Southern Ry. Co. v. Ensign Mfg. Co.

Citations

• 117 F. 417
• 54 C.C.A. 591
• 1902 U.S. App. LEXIS 4449

Syllabus

<p>1. Contract—Parties—Purchase of Railroad Equipment by Lessee.</p> <p>The general purchasing agent of a railroad company ordered certain equipment to be furnished to his company from a manufacturer with whom he customarily dealt, but directed the bills therefor to be made against another company, whose lines his own company operated under a lease. Such lease provided that where new equipment was needed, and was agreed on between the two companies, the same should be furnished by the lessor; but it did not appear that any such agreement was made with respect to that in question. The equipment was shipped as ordered. Held, that the lessee, and not the lessor, was the purchaser.</p> <p>2. Railroads—Receivership—Preferential Debts.</p> <p>Three things are necessary in order to give a claim for supplies against a railroad company, in the hands of a receiver, a preference over the mortgage lien: (1) That the supplies furnished must be of that ordinary character necessary for operating a railroad and keeping the mortgaged property a going concern; (2) that the person furnishing them relied upon the interposition and protection of his equity by the court, and did not contract upon the personal responsibility of the railroad company; (3) that the debt was contracted but a short time before the appointment of the receivers, and was left unpaid because of the sudden action of the court in making such appointment.</p> <p>8. Same.</p> <p>One furnishing car wheels under a contract with a railroad company, relying upon being paid for the same in 60 or 90 days in accordance with a previous course of dealing, and with knowledge that they were to be used in repairing the equipment of a leased road, while he has a legal claim therefor against the company, has no equity which entitles him to preference of payment over its mortgagees, whose mortgages do not include the leased road, and where the receivers appointed in the foreclosure suit did not take possession of, nor operate, the s