56 P. 1022 | Or. | 1899
Lead Opinion
after stating the facts, delivered the opinion.
We assume at the outset, as it seems to have been conceded by the parties to this controversy, that defendant corporation and its mortgagees holding liens upon its franchises and property, are subject to rules and regulations like those governing the management, control, and disposal of the property and assets of companies and corporations engaged in the operation of ordinary railroads, with quasi public functions to perform. It has become a settled principle under the authorities that where a mortgage is taken upon the property, and even upon the earnings, of such a corporation it is implied, from the nature of the business in which the concern is engaged, and the usual and ordinary management and conduct of such business, that the current earnings of
It is from considerations of this nature that the courts are induced to require, as a condition of the appointment of a receiver, that the mortgagee shall consent to the payment of such equitable demands as are outstanding against the company, which have accrued within a reasonable space of time prior to the receivership, and, even in cases where the condition is not primarily imposed, to require that the receiver shall adjust the current receipt fund in accordance with the equities thus to be ascertained, and, under certain conditions, reimburse the preferred creditor from the corpus of the estate, and to that extent displace the mortgage. In further support of these observations, see Bound v. South Carolina Ry. Co., 7 C. C. A. 322, 58 Fed. 473; National Bank of Augusta v. Carolina, K. & W. R. Co., 63 Fed. 25; Thomas
Aeelrmed.
¡Note. — This case has now been affirmed on appeal, and claim of the Steel Company given a preference: Southern Ry. Co. v. Carnegie Steel Co., 175 U. S. -(20 Sup. Ct. Rep. 347). See also, on the same point, Lackawanna Iron Co. v. Farmers’ Loan Co., 175 U. S.-(20 Sup. Ct. Rep. 363), and Maryland Steel Co. v. Gettysburg Electric Ry. Co., 99 Fed. Rep. 150. — Reporter.
Rehearing
delivered the opinion.
The appellants ask for a rehearing of this cause, and in support of the petition therefor direct special attention to the point made in their brief, to the effect that the order appointing the receiver having directed that he should take into his possession and control all the property of the defendant corporation, “including all franchises of the said defendant company and evidences thereof, as, also, all contracts entered into or owned and possessed by said company,” and having further directed him to pay “all current expenses incident to the administration of his trust, and to the condition and operation of said business of the defendant company, from time to time, as the same arises and accrues,” he was thereby required to pay the particular claim and demand of the appellants ; and it is suggested that perhaps we had overlooked it in the consideration of the cause. The contention did not escape our attention, and is practically, or inferentially at least, covered by the opinion. It was there held that the claim or demand in question was not such a preferred claim as was entitled to payment in preference to the mortgage lien. The terms of the order, when read in their entirety, do not require the payment of any claims which had accrued prior to the appointment of such receiver, but such current expenses only as are incident to the administration of his trust and to the condition and operation of the business. So that we find nothing in the order which requires the receiver to pay any debt or obligation of the company not entitled to preference over the mortgage creditors. For these reasons, the petition for rehearing will be denied.
Rehearing Denied.