City Trust Co. v. Sedalia Light & Traction Co.

Citations

• 195 F. 845
• 1912 U.S. Dist. LEXIS 1689

Syllabus

<p>1, Receivers (§ 158*)—Claims Entitled to Priority Over Mortgage.</p> <p>Defendant company, which operated sm electric plant and street railroad, executed a mortgage to secure bonds covering all of its property and franchises, including after-acquired property and its income and earnings, and authorized the trustee in case of default to take possession of the property and appropriate said earnings. A foreclosure suit was instituted l>.v the trustee, in which receivers were appointed who operated the property. Defendant had contracted with a railroad company to pay the latter one-half the cost of maintaining flagmen at a crossing, and the railroad company intervened, setting up a claim for sums due under the contract at the time of the appointment of the receivers.. A coal company also intervened, setting up a claim for coal sold the defendant. The order appointing the receivers made no reservation in favor of other creditors. Held that, in the absence of special circumstances creating equities in their behalf, the claims of the interveners were not entitled to priority of payment over the mortgage debt for which such earnings were pledged.</p> <p>TE'd. Note.—For other cases, see Receivers, Cent. Dig. §§ 301-306; Dec. Dig. § 158.*]</p> <p>2. Receivers {§ 158*)—Claims Entitled to Priority Over Mortgage.</p> <p>A street railroad company appealed from a judgment recovered against it for damages for a personal injury, giving a supersedeas bond. Pending- the appeal receivers were appointed for its property, under a mortgage covering both its property and earnings, and, on affirmance of the judgment, the surety on the supersedeas bond was compelled to pay it. Held, that the appeal was a protection to the security of the bondholders, and that the surety was entitled to repayment from the earnings of the receivership ahead of the mortgage debt.</p> <p>(Ed. Note.—For other cases, see Receivers, Cent. Dig. §§ 301-306; Dec. Dig. § 158.*]</p>