had expressly granted for the benefit of the public at large. The very general terms of the legislative authority invoked in this case to sanction the proposed appropriation of the complainant's road-bed surely cannot warrant the conclusion that such was the legislative intent. WOODS AND MCBROOM v. THE PITTSBURG, CINCINNATI AND ST. LOUIS Rr. Co. Contractors having a claim against a railroad company which, by the act of Jan. 21, 1843 (P. L. 467), is paramount to the lien of a subsequent mortgage, and who are made parties defendant to a bill of foreclosure of said mortgage, are bound by a decree entered against them pro confesso in said foreclosure proceedings, by virtue of which the road and franchises of the company are ordered to be sold discharged of all liens, and cannot, therefore, long subsequently assert their claim as against the purchaser at said sale. A prayer in the said bill of foreclosure, praying that the mortgage be decreed a first lien on the road and franchises, coupled with the joinder of the said contractors as defendants, and an allegation that they set up claims against the road, which complainant does not admit to be of any validity as against his mortgage, constitute sufficient ground for such a decree as has been mentioned above, whereby the contractor's claim is con cluded. GORDON, J., dissents. Error to the Common Pleas No. 2, of Alleghany County. Scire facias sur decree in equity, by John McBroom and Hugh Woods against the Pittsburg and Steubenville R. R. Co. and the Pittsburg, Cincinnati, and St. Louis R. R. Co., terre tenants, issued by virtue of the Act of April 4, 1862, § 1 (P. L. 235). On the trial (before KIRKPATRICK, J.) the following facts appeared: In 1855 John McBoom and Hugh Woods entered into a contract to perform certain work on the line of the Pittsburg and Steubenville R. R. Co. They performed the work, and on August 14, 1856, at a meeting of the directors of the company a resolution was passed, assuming and promising to pay to McBroom and Woods, as compensation for their labor, the sum of $6650. The amount never was paid. On August 1, 1856, the railroad company executed a mortgage of its road and franchises to Thomas McElrath, as trustee, for $1,000,000, in order to secure the holders of bonds of the company the same day issued to that amount. The mortgage was recorded October 20, 1856. It was executed in contravention of the Act of Jan. 21, 1843 (P. L. 367), which provides that: "It shall not be lawful for any company incorporated by the laws of this Commonwealth and empowered to construct, make, and manage any railroad, . . . while the debts and liabilities. . incurred by the said company to contractors, laborers, or workmen employed in the construction or repair of said improvement remain unpaid, to execute a . . . mortgage or other transfer of the real or personal estate of the company, so as to defeat, postpone, endanger or delay their said creditors, without the written assent of the said creditors first had and obtained; and any such .. mortgage or transfer shall be deemed fraudulent, null and void as against any such contractors, laborers, and workmen, creditors as aforesaid." On July 14, 1857, McBroom and Woods filed a bill in equity against the Pittsburg and Steubenville R. R. Co., averring the contract entered into by them with said corporation. The company defendant did not appear, the bill was taken pro confesso and a decree entered Jan. 5, 1858, in accordance with the prayers of the bill, fixing the amount due the complainants at $10,689.43 and decreeing that defendant pay the said sum. In 1865 Thomas McElrath, as trustee for the various bondholders, filed a bill in equity in the Supreme Court against the Pittsburg and Steubenville R, R. Co. et al. to foreclose the mortgage held by him. To this bill McBroom and Woods were made defendants, it being averred that they "allege themselves to have been contractors with the Pittsburg and Steubenville R. R. Co. for the construction of certain work, and that in pursuance of said contract they did some work towards the construction of said railroad, and claim some lien or interest thereon, of the nature of which the complainant is not advised, but which he does not admit to be valid, or that the same can in any wise affect the priority of lien of the said mortgage or the rights of any of the holders of the bonds secured thereby." The bill prayed that the mortgage of August 1, 1856, be decreed and declared a first lien on the premises; that the amount due the various bondholders secured thereby be ascertained; that the company defendant be decreed to pay said sum within a time certain; and that in default of