Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/830

 § 822.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XVII. In this way the court will only do what, if a receiver should not be appointed, the company ought itself to do. For even though the mortgage may in terms give a lien upon the profits and income, until possession of the mortgaged premises is actually taken, or something equivalent done, the whole earn- ings belong to the company and are subject to its control. 1 " The mortgagee has his strict rights, which he may enforce in the ordinary way. If he asks no favors, he need grant none. But if he calls upon a court of chancery to put forth its extraordinary powers and grant him purely equitable relief, he may with propriety be required to submit to the operation of a rule which always applies in such cases, and do equity in order to get equity. The appointment of a receiver is not a matter of strict right. . . . " We think, also, that if no such order is made when the receiver is appointed, and it appears in the progress of the cause that bonded interest has been paid, additional equipment provided, or lasting and valuable improvements made out of earnings which ought, in equity, to have been employed to keep down debts for labor, supplies, and the like, it is within the powers of the court to use the income of the receivership to discharge obligations, which, but for the diversion of funds, would have been paid in the ordinary course of business. This, not because the creditors to whom such debts are due have, in law, a lien upon the mortgaged property or the income, but because, in a sense, the officers of the company are trustees of the earnings for the benefit of the different which has been thus improperly ap- plied to their use." Burnham v. Bower., Ill U. S. 776, 782, 783. 1 Compare King v. Housatonic R. R. Co., 45 Conn. 226. The earn- ings of a road in the hands of a re- ceiver are chargeable with the value of goods lost in transport, and with damages done to property during his management, in preference to the claims of bondholders, under an existing mortgage. Cowdrey v. Galveston, etc., R. R. Co., 93 U. S. 352. Earnings of the road in the hands of a receiver are chargeable 810 with injuries to a person sustained while the road is in the receiver's hands. Mobile and O. R. R. Co. v. Davis, 62 Miss. 271. The assignee of a claim which is entitled, as against the claims of bondholders, to be paid from earn- ings in the receivers' hands, has all the rights of his assignor. Union Trust Co. v. Walker, 107 U. S. 596; Burnham v. Bowen, 111 U. S. 776. If the claim as against the funds of the receivership, is evidenced by commercial paper, it is no waiver of the claim to renew the paper. lb.