27 Ind. App. 459 | Ind. Ct. App. | 1901
The only question involved in this appeal arises upon the action of the trial court in sustaining appellees’ demurrer to the appellants’ intervening petition.
It appears from the record in this case that a receiver had been appointed for the Spring-Emerson Stationery Company in an action for that purpose by the Office Specialty Manufacturing Company. The court had ordered in the proceedings of said receivership that all creditors whose claims had not been reduced to judgment to file their claims with the clerk of the court on or before a certain date, and the appellants herein had complied with this order of the court-. In order to present the question of the priority of their claims before the trial court, appellants asked and obtained leave to file an intervening petition. The sufficiency of this petition was raised by appellees’ demurrer thereto. It is averred in appellants’ intervening petition that on the 17th day of September, 1896, the Spring-Emerson Stationery Company, for the purpose of securing certain of its creditors, executed to one Mortimer Levering, as trustee for said certain creditors, a chattel mortgage upon its stock of goods and machinery, which mortgage was duly filed and recorded in the office of the recorder of Tippecanoe county within ten days after its execution; that it was provided in said mortgage that the mortgagor should retain possession of the goods so mortgaged and that it should replenish the stock
Appellees’ demurrer to the intervening petition admits all facts well pleaded therein. There are no questions of disputed amounts, overcharges, or fraudulent sales. There is no claim by any one that the mortgage did not cover after-acquired property. We think the petition in the case at bar exhibits claims such as a court of equity will decree preferential payment from the proceeds of the sale of the mortgaged property. The rule applied universally to such creditors of railroad companies is well stated by Waite, O. J., in Fosdick v. Schall, 99 U. S. 235, 25 L. Ed. 339: “Every railroad mortgagee in accepting his security impliedly agrees that the current debts made in the ordinary course of business shall be paid from the current receipts before he has any claim upon the income.” “The income out of which the mortgagee is to be paid is the net income obtained by deducting from the gross earnings what is required for necessary operating and managing expenses, proper equipment and useful improvements. * * * While, ordinarily, this power is confined to‘ the appropriation of the income of the receivership and the proceeds of moneyed assets that have been taken from the company, cases may arise where equity will require the use of the proceeds of the sale of the mortgaged property in the same way.” See, also, Burnham v. Bowen, 111 U. S. 776, 28 L. Ed. 596, 4
Counsel for appellants have well said: “The funds in the hands of the receiver to the extent of the total amount of the claims of these appellants are to that amount larger than the mortgage creditors had any right to expect and to that amount larger than they have any right to receive.”
The demurrer to the intervening petition ought to have been overruled. The judgment is reversed, with instruction to the trial court to overrule the demurrer to appellants’ intervening petition, and for further proceedings in accordance with this opinion.