such payment "it be decreed that the defendants, and all persons claiming under them, be absolutely barred and foreclosed of and from all right and equity of redemption of, in, and to the said premises, or that a decree be entered directing the sale of the whole of said premises at such time and in such manner as the Court may direct." McBroom and Woods were served with a subpoena, and entered an appearance, but upon being afterwards ruled to plead answer or demur, failed to comply. A decree pro confesso was entered against them. The case was heard on bill, answer, and proofs, and on the Master's report, and on May 29, 1867, a decree was finally entered, that the mortgage of August 1, 1865, was a first lien on the premises, fixing the amount due the various bondholders, ordering that the same be paid within ninety days, and in default thereof directing the sale of the mortgaged premises, and authorizing and empowering McElrath to execute a deed therefor to the purchaser in fee simple, "and that the said purchaser... should thereupon hold the same free and discharged of all liens or incumbrances whatever, and from any claims of the Pittsburg and Steubenville R. R. Co. thereon or thereto." (See McElrath v. Pittsburg and Steubenville R. R. Co., 5 Smith, 192.) Default having been made in paying the amount ascertained to be due by the decree, the premises were sold, and were bought by the Pittsburg, Cincinnati, and St. Louis Ry. Co., to which corporation McElrath executed a deed in fee simple. On Feb. 2, 1878, McBroom and Woods issued the writ of scire facias in this case on the decree of Jan. 5, 1858, to which the Pittsburg, Cincinnati, and St. Louis Ry. Co. took defence. The writ was issued in accordance with the provisions of the Act of April 4, 1862, § 1 (P. L. 235), which provides as follows: "Whereas, it frequently happens that incorporated companies, by assignment, conveyance, mortgage, or other transfer, divest themselves of their real and personal estate, in contravention of the provisions of the resolution of Jan. 21, 1843; therefore, Be it enacted, That whenever any incorporated company, subject to the provisions of the above resolution, shall divest themselves of their real or personal estate, contrary to the provisions of the said resolution, it shall and may be lawful for any contractor, laborer, or workman employed in the construction or repair of the improvements of said company, having obtained judgment against the said company, to issue a scire facais upon said judgment, with notice to any person, or to any incorporated company, claiming to hold or own said real or personal estate, . . . the case to proceed as in other cases of scire facias on judgments against terre tenants." Under the instructions of the Court the jury found for the plaintiffs in the sum of $24,849.92, subject to the question of law, which was reserved, whether plaintiffs were not estopped and concluded from recovery by the proceedings and decree in the case of McElrath v. Pittsburg and Steubenville R. R. Co. et al. (5 Smith, 192). Subsequently the Court entered judgment for the defendant non obstante veredicto on the point reserved, whereupon plaintiffs took this writ, assigning for error the entry of judgment non obstante veredicto. T. C. Lazear and S. A. McClung (with whom was John G. McConnell), for plaintiffs in error. The claim of plaintiffs was clearly good under the Act of 1843, in perpetuity as against the mortgage to McElrath. Fox v. Seal, 22 Wall. 424: Tyrone & Clearfield R. R. Co. v. Jones, 29 Smith, 60; Penna. & D. R. R. Co. v. Leuffer, 3 Norris, 168; Shamokin & P. R. R. Co. v. Malone, 4 Norris, 25; Pitts., C. & St. L. R. R. Co. v. Marshall, Ibid. 168. As against plaintiffs that mortgage was void. They were therefore not entitled to claim the proceeds of the mortgaged property in a sale of foreclosure thereunder. Byrod's Appeal, 7 Casey, 241; Fisher's Appeal, 9 Casey, 294; Hoffman's Appeal, 8 Wright, 95. It was improper to make them a party to proceedings on an incumbrance subsequent to their own, and they could not be bound by a decree therein. Gehon v. White Lead Co., 3 Hals. Ch. 535; Williamson v. Probasco, 4 Ibid. 571; Hogan v. Walker, 14 How. 37; Jerome v. Carter, 94 U. S. 735; Mich. State Bank v. Gardiner, 3 Gray, 308; Delaberen v. Norwood, 5 Swanst. 143; Fisher v. Kurtz, 4 Casey, 50. The decree ordering the property to be sold discharged of liens referred only to the lien of the complainant, and if broader in meaning had no other effect, since no sale free from the lien of plaintiff's claim was prayed for by the bill. Hampton and Dalzell, for defendant in error. In a bill of foreclosure all incumbrancers, prior or subsequent, should be made parties, and will be bound by the decree. Story Eq. Pl., sect. 193; Finley v. Bk. of U. S., 11 Wheat. 