same right which was involved in the foreclosure suit against the Western North Carolina Railroad Company, and which was cut off and foreclosed by the decree and sale. The relief asked by the supplementary bill filed by the purchaser in the United States circuit court is to prevent the parties thus decreed against from retaking the railroad property in disregard of the court's decree. In Dietzsch v. Huidekoper, 103 U. S. 494, 497, 26 L. Ed. 497, it is said, "A court of the United States is not prevented from enforcing its own judgments by the statute which forbids it to grant a writ of injunction to stay proceedings in a state court;" and in that case an injunction restraining the enforcement of a judgment of a state court in a replevin suit was sustained, because the effect of enforcing the judgment in the state court would be to defeat the judg ment of the federal court, which had jurisdiction of the subjectmatter. In Root v. Woolworth, 150 U. S. 401, 411, 14 Sup. Ct. 136, 37 L. Ed. 1123, a decree had been entered in a circuit court of the United States in a suit to quiet title in favor of one Morton establishing his right to certain land as against Root. Afterwards, notwithstanding this decree, Root, claiming by the same title as before, re-entered, and took possession. Morton's title had been conveyed to Woolworth, and he filed his supplementary and ancillary bill asking that Root be enjoined from asserting any claim of title to the land, and from interfering with Woolworth's sole and exclusive possession. This bill, although filed long after the original decree, and by the assignee of the original complainant, was sus tained as a proper exercise of the jurisdiction of courts of equity to make their decrees effective by injunction and writs of assistance. It seems quite clear to us that the injunction granted in the present case against S. T. Pearson was proper, and was within the jurisdiction of the circuit court, as ancillary to the original decree of foreclosure, and for the purpose of making that decree effective against persons who were bound by it.

Whether the circuit court had jurisdiction, and could, notwithstanding section 720 of the Revised Statutes, enjoin Mrs. James and Mrs. Howard from proceeding with the suit entered by them, or any similar suit, or from in any manner interfering with the property of the Western North Carolina Railroad or the Southern Railway, purchased at the foreclosure sale, is, to our minds, quite a different question. The rule that a sale of real estate under judicial proceedings concludes no one who is not in some form a party to the proceedings (Dupasseur v. Rochereau, 21 Wall. 130-135, 22 L. Ed. 588) has been applied by the supreme court of the United States to a foreclosure sale of telegraph lines (United Lines Tel. Co. v. Boston Safe-Deposit & Trust Co., 147 U. S. 431-448, 13 Sup. Ct. 396, 37 L. Ed. 231), and to a foreclosure sale of a railroad (Pittsburgh, C., C. & St. L. R. Co. v. Long Island Loan & Trust Co., 172 U. S. 493– 515, 19 Sup. Ct. 238, 43 L. Ed. 528). Neither Mrs. James nor Mrs. Howard could be said, we think, to have been in any sense a party to, or claiming under any party to, the foreclosure suit, or bound by it. Whatever rights they have accrued to them three years after the sale, and had no connection whatever with the rights which

