of chancery. We should wholly, irrespective of the bankrupt law, if the facts ultimately presented warranted it, sell the entire estate free from encumbrances; it may appear that in no other way can the various interests in the equity of redemp tion be in the slightest degree protected.

Respecting the power of the court in exercising the functions conferred upon it by the bankrupt act, when these functions should be called into operation by proper proceedings on the part of the assignees, his honor said:

"The reading of the statute which has been given by the learned counsel for the mortgagees comes too late. The numerous instances in which the district courts, originally by summary proceeding, and latterly, since that has been pronounced to be irregular, by bill, have sold property free from encumbrances, remitting lien holders to the fund in court, would upon every rule of propriety constrain this court to consider it as settled law, until a superior tribunal shall pronounce the practice unlawful." The In re Sacchi, 10 Blatchford, 29; Alabama and Florida R. R. Co., following cases are some only of the instances of its exercise: B. R. 19; in re Stewart, 1 B. R. 42; Foster v. Ames, 2 B. R. 147 B. R. 100; in re Kirtland, 10 Blatchford, 515; in re Salmons, 2 in re Barrow, 1 B. R. 125; in re Rahley, 4 B. R. 124; in re Columbian Metal Works, 3 B. R. 18; in re N. Y. Kerosene Oil Co., 3 B. R. 31; in re Schnepf, 1 B. R. (Supp.) 41; Markson v. Keavey, 4 B. R. 165; in re McClellan, 1 B. R. 91; Davis v. Anderson, 6 B. R. 145; in re Mebane, 3 B. R. 91; Houston v. City B'k N. O., 6 How. 486; Fowler v. Hart, 13 How. 373.

In a proper case he thought the circuit court would, under this act, entertain a bill in equity to ascertain the extent of liens and to seil free of encumbrances. That a lien-holder is an adverse claimant, and that an ordinary debtor is such, was several times decided under the act of 1841, the language of which, so far as affects this question, is identical with that of the present law. See Mitchell, Assignee, v. Great Works Co., per Judge STORY, 2 Story, 648; Pritchard v. Chandler, 2 Curtis, 488, by Judge CURTIS. In Forsyth v. Woods, 11 Wallace, 484, jurisdiction to recover a debt was assumed without question; and see Morgan v. Thornhill, II Wall. 65. In McLean, Assignee, v. Lafayette Bank et al., 3 McLean, 415, it is said that an assignee in bankruptcy, having a right to discharge encumbrances on the bankrupt's estate, may file his bill in chancery against all encumbrancers to ascertain the validity, priority, and amount of the encumbrances.

But all this history, it is said, is rendered wholly inapplicable by the late decision in Marshall v. Knox, 16 Wallace, 551, in which it was decided that property in the custody of a state sheriff, by process anterior to the bankruptcy, could not be interfered with by a district court.

His honor, in the progress of the opinion, indicated his intention to make an order directing future proceedings in the several foreclosure cases. Such an order, however, was not made, but subsequently an order was entered in each of the cases vacating the previous orders staying the proceedings, leaving the counsel for the assignee to take such action, in the light of his honor's opinion, as they should deem best. It is understood that an immediate application will be made by them for leave to amend their answers, and to file a cross-bill in the Sutherland case.

Railway Negligence

Killing Cattle

Track within Corporate Limits.

Fencing

Lull's cow, while passing over the track to go to the river for water, was killed at one side of the highway crossing where there was no cattle

