Page:Federal Reporter, 1st Series, Volume 2.djvu/44

 KING V. 0. as M. R. CO. 37 �receiver, under the direction of the court, since the bills in this case were filed. Application was made to the court in November last, by crosB-bill, on behalf of certain preferred stockholders, claiming that as such they were entitled to pri- ority of lien over ail indebtedness and mortgages, or deeda of trust, made after the date of certain certificates given in 1867, which will be more particularly referred to hereafter. These stockholders were allowed to iiitervene for the protec- tion of their interests in any form of pleading that they might select, and accordingly they have filed a cross-bill, setting up their claim to priority of lien, and to that cross-bill a de- murrer bas been interposed by those representing what is called the second mortgage or deed of trust, and other indebt- edness of the company ; and the question now presented for consideration is as to the sue&ciency of this cross-bill. It is dif&cult to present a clear and intelligible statement of the f acta from the allegations of the cross-bill upon which the preferred stockholders rely for the enforcement of their priority of lien. The material facts upon which they rely seem to be that, under the decrees and sales which took place before the mort- gages and deeds of trust which are in controversy here were exeeuted, Campbell and others became the purchasers of the puoperty, as trustees of creditors and stockholders of the Ohio & Mississippi Company, for the purpose of providing for and protecting claims of judgment creditors and other persons holding liens on the property, and also the interests of the stockholders; that in exchange, and as a payment of the interest of the creditors and stockholders, which it is alleged, were transferred to the trustees and held by them for the purpose aforesaid, they issued their certificate, according to a certain stipulated proportion determined by certain consid- erations as to priority and right of lien. As a part of this general arrangement which took place in the sale and in the trust created, a reorganization was to be made, from which should spring a new corporation, with the usual powers under the law for operating the road and creating new encum- brances and liabilities ; and this arrangement was carried into elïect, and in executing the various contracta and ar- ����