Page:Harvard Law Review Volume 10.djvu/168

142 the application of the companies themselves in advance of any default upon mortgage obligations, and without the presence of other conditions once regarded as essential for the appointment of receivers.

The first important instance of this kind was the well known Wabash case in 1884. The significant and peculiar facts of this case were substantially these. The Wabash railway, being a line consolidated of several originally separate roads, and embracing several thousands of miles of railway, was covered not only by separate mortgages on the separate properties of the original line, but by general mortgages on divisions of the road as they were from time to time organized in the process of growth and consolidation, and finally by a huge general mortgage on the whole consolidated road. A few days in advance of the date of payment of a semi-annual coupon for interest on the bonds secured by the last named mortgage, the Wabash company filed its bill in the United States Circuit Court at St. Louis, averring its inability to pay its next due coupon, and its insolvency; and asking for the appointment of receivers, mainly on the ground that without this remedy the property would be disintegrated. No notice of the application for receivers was given to any bondholders, but only at most to the trustees of the general mortgage. Upon the unopposed motion of the Wabash company, receivers were appointed, who took instant possession of all the properties.

It is clear there was here no suit pending, in the sense of the definition already quoted. No relief nor protection was sought by any creditor of the company; no suit was begun by any creditor. The proceeding, so far as it resembled any former proceeding or type of legal proceedings, resembled most an application in voluntary bankruptcy. It could not have been this, because no bankrupt law was then in existence. It was manifestly without precedent, or "peculiar," as was said by the District Judge who administered the case to a great extent: "The case is peculiar in this aspect, that the application was made by the corporation itself, instead of being made by the mortgagee on default of payment of interest” In point of fact, other requirements and conditions for the appointment of receivers, as stated in our definition, were not observed in this case.(1) The receivers appointed were not indifferent persons,