Bank of Commerce v. Central Coal & Coke Co.

Citations

• 115 F. 878
• 53 C.C.A. 334
• 1902 U.S. App. LEXIS 4259

Syllabus

<p>1. Railroads — Foreclosure of Mortgage — Priority as between Receiver’s Certificates.</p> <p>It is the duty of the court to pay indebtedness which it has authorized its receiver to contract in the administration of railroad property, before any indebtedness of the company, from the proceeds of the property, and receiver’s certificates representing such indebtedness are entitled to-priority of payment over those issued by order of the court for preferential debts of the company.</p> <p>2. Same — Construction of Decree.</p> <p>A provision of a decree foreclosing a railroad mortgage, and directing-a sale of the property, that the fund arising therefrom, after payment of costs, etc., shall be applied “(3) to the payment of all interventions or other claims heretofore or hereafter to be allowed * * * as superior to the lien of the bonds, * * * or, if the fund realized be not sufficient to pay the same,-then to the payment of the same pro rata,” does not apply to receiver’s certificates issued by direction of the court in payment of indebtedness it has itself contracted in the operation of the property, but should be construed as referring only to claims against the railroad company; and it does not put it out of the power of the court to thereafter deal with the question of the priority of such certificates under a general provision of the decree passing the cause “for further orders.”</p>