Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/828

 § 822.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XVII. gaged its property, rents, issues, and profits, giving to the trustee the right to enter and take possession and collect the rents and issues. Default having been made, the trustee tiled a bill to subject the moneys of the company on hand to the claims of the mortgage. A judgment creditor whose execution had been returned nulla bona, also tiled a bill to obtain satis- faction of his judgment from the same moneys ; and it was held that, since the trustee had not taken possession, his claim to the moneys should be postponed to that of the judgment creditor. 1 § 821. When pending the foreclosure of a railroad mortgage, the trustees or the bondholders procure the appoint- mentof re- ment of a receiver of the corporate property, it is foreclosure competent for the court to add to the order appoint- suit. Pay- ma. ^ e receiver such terms and conditions in regard meat of cur- © ° rent ex- to the payment of the current expenses of the road incurred prior to his appointment, 2 as well as in re- gard to expenses incurred during the time of the receivership, as may seem to the court just or expedient in view of the cir- cumstances of the case. § 822. Here the leading authority is Fosdick v. Schall, 3 where Chief Justice Waite said, giving the opinion of the Federal Su- preme Court : " We have no doubt that when a court of chan- cerv is asked by railroad mortgagees to appoint a receiver of the railroad property, pending proceedings for foreclosure, the court, in the exercise of a sound judicial discretion, may, as a condition of issuing the necessary order, impose such terms with reference to the payment from the income during the re- ceivership of outstanding debts for labor, supplies, equipment, or permanent improvement of the mortgaged property as may, under the circumstances of the case, appear to be reasonable. Railroad mortgages and the rights of railroad mortgagees are comparatively new in the history of judicial proceedings. They are peculiar in their character and affect peculiar interests. The 1 American Bridge Co. v. Ileidel- bacli, 94 U. S. 798. Compare King v. Housatonic R. R. Co., 45 Conn. 220; New York Security Co. v. Saratoga G. & E. L. Co., 159 N. Y. 137. 808 2 Metropolitan Trust Co. v. Tona- wanda, etc., R. R. Co., 103 N. Y. 245, is adverse to this; but the weight of authority favors the full proposition stated in the text. 3 99U. S. 235.