Page:Federal Reporter, 1st Series, Volume 5.djvu/861

 IN BE EELLÎ. 849 �value to the bonds; that if the bondholders had taken pos- session of the road before this money was advanced and expended, their security would have been comparatively val- ueless ; that if there had been unfinished road in process of ccmstruction when the receiver took possession, the court could have ordered him to complete the construction at the expense of the property and for the benefit of the bondholders ; and if the court could and woiild bave authorized the receiver so to act, it can now properly direct, and in justice to the petitioner should direct, that the advance which he made in taking up the obligation of the company, thus incurred for construction purposes, be made a charge upon the property superior to the mortgage liens. �I have carefuUy examined the authorities cited on the argu- ment, and there is no doubt that, in the case of a railroad in the hands of a receiver appointed by the court, ciroumstances may exist requiring the expenditure of money hy the receiver for new or additional construction, and that in such ciroum- stances the court, for the purpose of further conserving the property and protecting the interests of bondholders, at their instance may direct such expenditure to be made. Since the exercise of such a power would be extraordinary, the necessity should be great, and the right of the court, under the cir- oumstances of the case, should be clear. Undoubtedly, also, before any legal proceedings are instituted by the bondholders or their trustee to make their security available, the bond- holders may exercise such control over the property, and may 80 request and sanction the act of a third party in advancing money for the benefit of the property as to estop them from setting up their mortgage as a lien paramount to the claim of one who had thus acted on the faith of their request or direc- tion. The theory of the present petition evidently is that the alleged acts of the bondholders, in connection with the loan by the iron and coal company to the railway company, should be held to bave operated as an estoppel in pais, and that, therefore, they cannot now assert their mortgages as liens superior to the petitioner's alleged right in equity to charge the property with the payment of his advances. Since ail �v.5,no.l0 — 54 ����