United States Trust Company of New York v. Mexico
Statement by Mr. Justice Brewer: On July 16, 1895, the United States Trust Company of New York filed its bill in the office of the clerk of the district court of the second judicial district of the territory of New Mexico, praying foreclosure of a mortgage given by the Atlantic & Pacific Railroad Company. On January 10, 1896, Charles W. Smith was appointed receiver. On April 10, 1896, a decree of foreclosure was entered. The decree provided that the purchaser or purchasers, and his or their successors or assigns, should, as part consideration and purchase price of the property purchased, and in addition to the sum bid, pay-'any indebtedness and obligations or liabilities which shall have been legally contracted or incurred by the receiver before delivery or possession of the property sold, including the receiver's notes or certificates hereinbefore mentioned, and also any indebtedness and liabilities contracted or incurred by said defendant railroad company in the operation of its railroad prior to the appointment of receivers, which are prior in lien to said first mortgage, and which shall not be paid or satisfied out of the income of the property in the hands of the receiver, upon the court adjudging the same to be prior in lien to said mortgage, and directing payment thereof, provided that suit be brought for the enforcement of such indebtedness, obligation, or liability within the period allowed by any statute of limitations applicable thereto.

 * *

'Any such claim for indebtedness, obligations, or liabilities which shall not have been presented in writing to the receiver or filed with the clerk of this court prior to the time of delivery of possession of such property shall be presented for allowance, and filed within six months after the first publication by the receiver of a notice to the holders of such claims to present the same for allowance. The receiver shall publish such notice at least once a week for the period of six weeks, in one or more newspapers published in Albuquerque, New Mexico, Prescott, Arizona, and Los Angeles, California, upon the request of any purchaser or purchasers after delivery of the possession of the property to them; and any such claims which shall not be so presented or filed within the period of six months after the first publication of such notice shall not be enforceable against said receiver nor against the property sold, nor against the purchaser or purchasers, his or their successors or assigns.'

On May 3, 1897, a sale was made under the decree to A. F. Walker, R. Somers Hayes, and Victor Morawetz. On May 4 the sale was confirmed. The order of confirmation contained substantially the same provisions respecting payment of obligations as the decree, and added, 'including also any taxes which may finally be adjudged to be a lien upon the property sold under the decree aforesaid.'

According to an affidavit filed in the case this clause was entered at the suggestion of counsel for the territory, and upon notice in open court of his intention to present a claim for the taxes hereinafter referred to. On June 22, 1897, the purchasers conveyed the property to the Santa Fe Pacific Railroad Company, and on July 1, 1897, the receiver delivered possession of the property. On October 4, 1898, he was by order of the court discharged as receiver. He failed to give the notice required by the decree for the purpose of cutting off claims against the property, and on application of the Santa Fe Pacific Railroad Company, the grantee of the purchasers, on December 19, 1898, an order was entered directing the clerk of the court to publish the notice, and a notice was published that on or before October 23, 1899, all claims against the receiver must be presented or they would be barred. On June 10, 1897, after the confirmation of the sale, but while the property was in possession of the receiver, the territory of New Mexico, by leave, filed an intervening petition claiming a lien for and payment by the receiver of certain taxes upon part of the railroad property in the county of Valencia. To this petition the trust company and receiver, on June 23, 1897, filed joint and several pleas. On the same day, without passing upon the sufficiency of the pleas, the court ordered the intervening petition dismissed on the ground that the 'matters and things therein set up' were 'not sufficient to entitle the said intervening petitioner to the relief sought by its petition.' On appeal to the supreme court of the territory this order of dismissal was affirmed. From such decision the territory appealed to this court, which upon the first hearing affirmed the rulings below (172 U.S. 171, 186, 43 L. ed. 407, 412, 19 Sup. Ct. Rep. 128), but on a petition for rehearing reversed the order and remanded the case for further proceedings. 174 U.S. 545, 43 L. ed. 1079, 19 Sup. Ct. Rep. 784.

The mandate having been returned and presented to the trial court on August 4, 1899, proceedings were there had which culminated, on October 5, 1899, in a finding that the territory was entitled to a tax lien upon a portion of the railroad property for $74,168.70, and a decree establishing such lien. From this decree both parties appealed to the supreme court of the territory, which, on August 23, 1900, modified the decree by reducing the amount to $61,922.73, and awarding interest at the rate of 6 per cent per annum from October 5, 1899, the date of the decree in the district court. 62 Pac. 987. From this decision both parties have appealed to this court.

A statement of facts agreed to by the parties was filed in the district court, and upon this statement the decree was founded. This agreed statement contains a narrative of facts, transcripts of records and the tesimony which certain witnesses would have given if they had been produced and sworn. This statement of facts was incorporated in the record transmitted to the supreme court of the territory, and is the only portion of the record showing the facts presented on the hearing in the district court. After the decision by the supreme court of the territory, both parties having signified an intention to appeal to this court, the territory applied for a statement of facts in accordance with the act of Congress of date April 7, 1874, in reference to practice in territorial courts and appeals therefrom (18 Stat. at L. 27, chap. 80), which application was resisted by the counsel for the trust company and the receiver on the ground that the case had been tried in the court below upon an agreed statement of facts, whereupon the supreme court made this entry of record:

'Being willing and desirous that the respective parties be allowed to get their appeals before the Supreme Court of the United States in such shape as their counsel deem proper, the court hereby certifies for use upon the appeal of the said The United States Trust Company of New York and C. W. Smith, receiver, that this case was tried in the court below upon an agreed statement of facts, which agreed statement of facts was made part of the record in the district court and part of the record upon appeal to this court, and is to be a part of the record on appeal to the Supreme Court of the United States; that the said agreed statement sets out the facts of this case which were heard or considered by this court upon said appeal, and the same is hereby adopted by this court as its statement of such facts for use upon the appeal aforesaid, without here repeating the same.

'And the court further certifies for use upon the appeal of the said territory of New Mexico, in accordance with the prayer of the said appellant, the following statement of facts.'

Following this was a special statement of facts, certified to under the hand of the Chief Justice.

Mr. Justice Brewer delivered the opinion of the court: 

Notes
United States Supreme Court decisions on taxation Automated categorization