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was against public policy that it should. As the plant could not be separated from the franchise by any adverse process, there could be no lien by judgment on it. That was the settled law of the state, and this court could not do otherwise than follow the decision of the supreme court of Wisconsin. Improvement Co. v. Wood Co., 81 Wis. 559, 51 N. W. 1004, 17 L. R. A. 92; Fond du Lac Water Co. v. City of Fond du Lac, 82 Wis. 332, 52 N. W. 439, 16 L. R. A. 581; Chicago & N. W. Ry. Co. v. Forest Co., 95 Wis. 80, 70 N. W. 77; Chapman Valve Mfg. Co. v. Oconto Water Co., 89 Wis. 264, 60 N. W. 1004, 46 Am. St. Rep. 830.

In announcing its opinion in the Chapman Valve Mfg: Co. Case, supra, the supreme court of Wisconsin was simply enforcing the logic of its own prior rulings,-that the franchises and rights of a quasi public corporation, owing important duties to the public, and the property vested in it necessary for their use and enjoyment and the accomplishment of the purposes for which it was created, constitute an entirety, and, in the absence of special statutory authority, are not subject to be seized and sold on execution, or for mechanics' liens, or on tax process. Chicago & N. W. Ry. Co. v. Forest Co., 95 Wis. 80, 70 N. W. 77. The same principles were delivered by the supreme court of the United States in Buncombe Co. v. Tommey, 115 U. S. 122, 5 Sup. Ct. 1186, 29 L. Ed. 305, and Railway Co. v. Doe, 114 U. S. 310, 5 Sup. Ct. 869, 29 L. Ed. 136. So that it is stare decisis, as well as res adjudicata, that the statute of Wisconsin gives appellant no lien on this property,—the visible property or the franchise. Andrews v. Pipe Works, 22 C. C. A. 110, 76 Fed. 166, 36 L. R. A. 139; Id., 23 C. C. A. 454, 77 Fed. 774, 46 U. S. App. 619, 36 L. R. A. 153; National Foundry & Pipe Works v. (conto City Water Supply Co., 105 Wis. 48, 81 N. W. 125. This last case affirms a judgment which determines that the appellant has not, and never has had, a lien on the plant and franchise, and that the Oconto City Water Supply Company owns the property by purchase from Andrews & Whitcomb under the foreclosure sale, by title paramount to, and free and clear of any claim or lien of, appellant. This might well have ended the litigation. If the appellant had no lien either prior or subject to the title of the water supply company, on what substantial ground could it claim a right to redeem the property from sale under the Andrews & Whitcomb mortgages ? The appellant having no lien in fact, it was merely a general creditor of the water company, which it had trusted with material to go into the plant, and could not have been properly made a party to the foreclosure proceedings. Stout v. Lye, 103 U. S. 66, 26 L. Ed. 428; Herring v. Railroad Co., 105 N. Y. 340, 12 N. E. 763. As was said by the court below in its opinion in this case :

"The contention on behalf of complainant that the construction of the lien statute adopted by this court in the rendition of that judgment, which was affirmed on appeal (7 C. C. A. 603, 59 Fed. 19, 18 U. S. App. 382), being prior to the ultimate construction by the supreme court of the state, must control as a rule of decision up to the time of the final utterance, is opposed to the express ruling in Andrews v. Pipe Works, supra, and is not consistent with the rule stated recently by the United States supreme court in Wade v.

Travis Co., 174 U. S. 499, 19 Sup. Ct. 715, 43 L. Ed. 1060. In the absence of a lien or title in fact, there can be no right to redeem. It is true that a mortgagee during the continuance of that relation is not permitted to contest the bona fides or validity of an actual conveyance from the mortgagor upon which to predicate the right. Even before foreclosure the mortgage cannot be subjected to payment or redemption by one who is in the status of a mere stranger to the title; and certainly the purchaser under a valid foreclosure may dispute either the fact of an interest acquired in the equity of redemption, or of the existence of such equity. Of the numerous cases cited in support of such right in the case at bar, none appear applicable."

The contention that the lis pendens filed in the lien suit puts the appellant in a position to demand redemption from sale under the foreclosure is also without foundation. It is true that by the lien action the parties were brought within the jurisdiction of the court, so that the lis pendens would bind any intermediate purchaser taking an interest from either party as a volunteer. But there is no warrant for saying that a like rule is applicable to the institution and completion of foreclosure proceedings by a mortgagee either in the same or some other court of co-ordinate jurisdiction. The opinion of this court by Judge Woods rendered on the decision of the motion for a rehearing when the case was here before (see Andrews v. Pipe Works, 23 C. C. A. 454, 77 Fed. 774, 46 U. S. App. 619) seems to be conclusive of this question. As there said:

"These defendants were not volunteer purchasers intervening as strangers. They purchased upon the foreclosure of their own mortgage, which antedated the commencement of the suit of the lienholders, and the title which they obtained related back to the date of their mortgage. The doctrine of lis pendens, as we conceive, does not apply."