But for that case, after a good many perusals of the judgments A reading of all the judgments upon this subject with attention in 3 Howard, 292, ex parte Christy; Peck v. Jenness, 7 How. 612; to the facts involved in each will show with entire clearness that Orton v. Smith, 18 How. 263; Taylor v. Carryl, 20 How. 583; all which is meant when it is said that new parties and new subFreeman v. Howe, 24 How. 450; Buck v. Coldbath, 3 Wall. 334;ject matter cannot be introduced into a cause by cross-bill, is that and the many judgments in which their doctrine has been ap- it cannot be done when they are foreign to and not necessarily plied and limited—he would have confidently held with so many connected with the matter of the original bill. of his brethren of the circuit and district courts, that the bankrupt law did intend to create a complete system and enable the district court to administer all the assets of the bankrupt, irrespective of the accident of whether litigation might be pending in state tribunals concerning portions of his property. They who have so held did so in no want of familiarity with the rule which these cases affirm. It was thought that congress had exercised its undoubted power to create a complete bankrupt system, and draw instanter into the district court every right of the bankrupt. When it dissolves attachments, notwithstanding the custody of the state courts, and abrogates assignments when the property is in the hands of the assignees under state insolvent laws, and full jurisdiction is expressly given to arrest all pending suits in personam, at law in state tribunals, no matter when commenced, it FLINT & PERE MARQUETTE RAILWAY CO. v. LULL. would seem that but a small additional power is necessary to comSupreme Court of Michigan, January Term, 1874. plete the wholesome and beneficial system which ought at least, he thought, to have been established by the statute. And when [Through the courtesy of Henry N. Chaney, Esq., of Lansing, Michiit is considered, what Marshall v. Knox seems to concede, that gan, editor of Chaney's Quarterly Digest of Decisions of the Supreme where judgments are confessed and levies made by way of pref- Court of Michigan, we are permitted to extract from advance sheets, emerence in the state courts within four months preceding the bank-bracing the decisions rendered at the January Term, 1874, the interesting case of Flint & Pere Marquette Railway Company v. Lull.] ruptcy, they may be declared void, and the property seized by the bankrupt court; the remaining domain of state tribunals which cannot be interfered with is so trivial and exceptional as to leave the inference a strong one that it was not intended to be protected by congress. His honor remarked that it was difficult, many times sitting in the midst of exigencies which demand a more extended power in order to secure an efficient and protective administration of right, at first to appreciate the wisdom of decisions which seemingly without necessity limit and cramp our jurisdiction. It was only when we take into consideration a series of decisions made in a long course of years that their wisdom could be fully appreciated. They have established a principle, which experience had found to be beneficent, of leaving every assumption of jurisdiction on the part of federal tribunals to be expressly authorized by congress. Nothing was to be taken by implication, unless it was that necessary inference without which the law could not be administered. Notwithstanding the ingenious criticism of the assignee's counsel, he did not see why Marshall v. Knox does not decide that, excepting cases where a fraud upon the bankrupt law is charged, property in custodia legis by a state court was beyond the jurisdiction of the district court. The decision in this case, he said, goes upon the supposition that Marshall v. Knox so holds. The doctrine, however, he thought, has no application where the pending suits are in our own tribunal, and the property in the hands of our own receiver. Here no comity is to be violated. A large mass of property worth millions, encumbered by successive and doubtful liens, some upon one portion and some upon another, with bills unnecessarily and irregularly filed, he thought, within principles entirely familiar to courts of equity, and especially to the federal tribunals, a bill by the assignees, setting forth the entire history of the case, might be authorized by the court. He did not think it necessary in this case to resort to the doctrine of ancillary or cross-bills. He had, however, had his request answered which was made during the argument, that he might be referred to a few cases sustaining a bill in the nature of a crossbill, in which both new parties and new matters might be added, irrespective of any power derived under the bankrupt act. The following cases were then cited and commented upon: Brown v. Story, 2 Paige, 594; Jones v. Smith, 14 Ill. 229; Blodgett v. Hobart, 18 Vt. 414; Fletcher v. Holmes, 25 Ind. 458-68. That the time in which this may be done is within the discretion of the court, see Story's Eq. Pl. 396.

guard. Lull owned the land on both sides of the track between the crossing and the river. He sued for the value of the cow under Act 43 of 1872 (now repealed, but substantially re-enacted so far as cattle-guards are concerned, in Sec. 15 of Art. 4 of Act 198 of 1873-Sess. Laws of 1873, Vol. 1, p. 538), and obtained a verdict. The company urged that the statute obligation to fence the track and put in cattle-guards did not apply to so much of the road as lay within the limits of a city or village, and supported itself by reference to Lafayette, etc., R. R. Co. v. Shriner, 6 Ind. 141; Indianapolis, etc., R. R. Co. v. Kinney, 8 Ind. 402; Davis v. Burlington, etc., R. R. Co., 26 Iowa, 549; and Durand v. Chicago, etc., R. R. Co., 26 Iowa, 558. The judgment was, however, affirmed with costs.

The following are the rulings made, and the authorities by which they are supported:

Fencing Track within Corporate Limits.-The more satisfactory rule relating to statutes requiring the fencing of railroad tracks, holds that they do not apply where it would be illegal or improper that the road should be fenced, as at the crossings of streets and alleys in a city or town, or at mills, etc., where public convenience requires the way to be left open. This, however, is the limit of the exception, and the track within the corporate limits of a city or town, at points where no such reasons apply, is as much within the statute as the track elsewhere. Indianapolis, etc., R. R. Co. v. Parker, 29 Ind. 471; Jeffersonville, etc., R. R. Co. v. Parkhurst, 34 Ind. 501. Any exceptional case must be proved by the railroad company, and cannot be inferred.

Fencing at Depot.-No statute can be held to require depot grounds to such fencing is unusual, but because the convenience of the company, as be fenced, without a very clear declaration to that effect, not only because well as of the public in transacting business with it, would be very seriously incommoded by such fencing, and the track of the company can be better methods than fencing. protected, and with less impediment to business at such points, by other

Contributory Neglect.-In case of injury to cattle, the owner's contribShore & Mich. Southern R. R. Co. v. Miller, 25 Mich. 274; Corwin v. N. utory negligence would be a defence in a common-law action. Lake Y. & Erie R. R. Co., 13 N. Y. 46. But in cases rising under statutes, the purpose of which is not merely to compensate the owner of destroyed property, but to enforce against the company an obligation they owe to the public, it is almost uniformly held that the plaintiff's negligence in case of his property can constitute no defence. Indianapolis, etc., R. R. Co. v.