were adjudicated by the decree. It may be, notwithstanding anything adjudicated by that decree, that under the laws of North Carolina the Western North Carolina Railroad Company was answerable to them for the damages for which they obtained their judgments, and the railroad, now in possession of the Southern Railway Company, also liable. Those are questions not litigated in the foreclosure suit, and which the appellees, in our judgment, could not, by this supplementary and ancillary proceeding, compel Mrs. James and Mrs. Howard to bring before the circuit court. Sargent, v. Helton, 115 U. S. 348, 6 Sup. Ct. 78, 29 L. Ed. 412; Dial v. Reynolds, 96 U. S. 340, 24 L. Ed. 644; Haines v. Carpenter, 91 U. S. 254, 23 L. Ed. 345. The sale to the Southern Railway Company under the foreclosure decree is a defense which can be pleaded in any state court, and, if the state court should fail to give that effect to the decree of the United States circuit court which the parties claiming under it are advised it should have, the law provides an appeal for the revision of that refusal by the supreme court of the United States. Dupasseur v. Rochereau, 21 Wall. 130–134, 22 L. Ed. 588; Bank v. Stevens, 169 U. S. 432-456, 18 Sup. Ct. 403, 42 L. Ed. 807; Crescent City Live-Stock Co. v. Butchers' Union Slaughter-House Co., 120 U. S. 141, 7 Sup. Ct. 472, 30 L. Ed. 614; Pittsburgh, C., C. & St. L. R. Co. v. Long Island Loan & Trust Co., 172 U. S. 493-507, 19 Sup. Ct. 238, 43 L. Ed. 528. In the bill which was filed by Pearson and Mrs. James in the superior court of Rowan county on behalf of themselves and others, stockholders and creditors, the allegations on which relief is asked are largely based on the alleged invalidity of the mortgage foreclosed by reason of the supposed rights of Pearson and other stockholders, and it is charged that the pretended mortgage deeds and pretended foreclosure sale have cast a cloud upon the property sold, which makes it impossible for Mrs. James to realize her judgment claim. Thus it appears that the scheme of the bill is based, not upon the supposed right contended for in argument as the result of the opinion of the supreme court of North Carolina in James v. Railroad Co., supra, viz. that the old Western North Carolina Railroad Company continues to exist, and to be answerable for damages incurred in the operation of the railroad, and the railroad in the hands of the Southern Railway Company liable for the judgment, but upon the allegation that by reason of the rights of certain stockholders the mortgage foreclosed was invalid, and the foreclosure sale to be disregarded and treated as a nullity, and a receiver appointed in that collateral proceeding in another court, to take the property from the purchaser. It is not a creditors' bill, based upon legal and equitable rights as creditor, but a stockholder's bill, in which a creditor has joined, basing her claim to relief mainly upon the alleged invalidity of the mortgage foreclosed because of the nonassent of certain stockholders. At least this supposed ground of relief is the gravamen of the whole bill.

Without passing upon any other questions argued by counsel, and which we do not consider necessary to the decision of the case before us, we hold that the injunction, so far as it enjoins the further prosecution of the bill which was filed in the superior court of

Rowan county, should be continued, and the decree, so far as it grants that injunction, should be affirmed, but that the decree should be so modified as not to prohibit Mrs. James and Mrs. Howard from proceeding as they may be advised with any other suit not based upon the supposed rights of stockholders with respect to enforcing their judg ment claims. The cause is remanded, with directions to modify the decree in accordance with this opinion.

(98 Fed. 499.)

KIRKER et al. v. OWINGS et al.

(Circuit Court of Appeals, Sixth Circuit. July 5, 1899.)

No. 659.

1. RECEIVERS-ENFORCEMENT OF BONDS - SUMMARY DECREE AGAINST SURETY. A court of equity, appointing a receiver, and taking from him merely a common-law bond, conditioned for the faithful discharge of his duties and a compliance with the orders of the court, is not justified by the precedents in entering a summary decree against the surety for a default of the receiver. Unless such power is reserved in the bond itself, or by statute or rule of court, the obligation of the surety is one which can be enforced only in a court of law.

2. SAME-ACCOUNTING-CHARGING RECEIVER WITH PERSONAL LIABILITY.

A receiver for a corporation, who by leave of court continued the performance of a contract previously made by the corporation, by the terms of which a certain portion of the amount earned thereunder by the corporation was to be retained by the other party, and applied on an indebtedness of the corporation for which such other party held a lien on certain of its property, of which fact the court was not advised, and who, after paying a considerable amount on the lien in such manner, sold the property to the lienholder for a small sum in addition to the lien, without leave of the court, and leaving unpaid debts incurred by him for current expenses in performance of the contract, and also leaving equities between the corporation and the lienholder, which might have reduced the amount of the lien, unadjusted, was properly charged by the court personally with payment of such unpaid debts of the receivership.

