Kneeland v. American Loan & Trust Co.

Citations

• 136 U.S. 89
• 10 S. Ct. 950
• 34 L. Ed. 379
• 1890 U.S. LEXIS 2201

Syllabus

<p>A party bidding at a foreclosure sale of a railroad makes himself thereby a party to the proceedings, and subject to'the jurisdiction of the court for all orders necessary to compel the perfecting of his purchase; and with a rightjo be heard on all questions thereafter arising, affecting his bid, which are not foreclosed by the terms of the decree of sale, or are expressly reserved to him by such decree.</p> <p>Where not concluded by tbe terms of a decree of foreclosure of a railroad, any subsequent rulings which determine in what securities, of diverse value, the purchaser’s bid shall be made good, are matters affecting his interests, and in which he has a right to be heard in the trial court, and by appeal in the appellate court.</p> <p>The appointment of a receiver of a railroad vests in the court no absolute control of the property, and no general authority to displace.vested contract liens, and when a court makes such an appointment it has no right .to, make the receivership conditional on the payment of any unsecured claims except the few which by the rulings of this court have been declared to have an equitable priority; it being the exception and,not the rule that the contract priority of liens can be displaced.</p> <p>A court which appoints a receiver acquires, by virtue of that appointment, certain rights and assumes certain obligations, and the expenses which the court creates in discharge of those obligations are necessarily burdens on the property taken possession of, and this, irrespective of the ques- . tion who may be the ultimate owner, or who may have the preferred lien, or who may invoke the receivership.</p> <p>When a court appoints a receiver of railroad property it may, in the administration, contract debts necessary for operating the road, or for labor, supplies or rentals, and make them a prior lien on the property.</p> <p>When, at the instance óf a general creditor, a receiver of a railroad and its rolling stock is appointed, and among th