BROWN' et
'V. TOLEDO,
P. & W. R.
CO.
etal.
(Oircuit Oourt, N. D. Illinois. July 2, 1888.)
1.
REcEJVERS.....LIABILITfES-RENT--RAlLROAD COMPANIES.
Where one railroad company leases the property of another, agreeing to pay as part of the rent interest on certain mortgage bonds, non-payment of the rent and interest being a cause,of forfeiture, receivers of the lessee company, appointed by the court to preserve its system intact for the benefit of the company and its creditors, are liable for the rent and interest accruing during the term of their receivership
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2. :SA)[E.....EXPENSES OF RECEIVERSHIP. Where the. court appoints receivers for a railroad company. for the benefit of that company,and its creditors, no part of the expenses of the receivership are chargeable against the property of another railroad company, leased by the insolvent company, the receivership not being for the benefit of the le,ssor or its creditors. .
'In Equity. . the matter of the claim of Philip Henry Brown and John Patton {or rental for the use of the Toledo. Peoria & Western 'Railroad Com.pany by the'receivers of the Wabash Company· . