Clarke v. Central Railroad & Banking

Citations

• 54 F. 556
• 1893 U.S. App. LEXIS 2487

Syllabus

<p>1. Receivers — Power to Make Loins and Pledge Assets.</p> <p>Where a bill was filed by the president and directors of a railroad company, alleging that, as a result of an unlawful lease and the diversion of its income, it has been embarrassed, but, if properly managed, it may extricate itself from its difficulties, and the court appoints its president receiver for the purpose of preserving the property, and with the aid of the court placing it upon a prosperous footing, and no lien creditors are parties, it is competent for such president receiver, with the authority of the court, to pledge collateral and equitable assets of the company to secure loans necessary to its oxieration, and also to incur a liability for the expenses of a refunding scheme.</p> <p>2. Same — Rights of Lieu Creditors.</p> <p>If, however, before such expenses are paid, creditors holding liens upon the property are made parties, the court will not ex parte allow the expenses of such refunding scheme to be paid by the receiver.</p> <p>(Syllabus by the Court.)</p>