Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/833

 CHAP. XVII.] LEGAL RELATIONS AMONG CREDITORS. [§ 824. earnings of the receivership, or even the corpus of the property, under the order of the court, with a priority of lien. Yet the discretion to do so should be exercised with very great care. The payment of such debts stands prima facie on a different basis from the payment of claims arising under the receiver- ship, while it may be brought within the principle of the latter by special circumstances. It is easy to see that the payment of unpaid debts for operating expenses, accrued within ninety days, due by a railroad company, suddenly deprived of the control of its property, due to the operatives in its employ, whose cessation from work simultaneously is to be deprecated, in the interest both of the property and of the public, and the payment of limited amounts due to other and connecting lines of road for materials and repairs and for unpaid ticket and freight balances, the outcome of indispensable business rela- tions, where a stoppage of the continuance of such business relations would be a probable result, in case of non-payment, the general consequences involving largely, also, the interests and accommodation of travel and traffic, may well place such payments in the category of payments to preserve the mort- gaged property in a large sense, by maintaining the good-will and integrity of the enterprise, and entitle them to be made a first lien. " * 1 Miltenberger v. Logansport Rail- way, 106 U. S. 286, 311. A debt from a railroad company for car rental accruing prior to the receivership was not given priority over mort- gage debt; but a similar debt for car rental subsequent to receivership allowed in Thomas v. Western Car Co., 149 U. S. 95. See, also, Union Trust Co. v. Illinois Midland Ry. Co., 117 U. S. 434; Kneeland v. Foundry and Machine Works, 140 U. S. 592; Williamson v. Washing- ton City, etc., R. R. Co., 33 Gratt. (Va.) 624; Poland v. Lamoille Val- ley R. R. Co., 52 Vt. 144. Compare Hand v. Savannah, etc., R. R. Co., 17 S. C. 219, 266; Ex parte Benson & Co., 18 S. C. 38; Ex parte Caro- lina Nat. Bk., ib. 289; Denniston r. Chicago, Alton, etc., R. R. Co., 4 Biss. 414; M'Cormack v. Salem R'y Co., 34 Or. 543. When bondholders suffer certain persons to act as re- ceivers, and issue negotiable certifi- cates, which come into the hands of bona fide holders for value, the bond- holders cannot set up that the re- ceivers were improperly appointed. Langdon v. Vermont, etc., R. R. Co., 53 Vt. 228; see Humphreys v. Allen, 101 111. 490. But it has been held that receiver's certificates payable to a given person "or bearer 1 ' are not negotiable, and when issued without benefit or consideration to the receivership, so that the payee could not have recovered on them against fuuds in the hands of the receiver, cannot be recovered on 813