304; Bishop of Winchester v. Beaver, 3 Ves. 315; Hames v. Beach, 3 Johns. Ch. 459; Bishop v. Paine, 11 Ves. 198; Mondey v. Mondey, 1 Ves. & B. 223; Cockes v. Sherman, 2 Freeman, 14; Sherman v. Cox, 3 Ch. Rep. 83; Ensworth v. Lambert, 4 Johns. Ch. 604; McGowan v. Yerkes, 6 Johns. Ch. 456; Jerome v. Carter, 94 U. S. 735; Gifford v. Hart, 1 Sch. & Lef. 408; Westcott v. Edmunds, 18 Smith, 36; Taylor v. Cornelius, 10 Smith, 198. The decree of the Court ordering a sale discharging all liens was fully justified by the intent of the bill, which was to have the lien of the mortgage decreed a prior incumbrance to all others. The Court having jurisdiction of the matter, had a right to decide every incidental question involved, and to make an end of the whole matter. Wilhelm's Appeal, 29 Smith, 120. That the sale conferred a title free from the lien of plaintiff's claim cannot be doubted. Such are the express terms of the decree. January 2, 1882. The Court. It is not to be questioned that the claim of the plaintiff, a contractor of the Pittsburg and Steubenville R. R. Co., under the resolution of the General Assembly of Jan. 21, 1843 (Pamph. L. 367), was paramount to the mortgage of McElrath, under proceedings upon which the road was sold and the defendants claim title. The amount of their claim was ascertained by the decree of 5th Jan., 1858, at least prima facie though not conclusively, as to McElrath, the mortgagee, who was not a party to it, though his mortgage was then in existence. It is clear, also, that if it had been paid in whole or in part when the decree of foreclosure and sale under the McElrath mortgage was made, the mortgagee and purchaser were entitled to the benefit of such pay ment. It may be, also, that under the resolution no mere acquiescence or other acts in part can operate as an estoppel. Nothing can avail but the written assent of the creditors to the mortgage first had and obtained. (Shamokin Valley and Pottsville R. R. Co. v. Malone, 4 Norris, 25.) But it certainly cannot be maintained that there may not be an estoppel by matter of record. An adjudication at law or in equity against the claim of the contractor, must be as conclusive against him as against any other claimant. What, then, was the effect of the proceeding in this Court upon the McElrath mortgage and the decree of sale thereunder? If the plaintiffs had not been made parties, their rights would have been entirely unaffected. But they were parties. The bill charged that "they (Woods and McBroom) claimed to have a lien on the premises described in the mortgage; that they alleged themselves to have been contractors with the said Pittsburg and Steubenville R. R. Co., for the construction of said work, and that in pursuance of said contract they did some work toward the construction of said railroad, and claimed to have some lien or interest therein, of the nature of which the complainants are not advised, but which they do not admit to be valid, or that the same can in anywise affect the priority of lien of the said first mortgage, or the rights of any of the holders of the bonds thereby secured." The plaintiffs were then distinctly called upon to come in and make known their claim, not as a lien merely on the fund to be produced by the sale, but some interest in the railroad. They were stated to be contractors for the building of the roads, the holders therefore of a privileged claim-under the resolution of 1843 something more than a lienan interest in the road which could not be diverted by a sale. The inference from all this was too plain to be mistaken. It was not as mere holders of a lien which could come upon the fund, but as having an interest paramount to the mortgage, that they were summoned to appear and answer. The principal contention of the plaintiffs here has been that there was no prayer in the bill that the road should be sold clear of all incumbrances. If, then, contractors had come in and established their claim, no such decree could have been made. The sale would have been necessarily subject to their claim. It might well be that the sale would not produce sufficient to pay them. The purchasers must then take cum onere. But no such contractors making defence, though summoned and appearing, the decree of sale could then properly be made, as it was, clear of all incumbrances. If all that the bill sought was to ascertain who were lien holders to be paid from the proceeds, they were unnecessary parties. This they knew very well; they have, or ought to 3 A. & E. R. Cas.-34 |