BLA.IR V. ST. LOUIS, H. & K. R. CO.
ties who claim it out of possession,-a receiver who could not do anything with it, who could not build the road, who could not operate it because there is no rolling stoch, and no connection with any other road, and no opportunity of doing anything, but simply put in possession to keep your client, apd Mr. Davis' client outside, and hold it while you proceeded to litigate the title and right to possession. We think the true way is that the question of title and possession should be settled by an action at law, and that will end all controversy. We have looked at it for the last two or three days, on these dif;terent facts, in all the lights and shades suggested, and we feel constrained to deny the application for a receiver. Mr. Brother TREAT suggests, if we should carry this to the extent to which you claim, we should be having this court pushing the doctrine of receivership to the extent of making us justices of the peace, and issuing peace warrants.
BLAIR, Trustee, v. ST.
H. & K. R. Co. and others. Intervenor. I )
March 19, 1885.)
((Jircuit Court, E. D. Missouri.
RECEIVERS-ANTE-RECEIVB:RSHIP DEBTS-ATTORNEYS' FEES.
A claim of an attorney against a railroad, for fees earned a year and a halt before the appointment of a receiver, is not entitled to any preference.
Where the annual salary of the attorney of a railroad falls due only a short time before the road is placed in the hands of a receiver, his claim against the company is entitled to priority over that of mortgage bondholders.
SAME-PAYMENT OF .JUDGMENT AGAINST ROAD. .
One who pays a judgment against a railrond company a few weeks before the appointment of a receiver, under an agreement that the amount so advanced. shall be repaid by the company, is not entitled to priority over bondholders.
In Equity. Exceptions to master's report. Theo. G. Case, for complainant. John O'Grady, for receiver. James Carr, for intervenor. BREWER, J., (orally.) In the exceptions which have been argued to the reports of the master in the case of Blair against St. Louis, Hannibal & Keokuk Railroad, the first that I shall notice is that in the case of Norton against Railroad Company, where three sets of claims were presented. The first was for services as special attorney in two or three cases, a year and some months prior to the appointment of the receiver, amounting to $135. The master disallowed that; that is, he recogI
Heportecl by Benj. F. Hex, Esq., of the St. Louis bar.
nized it as a claim against the company, but refused to give it priority over the mortgages. In that, I think that he WHS right. While, of course, as we in the profession all agree, lawyers are benefactors to the race, Hnd entitled to special consideration at the hands of any intelligent tribunal, yet I think that the lawyer who waits a year and a half before collecting his fees is guilty of great negligence. He certainly presents no equitable claims for preference. The second claim is for salary for the year prior to the appointment of the receiver. The master nnds, and that fact is not challenged, that he was to be paid a salary of a thousand dollars, payable at the end of the year, which amount became due just before the appointment of the receiver; and it is insisted on the part of the bondholders that that is not a claim of a character to be recognized and awarded priority; in other words, that the services of an attorney are not necessary to the operation of a railroad. '1'he counsel seemed to liken this to the rulings under that statute, in force in some states, making a railroad company responsible to one employe for the negligence of a co-employe. Such statute has been held to refer only to that negligence which occurs in the management of the trains, the actual operation olthe road, something which is attended with peculiar risk, and so justifying an exception to the general rule of masters' liability. It does not seem to me that in that idea is to be found the true test. I think that whatever is necessary in the ordinary administration of the affairs of the corporation, comes within the spirit of the decisions of the supreme court; and tha.t an attorney's services are thus necessary is very clear. That exception made by the bondholders will be overruled, and the allowance sustained. The third arises upon these facts. It appears that this gentleman, the attorney of the road, paid off sundry judgments" rendered before justices of the peace, against it, paid certain claims for wages, and for stock killed, etc., and paid them under an arrangement, between himself and the president of the company, that the money thus advanced by him should be repaid by the company on the first of January, ] 884. This was only a tew weeks. before the appointment of the receiver, and his cla.im is that, having paid these liabilities of the company, at its instance, under a contract by which repayment to him was to be made at a time within less than six months before the appointment ot the receiver, such debt should be preferred to the mortgage. We do not think 1"0. It amounts simply to this: He loaned the company so mnch mopey, but the bondho-lders had loaned theirs long before, and loaned it'secured by a lien. If he had taken a mortgage at the time of making this loan, and thus obtained a lien, no one would contend that he thereby obtained priority over the earlier loan. That is all this tninsaC'tidn amounts to. He loaned so much money to the company, but did not take a lien. Now he asks that, not a lien, and having loaned the money a few weeks before the appointment of the receiver, that he should obtain priority
BLAIR 11. ST. LOUIS, H.' & K. B. CO.
over those who loaned money three or four years or more ago and then took a mortgage. All the exceptions in this case of Norton's will be overruled.
Trustee, v. ST.
H. & K. R. Co. and others. Intervenor. l )
:March l!l, 1885.)
(Oircuit 00U1't, E. D. Jli.180uri.
DEBTS-SUHETY ON ApPEAL-BoND.
Where a judgment is recovered against a railroad company in an inferior court upon a claim not entitled to priority, and an appeal is taken, and the company's attorney goes on the appeal bond, and a receiver of the road is thereafter appointed. and after his appointment a judgment is recovered in the appellate court against the company and the attorney, and the latter pays it, his claim is entitled to no p.riority over that of mortgage bondholders.
In Equity. Exceptions to master's report. It appears that the intervenor paid the judgment referred to in the opinion of the court. Theo. G. Ca,Be, for complainant. John O'Grady, for receiver. James Carr, for intervenor. BREWER, J., (orally.) The other case of Norton against The Same Road presents a different sta.te of facts. 2 There, the same gentleman, who was attorney for the road, at the instance bf the president, went surety on appeal.bonds. Cases were pending before a justice of the peace in the latter part of 1873, a few months before the appointment of the receiver, and after judgment there the company appealed. and he signed the appeal-bonds. The cases went to the circuit court of the state, and on trial there, after the receiver's appointment, judgments were rendered against the company, and against him. Well, not one of the claims sued on before the justice would be entitled to priority. They date back two or three years before the appointment of the receiver, and it would be strange if, when the claims in the first instance were not of a character entitled to priority over a secured and registered indebtedness, that an attorney of the road could, by simply giving his services as surety on appeal-bonds, indirectly secure the payment of those claims in priority to the mortgage debts. We think the ruling of the master in that was correct, and the exception will be overruled.
IReported by Bcnj. F. Rex, Esq., of the St. hal'. See other case of same title, which was decided immediately before this one.