by John Marshall Harlan, California v. Southern Pacific Company…
“ A suit to foreclose a second mortgage upon the property of a corporation might result in a decree declaring that the corporation was without power to give any mortgage whatever upon its property. But that decree would not conclude the parties interested in a first mortgage, who were not in court, nor represented by the trustee named in the mortgage under which they claimed. So a decree as between California and the Southern Pacific Company would not conclude outside persons neither admitted as parties, nor permitted to appear and be heard in respect of their rights. ”