3. SAME ANCILLARY RECEIVERSHIPS-RELATION TO PRIMARY SUIT.

Where a court in proceedings for an ancillary receivership appoints as receiver for the property within its jurisdiction the same person appointed in the primary suit, such receiver becomes its own, as to the administration of such property, and must be governed entirely by its orders. In such case each court acts independently within its own jurisdiction, and the relation between them is merely one of comity. The court in which the primary suit is pending has no jurisdiction over property in the custody of the other; and where, under its order, the receiver sells such property, and returns the proceeds to that court, without the knowledge and concurrence of the court by whose orders the property was placed in his possession, and leaving unpaid expenses incurred by him in the ancillary receivership, he may properly be charged, as ancillary receiver, with personal liability for such expenses, and the order under which he acted affords him no protection.

4. SAME-ACCOUNTING-ORDER CHARGING RECEIVER WITH PERSONAL LIABILITY. Where, on his accounting, a receiver is charged personally with the payment of debts incurred by him as such receiver, the proper form of order is that he pay such debts, and in default thereof stand committed for contempt, and that the creditors have leave to bring suit on his bond against him and his surety.

Appeal from the Circuit Court of the United States for the Eastern District of Tennessee.

This is an appeal from a decree of the circuit court for the payment of $1,300 against E. C. Kirker, personally, and S. T. Dewees, the surety on Kirker's bond as receiver of the court. The decree was entered in the suit in which Kirker had been appointed receiver. The suit was begun, by what was termed an "ancillary bill," by Robert Ballard, trustee, against the Ella Layman Towboat Company. Ballard averred that he was a citizen of Ohio, and that the Ella Layman Towboat Company, the defendant, was organized under the laws of the state of West Virginia for the business of towing and freighting coal and other commodities, and owning a number of steamboats and barges, and other plants and appliances incident to such business; that on November 23, 1896, the company had made an assignment to complainant for the benefit of creditors; that among the assets assigned was the steamboat Springhill, nine barges, and one flat, all of which were then in the Tennessee river. The remaining averments of the bill were as follows: "Your orator further shows that as the creditors of the said company are not mentioned in said trust deed, as the same gives no directions as to the manner, time, and terms of disposing of the same, it is necessary, in order that said trust may be properly executed and the proceeds of the trust properly disbursed, that the creditors of the said company should be ascertained by proper proceedings under your honors' direction and protection; your orator being ignorant of the names of said creditors, and the amounts of their claims. And it is also proper for the protection of your orator, and the due discharge of his duties as trustee, that he should have the advice and direction of this honorable court, and that said trust should be administered under its directions. Your orator further represents that he is informed, believes, and charges, that said company has on its hands a number of contracts for towing and freighting, two of which are for conveying coal from Greenville, Miss., to New Orleans and other Southern points, and for towing iron ore on the Tennessee river, which contracts are both profitable ones to the company, out of which it has been making money, and which have yet some time to run; that, as your orator is informed, believes, and charges, it will be to the advantage of the creditors of said company to carry out these contracts and others, and, pending the sale of this company's property, to keep the same occupied in a continuance of the towing and freighting business of this company. And on account of the character of the trust property and the use which your orator believes should be made of it pending its disposal, it is, in your orator's judgment, best that a receiver be appointed by this court to take charge and possession of all said property, and manage and dispose of it under the direction of your honors, which receiver should be a competent river man, acquainted with the character of the business of said company. Complainant charges that an original general creditors' bill has been filed by complainant in the United States circuit court for West Virginia, and a receiver appointed therein, and complainant asks that the receivership be extended over the property in Tennessee under this ancillary bill. Your orator therefore prays that the creditors of said company, and the amounts and priorities of their claims, may be ascertained under the direction of your honors' court; that a receiver may be appointed to take charge and possession of said trust property, and to use, manage, and dispose of the same under your honors' direction; that all proper accounts be directed, and decrees entered; and for such other, further, and general relief and decree as the equity of the case may require, and to your honors may seem meet."

