Bosworth v. Terminal Railroad Association of St. Louis

The facts in this case are briefly these: On September 21, 1893, the Mercantile Trust Company, of New York, filed its bill of complaint in the circuit court of the United States for the Southern district of Illinois against the Chicago, Peoria & St. Louis Railway Company, praying foreclosure of a mortgage and the appointment of a receiver. On the same day an order was entered appointing the present appellant receiver of that road. Among other things, the order of appointment directed the receiver to pay 'all claims for materials and supplies which have been incurred in the operation and maintenance of said property during the six months last past, and all ticket trackage traffic balances due from said railroad.' The plaintiff, the Mercantile Trust Company, objected to this part of the order, but, after argument, the objection was overruled. On May 27, 1895, the Terminal Railroad Association of St. Louis filed an intervening petition, claiming that it had performed labor and furnished materials for the defendant railroad company within the six months named in the order of appointment. The receiver answered, denying the claim. The matter was referred to a master, who found in favor of the petitioner, and on July 30, 1896, the following decree was entered:

'It is therefore ordered, adjudged, and decreed by the court that the receiver herein pay to the intervener, the Terminal Railroad Association of St. Louis, the said sum of eight thousand one hundred and sixty-two dollars and eleven cents ($8,162.11) out of the income of said receivership, if any such income is in his hands, and, in case he has not the funds in hand for this purpose, it is ordered, adjudged, and decreed that the same be paid out of the proceeds of the sale of the mortgaged premises in preference to the mortgage debt, and until paid the same is hereby declared a lien upon the said mortgaged estate superior to the lien of the mortgage herein.'

The receiver appealed from this decree to the court of appeals, but on June 8, 1897, that court dismissed the appeal. 53 U.S. App. 302, 26 C. C. A. 279, and 80 Fed. 969. Thereafter a certiorari was issued, and under that writ the case was brought to this court.

Bluford Wilson and P. B. Warren, for petitioner.

J. E. McKeighan, Shepard Barclay, Millard F. Watts, and S. P. Wheeler, for respondent.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.