Brooks v. Ry. Co., 101 U.S. 443

The appellants, who were complainants below, are trustees in a mortgage made by the Burlington and Southwestern Railway [p. 444] Company on its road and other property to secure $1,800,000 of bonds put on the market and sold. They instituted this foreclosure suit against the company, and brought in, during its progress, other parties who were asserting mechanics’ liens on the road. Of these parties only the interest of O’Hara Brothers and Wells, French, & Co., whose liens were by the court held to be paramount to that of complainants, remain to be considered in the appeal of the trustees from that decree.

This purely artificial being, composed of the officers and some [p. 445] of the stockholders of the railway company, was organized for the purpose of building this road. It belongs to a class of corporations which have become well known of late years as instruments to enable the officers of railroad companies to make contracts with themselves to build the roads for their stockholders. In the present case, this construction company having sublet all the contract to one J. W. Barnes, very soon took itself out of the way, and by an agreement between it and the railway company, of which the following extract is found in the record, its existence ceases to be of any further significance in this contest: —

“ Sect. 1851. It shall be the duty of every person, except as has been provided for sub-contractors, who wishes to avail himself of the provisions of this chapter, to file with the clerk of the district court [p. 447] of the county in which the building, erection, or other improvement to be charged with the lien is situated, and within ninety days after all the things aforesaid shall have been furnished, or work or labor done or performed, a just and true account of the demand due or owing to him after allowing all credits, and containing a correct description of the property to be charged with said lien and verified by affidavit.”

The statute, however, makes provision that a sub-contractor who shall do the work which his principal had contracted to do shall by proper proceeding secure to himself the lien which arises from the work done or materials furnished. In such case there is a more complex affair. There are here the owner of the property, the principal contractor, and the sub-contractor, who, as well as prior and subsequent incumbrancers or lien holders, have rights to be affected. It may generally be supposed that the principal contractor has sublet his contract so as to leave a profit to himself. He is entitled, therefore, to see that his sub-contractor does not take this profit. The owner is not bound for more than he agreed to pay the principal contractor. In view of these interests, sect. 1847 of the Revision, sect. 2131 of the Code of 1873, enacts that every sub-contractor wishing to avail himself of the benefit of the act, shall give notice to the owner of the land, before or at the time he furnishes any of the materials or performs any of the labor, of his [p. 448] intention to perforin or furnish the same, and afterwards he shall settle with the contractor therefor, and having made the settlement in writing, the same, signed by the contractor and certified by him to be just, shall be presented to the owner. He is also required, within thirty days from the time the things shall have been furnished or the labor performed, to file with the clerk of the district court of the county in which the building is situated a copy of said settlement, and a correct description of the property to be charged with the lien, the correctness of which shall be verified by oath. As we have already seen, the act of 1862 declares that a failure to file this settlement shall not operate to defeat the lien as against any one except purchasers or incumbrancers without notice, whose rights accrued after ninety days, and before the account or settlement or lien claim is filed.

As we understand this objection, it is founded on the idea that while, if the whole road had been uninterruptedly built under one contract, the lien of the contractors and sub-contractors would have been good against the whole road, though they had contributed only to the building of a limited portion °t it, yet because these sub-contractors were only employed on one division of the road, after another had been finished, and under a distinct contract with the company made after that completion, the lien can only attach to the last section of the vol. xi. 29 [p. 450] road, and even this is subordinate to the mortgage of the appellants.

But the argument most confidently urged here is that the road was built in sections, and that there was such a separa tion in space and time in the construction of them that they cannot be considered as one improvement within the meaning of the statute. The argument is that the road from Viele to Bloomfield is one road; that then it is interrupted, and the track of another company is used from Bloomfield to Moulton, [p. 451] that there another road begins which was constructed under another contract, and that no lien for work done here can attach to the road between Viele and Bloomfield.

Provision is also made for writs of error and appeals from the territorial Supreme Court to the Supreme Court of the United States in the same manner and under the same regulations as are required to remove here the judgment or decree of the [p. 454] Federal Circuit Court for re-examination, where the value of the property or the amount in controversy exceeds two thousand dollars, or where the Constitution of the United States or an act of Congress or a treaty is brought in question.

Compensation for her injuries being refused by the company» she, her husband joining with her, instituted the present suit in rem against the steamship in the proper district court of the Ter ritory to recover such redress as the law affords in such cases. Ser [p. 455] vice was made and the respondents appeared and demurred to the libel for several causes, of which the following are the most material in this investigation : (1) That the District Court had no jurisdiction of the subject-matter alleged in the libel. (2) That neither the acts of Congress nor the admiralty rules of practice promulgated by the Supreme Court apply in the courts of the territory.