If one decision of the same question is enough, then the appellant should be satisfied with that determination, which was made upon argument and consideration. The question was there fully presented upon the record, and there seems no reason to suppose any need to reargue the question in a new case. But upon the merits of the question we are satisfied that the lien decree was not operative in any such way, or in any way that has been suggested, to disturb or affect the title taken under the foreclosure. The mortgagees were the only persons having a lien upon the plant. At any rate, if there were any others, they are cut off by the foreclosure. They had advanced the amount of their mortgages in cash, which went into the construction of the waterworks plant. By their action and enterprise, and only thereby, was the plant saved to the city and to the people. The equities are all in favor of their grantee. Their mortgages were foreclosed, and all persons having any interest were made parties. They bid in the property for the full amount of their claim for money advanced, and for its full value, and sold to the water supply company.

There is some ground for the charge that the appellant has been blowing hot and cold with reference to its claims to this property, and that its positions in the same suit, even, are inconsistent with one another. The creditors' suit was grounded on the claim of a paramount title, and, as we have seen, if the appellant had had any lien at all, it would be paramount. But this court and the state court both held, as to these appellees, it had no lien at all, either paramount or subordinate. After that litigation ended by the dismissal of its bill, this suit was brought, which cannot obtain unless the appellant's lien is subject and subordinate to the appellees' title. In the former suit appellant set up the lien decree, sale and marshal's deed, and the foreclosure of the mortgages in the state court, claiming a conditional title, to wit, an absolute title unless appellees paid its debt. In the present suit, upon the same facts, it claims a conditional title, but with a totally unlike condition, viz., that it pay appellees' debt. These remedies are quite inconsistent, but much akin in this: that they are equally unfounded. It may be quite doubtful whether the appellant can be allowed to pursue such contradictory remedies upon the same facts. If it can, there is no reason why litigation cannot be continued so long as counsel can suggest new points and make fresh presentations. It was held by the supreme court in Robb v. Vos, 155 U. S. 13, 15 Sup. Ct. 4, 39 L. Ed. 52, that where a party has two remedies inconsistent with each other, any decisive act by him, done with knowledge of his rights and of the facts, determines his election of his remedy. And in Green v. Bogue, 158 U. S. 478, 15 Sup. Ct. 975, 39 L. Ed. 1061, the supreme court held that:

"Where the facts averred and relied upon in a former suit between the same parties which proceeded to final judgment are substantially those alleged in the pending case under consideration, the fact that a different form or measure of relief is asked by the plaintiffs in the later suit does not deprive the defendants of the protection of prior findings and decision in their favor.”

See, also, Crook v. Bank, 83 Wis. 31, 52 N. W. 1131, 35 Am. St. Rep. 17; Franey v. Park Co., 99 Wis. 40, 74 N. W. 548.

If the appellant's title under the marshal's deed is paramount to the appellees', as it still claims all through its brief, there is no need of an action to redeem, which cannot be maintained but by one holding a junior incumbrance. The language of the statute is:

“Any person having a lien at any time before the sale upon the mortgaged premises, or any part thereof or interest therein, subsequent to the lien of such mortgage may redeem.” Section 3167, Rev. St. Wis. 1898.

And this is the law independent of statute. 2 Jones, Mortg. $ 1055; Dawson v. Overmyer, 141 Ind. 438, 40 N. E. 1065; Lysinger v. Hayer, 87 Iowa, 335, 54 N. W. 145; Compton v. Jesup, 15 C. C. A. 397, 68 Fed. 331; Moore v. Beasom, 44 N. H. 215. If its title is paramount, it has a complete remedy in ejectment, and a court of equity has no jurisdiction. If it has a lien subordinate to that of the appellees, which is also apparently claimed,-for the appellant asks the privilege of redeeming, from whence arises the lien, if not by virtue of the mechanic's lien laws of Wisconsin, which two courts have decided has no existence in fact or in law ?

Other contentions are made, which have been duly considered by the court, but which it seems unnecessary to notice. The appellant is in the peculiar attitude of asking this court to enforce a judgment against the appellees to which they were not made parties, and which it must be now conceded was erroneously rendered upon a mistaken view of the effect of the lien law of Wisconsin, and against the law and public policy of the state, as has now been declared by the highest authority. This the court cannot do. The court will not make haste to found a decree for new relief upon a previous decree which it must now be admitted was erroneous and contrary to the public policy of the state. Lawrence Mfg. Co. v. Janesville Cotton-Mills, 138 U. S. 552, 11 Sup. Ct. 402, 34 L. Ed. 1005; 2 Beach, Eq. Prac. & 904; O'Connell v. McNamara, 3 Dru. & War. 411; Gay v. Parpart, 106 U. S. 679, 27 L. Ed. 256; Lawrence v. Berney, 2 Rep. Ch. 127; Hamilton v. Houghton, 2 Bligh, 169.

We find no error in the record, and the decree of the circuit court is affirmed.

