Argument for Plaintiff in Error.

208 U.S.

exclusive jurisdiction of all the property involved in this case was in the Federal court from the time of the appointment of the receivers in May, 1884, and that as the Federal court has never relinquished such jurisdiction, the state court could have no jurisdiction to determine the questions presented in this case; also that the state court completely failed to give due force and effect to the decree of foreclosure entered in the Federal court on March 23, 1889.

The provisions of the decree of March 23, 1889, indicate a clear intention on the part of the Federal court to retain the final adjudication of all existing questions respecting this property, and there can be no question as to the power of the court to render a decree with such reservations. Julian v. Central Trust Company, 193 U. S. 93.

Under the reservations in the decree relating to the claim of James Compton, in view of the facts, it is perfectly clear that this property is still within the exclusive jurisdiction of the Federal court, and that while there, no state court could take jurisdiction for the purpose of ascertaining claims against it. Hagan v. Lucas, 10 Pet. 400; Williams v. Benedict, 8 How. 107, 112; Peale v. Phipps, 14 How. 375; Yonley v. Lavender, 21 Wall. 276; Barton v. Barbour, 104 U. S. 126; Wiswall v. Simpson, 14 How. 126; Pulliam v. Osborne, 17 How. 471; Freeman v. Howe, 24 How. 450; People's Bank v. Calhoun, 102 U. S. 256; Porter v. Sabin, 149 U. S. 473; Bispham's Equity, § 413; French, Trustee, v. Hay, 22 Wall. 250.

The Wabash Railroad Company, the plaintiff in error, has fully preserved all the questions under the decree by its pleadings in this cause. The Federal questions of the prior and exclusive jurisdiction of the Federal courts, resulting from the litigations in the Federal courts, and the decree of March 23, 1889, were presented upon the pleadings at every stage of the case to the state court, and were by the state court denied, and therefore the questions are fully presented upon the record justifying their consideration by this court.

The state court failed to give due force to the decree of the

208 U. S.

Argument for Defendants in Error.

Circuit Court for the District of Indiana in the case of Ham v. Wabash, St. Louis and Pacific Railway, which decree was a final and conclusive adjudication of all the issues in this case.

This Ham suit in Indiana, in July, 1880, whatever may have been its character prior to that time, became, in view of the allegations of the amended and supplemental bill then filed, distinctively a class suit on behalf of all the holders of equipment bonds.

The decree of the Circuit Court in the Ham suit, entered in accordance with the mandate of this court, was not a voluntary dismissal of the bill without prejudice on complainant's motion, nor is it an involuntary non-suit simply, but is a decree upon the merits of the contention, a decree in favor of the defendants against the complainant in that suit, finding authoritatively the absence of equity in the complainant's case, and concluding the complainants, and all of the class represented by them as to the merits of the questions involved in that litigation. Such is the proper form of a final decree in equity. It finds the equity of the case with the defendants, and dismisses the plaintiff's bill with costs to the defendants. 3 Daniel, Chy. Pldgs. (5th ed.), 2355, 2356; Ordinances of Lord Bacon, No. 13; Barton's Suit in Equity (p. 207); Swan Land & Cattle Co. v. Frank, 148 U. S. 603; Kendig v. Dean, 97 U. S. 423, 426.

Mr. John W. Warrington, with whom Mr. John C. F. Gardner, Mr. Thomas B. Paxton, Junior, and Mr. Murray Seasongood were on the brief, for defendants in error:

Since this case is brought here upon a writ of error to the Supreme Court of a State, "there must be some fair ground for asserting the existence of a Federal question." It is not enough to show that the claim of a Federal question was set up. New Orleans Water Works Co. v. Louisiana, 185 U. S. 336.

The Federal question asserted must have merit. Swafford v. Templeton, 185 U. S. 487.

No question was made by the lienors as to the validity of

Argument for Defendants in Error.

208 U. S

the foreclosure decree or the deed made in pursuance of it, or as to the regularity of the proceedings under which the order and deed were made, and it is admitted that the purchasers took all the title that the defendants in the foreclosure suit possessed. The judgments of the Ohio courts go no further than the claim made by defendants in error. The most that was claimed or decided in Ohio, was that the Federal court decree could not be so made as to impair or affect the lien of defendants in error, because they were not parties to the suit. Avery v. Popper, 179 U. S. 305, 314.

The reference to Compton's claim in the decree did not show a purpose to retain jurisdiction for all purposes. This court has decided that Compton's claim was really disposed of in the above mentioned decree. Compton v. Jesup, 167 U. S. 1, 31, at p. 31; Julian v. Central Trust Co., 193 U. S. 93, discussed and distinguished.

