Johnson Co. v. Henderson

Briscoe, J., delivered the opinion of the Court. On the 20th of June, 1892, the Tennallytown and Rock-ville Railroad Company, operating a line of electric railroad from the District of Columbia to Bethesda Park, in Montgomery County, Maryland, conveyed to Messrs. Plenderson and Browne, trustees, its railway, equipment, personal and real property to secure a first mortgage indebtedness of $2 5,000. Default having been made in its payments, the trustees were required by the holders of the securities to advertise the property for sale, which was done according to ¹²⁶ the terms of the first deed of trust.

Subsequently, the appellant, the Johnson Company, a corporation duly incorporated under the laws of the State of Pennsylvania, and a junior creditor of the railroad company, obtained an injunction restraining the sale. The case was afterwards heard upon bill and answer, and this appeal is from an order of the Court dissolving the injunction. It is clear that when a case is heard upon bill and answer, if the answer denies the equity of the bill, the injunction as a general rule will be dissolved. So the only question here is, do the answers deny the equity relied on in the bill ?

The bill alleges that the appellant is a judgment creditor for the sum of $7,882.40, and also the holder of certain second mortgage bonds of the railroad company, which are secured by a second deed of trust bearing date on the 8th of April, 1893, covering the property of the railroad company. Both of these claims are subsequent in date to those secured by the deed of trust under which the property was advertised; And the plaintiff alleges the following grounds of equitable relief; 1. That two of the defendants, Messrs. Crosby and Lieb, being the owners of the Georgetown and Tennallytown Railroad, purchased the first mortgage notes for $13,000, described in the bill of complaint, in order that they might by oppressive foreclosure proceedings acquire the property and franchises of the said Tennallytown and Rockville Railroad at much less than its real value, and with that end in view has endeavored to deter persons likely to bid from bidding. 2.

That the defendants, Crosby and Lieb, claimed the right to fix the terms ■ of sale, and purposely made them so onerous and