Jurisdiction of the territorial Supreme Court cannot be successfully denied if it be established that the original jurisdiction of the cause was vested in the District Court, as the organic act provides that writs of errors, bills of exception, and appeals 8 all be allowed in all cases from the final decisions of said [p. 456] District Court to the Supreme Court, under such regulations as may be prescribed by law, from which it follows that the present investigation is necessarily limited to the inquiry whether the District Court had jurisdiction to hear and determine the controversy.

Such jurisdiction of the territorial district courts within the [p. 457] respective districts is made co-extensive with both the Federal circuit and district courts, for reasons which will be obvious to any one who will compare the two sections, one with the other, in their practical operation. Two classes of courts are created in the Federal system for the exercise of the necessary original jurisdiction, but in the territory, as provided in the organic act, there is but one class of courts created for that purpose. Had Congress limited the jurisdiction of the territorial district courts to that exercised by the Federal district courts, then those courts could not have taken cognizance of controversies in patent cases nor of crimes or offences against the authority of the United States, where the punishment is death, and if their jurisdiction had been limited to that exercised by the dircuit courts, then those courts would have had no cognizance whatever of admiralty and maritime causes, or of seizures on water where the proceeding is according to the course of the admiralty law.

Argument to show that jurisdiction in admiralty cases is properly exercised by the Federal district courts under the ninth section of that act is quite unnecessary, as every one knows that jurisdiction in such cases has been exercised by those courts under that provision from the passage of the act to the present time, with the sanction of every Federal court organized pursuant to the Constitution and the laws of Congress. Doubt at one time was suggested whether those courts could properly exercise judicial cognizance in prize cases, inasmuch as the section does not in terms confer such jurisdiction, but the Supreme [p. 458] Court held that prize was a branch of the admiralty and that as such jurisdiction was vested in the district courts by the ninth section of the judiciary act. The Admiral, 3 Wall. 609, 612 ; Glass v. Sloop Betsey, 3 Dall. 16.

Cotton in bales to a large amount was shipped at New Orleans for transportation to Havre de Grace, and it appears that the ship was wrecked off Florida, from which the cotton was saved and was carried to Key West, where it was sold by order of the Territorial Court to satisfy a claim for salvage amounting to seventy-six per cent of the property saved. Prior to the loss the shippers had effected insurance, and they abandoned the same to the underwriters. Part of the cotton subsequently arrived at Charleston, when the underwriters [p. 459] libelled the same as their property by virtue of the abandonment. Hearing was had and the District Court pronounced the proceeding of the Territorial Court at Key West a nullity, and ordered the property to be restored to the libellants, subject to a certain deduction for salvage. Both parties appealed to the Circuit Court, where the decree of the District Court was reversed and a decree entered restoring the cotton to the claimant, when the libellants appealed to the Supreme Court.

Existing territories are all organized under organic acts containing similar provisions, and in most or all the Federal power is vested in a supreme court, district courts, probate courts, and Justices of the peace; and the organic act of each describes the jurisdiction of the district courts in substantially the same [p. 460] language, which is also found in the organic acts of former territories since admitted as States.

Instances where such jurisdiction has been exercised by t e [p. 461] territorial district courts under such acts are numerous, and they extend from the time our territorial system was organized to the present time, and the power has always been exercised without challenge from any quarter and without the least doubt of their constitutional or legal authority. Were the meaning of the act doubtful, which cannot be admitted, the rule is universal that the contemporaneous construction of such a statute is entitled to great respect, especially where it appears that the construction has prevailed for a long period, and that a different interpretation would impair vested rights — contemporanea expositio est fortissima in lege. Sedgw. Stats. (2d ed.) 213.

Prior to the recent act of Congress no provision was ever enacted for a trial by jury in an admiralty cause, and it 18 so clear that the existing provision does not afford any countenance to the complaint of the respondents, in view 0 the facts disclosed in the record, that it is not deemed [p. 462] necessary to give the subject any further consideration. 18 Stat. 315.

Persons transported in such conveyances contract with the proprietors or owners of the conveyance and not with their [p. 463] agents as principals, and the question of the liability of the proprietor or owner is wholly unaffected by the fact that the defective ship, car, engine, or other apparatus was purchased of another, if the defect is one that might have been discovered by any known means.

Exceptions were filed in the District Court setting forth the evidence, which was sent up to the Supreme Court with the transcript. Due appeal having been taken by each party, the cause was heard in the Supreme Court upon the findings and evidence made and given in the court of original jurisdiction, and sent up with the transcript, together with the evidence adduced in the appellate court. Application for a rehearing was made in the Supreme Court, which was denied, and the Supreme Court made an extended finding of facts as [p. 464] showing the basis of their judgment. Without entering into those details, it must suffice to say that it shows conclusively that the complaint of the respondents, that the amount allowed is excessive, is not well founded, and is therefore overruled.