As to the contention that a Federal question arises because the Ohio courts did not, as alleged, give due effect to the judgment of the Circuit Court of the United States in the Ham suit it need only be said that before any question could arise here as to what effect the Ohio courts in this cause gave to the judgment of dismissal in the Ham case, this court would have to determine whether the Ham suit was a class case. It is a question of general law, not a Federal matter, whether the Ham case was a class suit. If it was not, then the defendants in error could not be bound by it at all; nor were the courts of Ohio obliged to acquiesce in the judgment of dismissal of the Federal court in Indiana. Winona & St. Peter Railroad v. Plainview, 143 U. S. 371, at 390.

The receivership and foreclosure proceedings in the Federal courts from 1884 to July, 1889, have no effect upon the case at bar, which was begun in the Ohio courts prior thereto, and the issues were not finally made up or trial had of the case in the state court until after the receivership and foreclosure proceedings had ended and the property been conveyed and delivered to the plaintiff in error. Farmers' Loan &c. Co. v. Lake

Street &c. Co., 177 U. S. 51, 61; Louisville Trust Co. v. Knott (1904), 130 Fed. Rep. 820, at p. 824, per Lurton, Severens and Richards, JJ.; Zimmerman v. So Relle (1897), 80 Fed. Rep. 417, at p. 420, per Sanborn, Thayer and Lochren, JJ.

The possession and exclusive control of the Wabash property ended in the United States courts when the property was conveyed by the master commissioners to the purchasing committee and the receivers were discharged.

The Adelbert College and the cross-petitioners, defendants in error, were not parties to the Ham suit; said suit was never a representative suit, and the result of said suit is not a bar to the assertion and validity of the claims of defendants in error.

MR. JUSTICE MOODY delivered the opinion of the court.

In 1862 the Toledo and Wabash Railway Company owned and operated a railroad in Ohio and Indiana, and was incorporated under the laws of both States. That part of the property situated in Ohio was then incumbered by two mortgages, one to the Farmers' Loan and Trust Company for $900,000, and one to Edwin D. Morgan, Trustee, for $1,000,000. That part of the property situated in Indiana was then incumbered by two mortgages, one to the Farmers' Loan and Trust Company for $2,500,000, and one to Edwin D. Morgan, Trustee, for $1,500,000. In that year the company issued and sold unsecured sealed negotiable notes to the amount of $600,000, called equipment bonds. In 1865 this company consolidated with certain Illinois railroad corporations, thus creating the Toledo, Wabash and Western Railway Company. This consolidation was authorized by and in part effected under a statute of Ohio. The holders of the equipment bonds have contended that the result of this consolidation was to give to these hitherto unsecured obligations an equitable lien upon the property of the corporation which issued them, and that the equity of redemption of that property went into the hands of the consolidated corporation incumbered by that lien. Upon this

question this court and the Supreme Court of Ohio have, in the past, arrived at opposite conclusions; this court holding (Wabash, St. Louis & Pac. Ry. v. Ham, 114 U. S. 587), that the equipment bonds remained unsecured, and the Ohio court holding (Compton v. Railway Co., 45 Ohio St. 592), that the effect of the consolidation was to create the lien claimed. This suit was brought by the defendants in error, holders of some of the equipment bonds, in the courts of Ohio for the purpose of enforcing the lien stated. They prevailed by the judgment of the Supreme Court of the State, which affirmed a decree of a lower court establishing the indebtedness upon the bonds, declaring a lien to secure the payment of that indebtedness upon the property owned, subject to the mortgages hereinbefore stated, by the Toledo and Wabash Railway Company in 1865, and directing a sale of such of that property as was within the State of Ohio in satisfaction of the lien.

The case is here upon a writ of error to the Supreme Court of Ohio to review this judgment. There are two Federal questions, it is contended, which were erroneously decided in the court below. The plaintiff in error insists: First, that the Ohio court had no jurisdiction to render the decree entered in the case, because the property affected by that decree was in the possession of a Circuit Court of the United States, and the questions litigated in this case were within the exclusive jurisdiction of the latter court. Second, that the decree of the Circuit Court of the United States for the District of Indiana in the case of Ham v. Wabash, St. Louis & Pacific Railway Company was a final adjudication of the issues in the case at bar, binding upon the defendants in error, and conclusive against their right to maintain this suit. The defendants in error contend that these questions were not properly raised in the court below, or, if properly raised, that they are so unsubstantial as to be frivolous, and therefore move that the writ of error be dismissed. But the questions were clearly presented by the answer in the Ohio courts, the decree rendered could not have been made without deciding them against the contention of the railroad