WARRINGTON, Circuit Judge
(after stating the facts as above). [1] 1. Appellant stands strictly upon the lien created by the mortgage. He admits that holders of bonds so secured may waive the lien, and indeed claims that all the holders of honds under the mortgage, except himself, have in fact waived the lien; but he insists that neither the acts of the other bondholders nor those of the trustee under the mortgage operated as a waiver of his lien. Appellant’s theory is that, having once obtained the benefit of the lien, he should not be deprived of it without his explicit consent. The basis of his position, as we understand the contention, finds expression in the rule concerning mortgages of private enterprises, as distinguished from decisions relating to mortgages of corporations of quasi public character, like railroads; stated otherwise, there is no necessity, for example, as respects the issuance of receivers’ certificates with priority of lien in working out financial embarrassments of purely industrial enterprises, similar to the public necessity existing under kindred embarrassments of common carriers of passengers and freight. It is to be observed, however, that this distinction concerns the power of a court to provide for supplanting a mortgage lien by an order authorizing the issue of receivers’ certificates, and not the right of the bondholder to surrender the benefit of the lien. Among the cases cited respecting the distinction mentioned are Doe v. Northwestern Coal & Transportation Co., 78 Fed. 62, 73 (C. C.); International Trust Co. v. Decker Bros., 152 Fed. 78, 83, 81 C. C. A. 302, 11 L. R. A. (N. S.) 152 (C. C. A. 9); In re J. R. & J. M. Cornell Co., 201 Fed. 381, 387 (D. C.); Hanna v. State Trust Co., 70 Fed. 2, 7, 16 C. C. A. 586, 30 L. R. A. 201 (C. C. A. 8). Decisions of this class, although dealing with mortgages of private corporations, usually recognize the right of the bondholder to give up or otherwise to waive the benefit of his lien; indeed, such decisions are in no wise opposed to the equitable principle that a bondholder may so conduct himself with respect to receivership proceedings as to preclude him from insisting that an order of the court is invalid for want of his affirmative consent. Union Trust Co. v. Illinois Midland Co., 117 U. S. 434, 463, 464, 6 Sup. Ct. 809, 29 L. Ed. 963. True, that case concerned railroad interests; and yet the contention there made touching lack of affirmative consent on the part of certain bondholders •is in principle analogous to the contention here urged; emphasis is given to the analogy by reason of the affirmative consent and sanction given by the present trustee to all the orders entered below in the belief, as we shall see, that it was acting with the approval of all the bondholders.
*369The truth is that appellant was put to an election whether he would .seasonably oppose or would abide by the orders entered from time to time in the receivership proceeding. He purchased the bonds from the plaintiff, Reynolds, in the very case from an order in which he appeals. Reynolds sold only part of his bonds to appellant, and was a bondholder as well as a stockholder during Ihe entire period of the receivership. Pernald & Co. owned the rest of ihe bonds. It was believed throughout by that company, by the trustee under the mortgage, by the receivers, as also by the court itself, that the Pernald Company and Reynolds owned the entire issue of the bonds. Appellant gave no intimation that he held the bonds in suit until the date fixed, September 25, 1916, to show cause why the property and assets of the mortgagor company should not be sold for $150,000. On that date, as we have seen, appellant caused a petition to be filed in the cause disclosing his ownership of $5,000 par value of the bonds; even then he did not object to the sale, although the consideration to he paid was $50,-000 less than the total issue of the outstanding bonds. Besides, the receivership proceeding had been commenced as a representative suit more than live years before, June 22, 1911; and no reason is perceived, none is even suggested, why appellant should not seasonably have appeared in the suit and interposed objections if he had any to the issue of the receivers’ certificates and the incurring of the. other obligations before they were sanctioned by the court. When speaking of appellant’s long concealment of his purchase of bonds and contrasting his conduct with that of the other bondholders, the learned trial judge said:
“ * * * Having kept silent and permitted the expenditure of these moneys, the issuance of the receivers’ certificates, with the priority which was attempted to be given (appellant) cannot now be heard to complain. He knev that the other bondholders were putting up the money and were financing this enterprise; that they were attempting to preserve the plant and. make it worth something, and to put it in a condition where it might be sold. He kept silent, not only as to his ownership of this portion of the bonds, but also as to any objection that he had to that proceeding, and, in equity, I do not think that he can claim at this time the benefits of what he permitted others to do. * * * He had notice of all the orders for the issuance, and of the issuance, of the receivers’ obligations, and still he kept silent until the money had been expended and until the enterprise proved to be a failure, and then he seeks to have himself preferred to those who have borne the burdens. I do not think that a court of equity can lend its aid to such a contention.” “
We approve these findings and the conclusion of the court. The appellant’s silence explains the fact that he did not consent to the issuance of the receivers’ certificates; that is, as we interpret the course he pursued, he did not affirmatively consent; but, unless form is to usurp substance, his conduct is none the less binding upon him. True, it is urged that the evidence fails to show that appellant was aware of the facts ascribed to him in the opinion of Judge Sessions.* Presumably the appellant would have kept in touch with the acts of the receivers, since he admits that the interest accruing on his bonds was in default throughout the entire litigation. Testimony was introduced at the hearing of July 6, 1917, which tends to show that appellant • was conversant with the various proceedings taken and orders made during *370the receivership. The testimony was calculated to elicit denials from both appellant and his brother (his attorney), yet neither offered himself as a witness. It is a, significant fact that appellant nowhere denies that he knew of the receivers’ applications for the orders, or of the orders themselves, as they were severally entered. The acts of the receivers, as we have already said, extended over a period of more than five years, and it was not until the other bondholders had supplied the money necessary to meet the expenditures incurred in building up the plant and developing the business that appellant objected. The trial judge heard the testimony and was familiar with the situation from beginning to end, and in the circumstances pointed out we are not disposed to disturb his findings.
2. Among appellant’s objections to the reports of the receivers it is stated, and made the subject of an assignment of error, that they made improvements and betterments of the property and incurred indebtedness without the approval of the court. These assertions are in effect refuted by what is shown in the statement of facts, and particularly by the findings of the court.
[2] 3. The assignment relating to appellant’s objection that the fire insurance proceeds should have been applied toward payment of the bonds and not obligations of the receivers is met: (a) By the proceedings and order in which the policies of insurance were reformed, so as to require the moneys derived under them to be paid to the receivers, instead of the mortgage trustee, and applied according to the orders of tire court, as pointed out in the statement of facts; and (b) by the fact that the fire occurred after the offer of Fernald & Co. to purchase the property and assets of the company had been accepted under the court’s authority and direction — in other words, the loss occasioned by the fire was the loss of the purchaser, not the seller, and appellant has at no time objected to the sale.
4. Several contentions are made, whish have neither fact nor assignment to justify them. One is, for instance, that there was “collusion between the trustee, Fernald & Co., and the receivers.” There was no issue tendered, and no testimony offered below, in relation to such a. charge. It is not suggested that Reynolds’ course was actuated by any improper motive, and yet appellant’s bonds are but part of the Reynolds honds. Appellant does not seem to appreciate the evidential effect of the concurrence of all the other interested parties in the very proceedings and orders which he alone challenges. Whatever rights he may have originally possessed, his long neglect to assert them, and the inevitable misleading effect of this upon the court and parties alike, must be held to estop him from claiming priority in virtue of the mortgage lien.
The order appealed from will be affirmed, with costs.
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