76 F. 164 | 7th Cir. | 1896
At the suit of the trustees in a mortgage executed in the year 1888 by the Chicago, Peoria & St. Louis Railroad Company upon its railroad and appurtenant properties, and upon the income and profits thereof, the appellees on September 21, 1893, were appointed receivers, and were directed to operate the road, and out of the income to pay, as preferred debts, “all claims for materials and supplies which have been incurred in the operation and maintenance of said property during the six months last past.” On the 24th of November, 1891, the railroad company had leased of the appellant, the Mather Humane Stock Transportation Company, a corporation of Illinois, 100 stock cars, for which the rental, accrued after May 1, 1893, and amounting to $3,722.40, had not been paid. This demand the appellant, by an intervening petition, asked to have allowed a.nd declared to be a lien prior to the lien of the mortgage on the road and income. It appeared that of the sum above named $1,346,40 accrued after August 1, 1893, and that the railroad company had received $1,361.66 for the use of the leased cars on other lines of road between May 1, 1893, and the appointment of the receivers. The priority asked for the entire demand, and for each of the smaller sums named, the court denied, and error is assigned upon each of the rulings.
That the claim for rentals of cars accrued before the appointment of the receivers was not entitled to priority over the lien of the mortgage is settled bv the decision of the supreme court in Thomas v. Car Co., 149 U. S. 95, 112, 13 Sup. Ct. 824, 831. After reference to the cases of Miltenberger v. Railroad Co., 106 U. S. 286, 1 Sup. Ct. 140, and Kneeland v. Trust Co., 136 U. S. 89, 97, 10 Sup. Ct. 950, it is there said:
“Tested by tlie principles asserted in these eases, the claim for car rental that had accrued prior to the receivership cannot he maintained, but should have been disallowed. The case of a. corporation for the manufacture and sale of cars, dealing with a railroad company whose road is subject to a mortgage securing outstanding bonds, is very different from that of woi'kmen and employds, or of those who furnish from day to day supplies necessary for the maintenance of the railroad. Such a company must be regarded as contracting upon the responsibility of the railroad company, and not in reliance upon the interposition of a court of equity.”
The assertion of a lien for the smaller sums rests on no better equity. There was nothing in the contract of lease to forbid the use of the cars upon other lines of road, and the money so earned is no more subject to a (rust in favor of the lessor than the earnings of the cars when in use on the road of the lessee. It is contended that for the amount due for the use of the cars after August 1, 1893, a preference should be allowed, because by the terms of the lease that portion of-the rent was not due when the receivers were appointed, and the intervener could not have retaken its cars for default in the payment:, or to secure the payment of that amount. The fun-