Note. Since the preparation of this opinion WOODS, Circuit Judge, departed this life, but he fully concurred in the opinion. The handing down of the opinion has been withheld until the case of National Foundry & Pipe Works v. Oconto City Water Supply Co., taken by writ of error to the United States supreme court from the decision of the supreme court of Wisconsin, should be decided. A decision by the United States supreme court in that case affirming the judgment of the supreme court of Wisconsin was handed down on January 6, 1902. 22 Sup. Ct. 111, 46 L. Ed.

(113 Fed. 804.)

In re SOUDAN MFG. CO.

STITES V. DUNNAHOO.
(Circuit Court of Appeals, Seventh Circuit. February 12, 1902.)

No. 828. 1. BANKRUPTCY-LIENS_VALIDITY.

Under Bankr. Act 1898, § 67d, which provides that "liens given or accepted in good faith and not in contemplation of, or in fraud upon, this act, and for a present consideration,

shall not be affected by this act,” the validity of a mortgage given to secure a present loan of money within four months prior to the borrower's bankruptcy does not depend upon his solvency at the time, or upon notice of his financial condition by the mortgagee, actual or constructive, but, to invalidate such a mortgage, it must be shown that the borrower was insolvent; that the purpose of the loan was to accomplish unlawful preferences, or otherwise violate the act; and that the lender knew, or was chargeable with

notice of, both of such facts. 2. SAME_MORTGAGE TO SECURE BORROWED MONEY.

A mortgage on the plant of a manufacturing corporation to secure a loan of money made in good faith by the mortgagee, who was wholly unacquainted with the company, and acted through an agent, upon representations made by the president of the company and the report of an agent sent to examine the security, is not rendered void by the bankruptcy act, where the company was at the time a going concern, and actively conducting its business, and not known by the lender or his agent to be insolvent, although it was in fact insolvent and became a bankrupt within four months, and although the mortgagee knew that a large part of the money borrowed was to be used in paying outstand

ing unsecured debts. 3. CHATTEL MORTGAGES-VALIDITY-INDIANA STATUTE.

Under the laws of Indiana, as construed by its supreme court, the fact that a chattel mortgagee verbally agrees at the time the mortgage is given that the mortgagor may sell certain of the property covered thereby for his own benefit does not invalidate the mortgage as to other property to which such agreement does not apply.

Appeal from the District Court of the United States for the District of Indiana.

This appeal is from a judgment of the district court, sitting in bankruptcy, in the matter of Soudan Manufacturing Company, bankrupt, on review of findings by the referee, whereby a mortgage lien claimed by Robert 1. Stites, appellant, against the plant, machinery, and tools of the bankrupt, is disallowed, and upon additional findings by the court the ruling of the referee that the mortgage "constitutes no valid existing lien on any of the property” of the bankrupt is affirmed. The Soudan Manufacturing Company, an Illinois corporation, had its plant, consisting of machinery, tools, and fixtures, at Elkhart, Ind., and was there engaged in the manufacture aud sale of bicycles, while its president, A. H. Winters, resided at Chicago, Illinois. The mortgage in question was executed August 1, 1900, to secure a present loan of $12,500 by the appellant for the purposes of the corporation, and was duly recorded prior to August 10, 1900, when a creditors' petition was filed for an adjudication of bankruptcy against the corporation. Iu the course of proceedings thereupon the appellant tiled his petition to have such mortgage declared a first lien upon the machinery, tools, and fixtures of the bankrupt with result as stated. The loan was made upon the mortgage security without previous business relations between the parties, with information that the corporation was carrying on an active business, was in need of funds to pay off existing indebtedness, especially to meet advances made by one Wehber, to furnish relief from present embarrassment and increase the output; and relying upon an investigation alone of the title to and apparent value of the machinery and fixtures, then in operation as a going concern, and upon general statements on the part of Mr. Winters, the president, with no examination of the books of the corporation or other investigation of its financial standing and ability.

Smiley W. Chambers and James D. Andrews, for appellant.
George H. Peaks and James L. Harman, for appellees.

Before JENKINS and GROSSCUP, Circuit Judges, and SEAMAN, District Judge.

SEAMAN, District Judge, after the foregoing statement, delivered the opinion of the court.

The proof is undisputed that the mortgage in question was made and accepted to secure a present loan by the appellant to the corporation of $12,500, and that previous to the negotiations for the loan no transactions had taken place and no acquaintance existed between the principals; but the validity of the mortgage is assailed upon two propositions: (1) That the corporation was insolvent, and by the transaction gave a preference to two of its creditors,—one being its president,-and the appellant received the mortgage with notice of such insolvency and purpose, thus violating the provisions of the bankruptcy act; (2) that the mortgage covered stock, manufactured and in process, with an understanding outside the terms of the instrument that sales could be made therefrom, by and for the exclusive use of the mortgagor, and the entire security was thus invalidated under the law of Indiana. Unless one or the other of these contentions is sustainable, the appellant is entitled to the relief sought by his petition, as jurisdiction to that end, if questionable, was not questioned, and the express submission amounts to consent. Bryan v. Bernheimer, 181 U. S. 188, 197, 21 Sup. Ct. 557, 45 L. Ed. 814.

1. The mortgagor corporation was insolvent in fact, if not so considered by its president, and obtained the loan for the purpose of

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