On the same day that the bill was filed a certified copy of the order by the circuit court for the district of West Virginia was filed, which, after reciting that actions had been brought against the defendant company in the circuit court of Roane county, Tenn., and attachments had been issued and levied upon the steamer Springhill, and that the loss of the use of the steamer would be fatal to the profitable contract which the defendant company had for towing upon said Tennessee river, authorized the receiver to remove the case from the circuit court of Roane county to the circuit court for the Eastern district of Tennessee, and to give bond in the attachment suit for the release of the

steamer Springhill, and to use the same in the towing contract on the Tennessee river. Upon the tendering of the bill and the order the court below allowed the bill to be filed, and made the following order: "The complainant is allowed to file the ancillary bill presented, and this cause will be taken and considered as ancillary to the original bill in West Virginia. The order of Judge Jackson, of December 5, 1896, will be filed in this cause as part of the record; and thereupon this cause came on to be heard on this 11th day of December, 1896, before Hon. C. D. Clark, judge, etc.. upon the motion of complainant for the appointment of a receiver for the property attached; and, it appearing to the court that this is a proper case for the appointment of a receiver, it is ordered by the court that E. C. Kirker, who appears to the court to be a proper and fit person, be, and he is hereby, appointed receiver in this case, and required to give bond in the sum of $4,000; and he is authorized to take possession of the property attached, and the other property of defendant in this state, and hold the same subject to the further orders of the court in this case. And because it appears further to the court, from the admissions of both parties, that the defendant Ella Layman Towboat Company has made a general assignment for the benefit of creditors to Robert Ballard, trustee, and that said Robert Ballard, trustee, has filed a general creditors' bill to wind up the business and affairs of said Ella Layman Towboat Company, in the United States circuit court for West Virginia, and that under said bill said E. C. Kirker has been appointed receiver, and has taken possession of the property of said Ella Layman Towboat Company, except the property attached in this cause; and because it appears further to the court, from the statements of counsel for the parties, that said towboat company has a contract for towing ore on the Tennessee river from points near Kingston to South Pittsburg, which contract is believed to be profitable and advantageous to the creditors of said towboat company, to have the same carried out, and that it is impossible to carry out said contract unless said E. C. Kirker, as receiver, is allowed to use the steamer Springhill, upon which the attachment has been levied by James Heekin & Co.,—it is therefore ordered by the court that said E. C. Kirker be allowed to make all proper and necessary use of said steamer Springhill in towing said ore and carrying on said contract, and doing such other work on said Tennessee river and tributaries as it is legitimate for a steamer to engage in. But the said E. C. Kirker, receiver, is ordered and required to keep said steamer in good repair, and to keep the same insured in the sum of five thousand dollars (5,000), so that in the event said steamer should be destroyed by fire the amount of said insurance received shall be paid into this court, to stand in lieu and stead of said steamer. to await the determination of this suit. Said steamer shall not be taken out of the state of Tennessee, unless authorized by further order of the court. Said E. C. Kirker will be required to give bond in the sum of $4,000, to be approved by the clerk of the court, for the faithful discharge of his duties in this case."

On December 14th, Kirker filed the following bond:

"In the Circuit Court of the United States for the Southern Division of the Eastern District of Tennessee.

"This undertaking, made and entered into the 14th day of December, 1896, witnesseth, that we (E. C. Kirker, as principal, and Samuel T. Dewees, as security) do promise and undertake to and with the parties in interest in said cause, for the benefit of whom it may concern, in the penal sum of $4,000, that E. C. Kirker will well and faithfully discharge the duties of receiver of the property and estates of the defendant company, particularly described in the bill in the above-described cause, and obey all orders of the court herein. Witness our hands and seals this 14th day of December, 1896.

"E. C. Kirker,
"Samuel T. Dewees.

"Acknowledged before and approved by me this 14th day of December, Henry O. Ewing, Clerk."

1896. On the 27th of September, 1897, Kirker, the receiver, made the following report to the court: "Your receiver begs leave to submit the following report in