Page:Federal Reporter, 1st Series, Volume 5.djvu/851

 ANDREWS V. SMITH, ���839 ���iuterests. That decree adopted what had been oreated by the court as a receiverehip, as known and warranted by the law; but the administration of it was net left to the judicial judgment and direction of the. court under the law authoriz- ing and governing a receivership known to the law as such. Instead thereof, the parties enacted a code ex contractu for the administration of the property, and provided ex contractu that there should be the formality as of a decree supervening thereupon. Since that the administration bas proceeded in pursuance of that fact, and of that formality, practically an administration by the agreement of leading real and repre- sentative persons and parties." �In Langdon v. F, e C. R. Co. a bill was afterwards brought by these security holders for the purpose of aseertaining the priority of the debts, with reference to security upon the property as receivership debts. After another very elab- orate and exhaustive examination of these proceedings, it appears to bave been determined that, as the lessor, as holder of the lien for rent, and the first mortgage bondholders and other security holders, suffered the persons in possession to be held out as receivers, acting under the authority of the court, and as such authorized to contraet theso debts, those who advanced money upon the faith of that authority would bave a right to the same priority that regular receivership debts would bave created. Royce, J., in delivering the opinion of the court, (pamphlet, page 51,) said: "The rights and lia- bilities of the parties are not dependent upon the rules of law as understood and administered in a strict receivership. The Vermont & Canada Eailroad Company bas so conducted that it is estopped from denying that the acts of the receivers, while acting as such, are as binding upon it as the acts of strict receivers would bave been; hence the payment of the rent claim of the Vermont & Canada Eailroad Company must be postponed to the payment of the bonds issued by the re- ceivers. As between the hona-fide holders of the bonds so issued, and those that bave been received in exchange for them, and the Yermont Central Eailroad Company, the mort- gage bondholders, and the Vermont & Canada Eailroad Com- ����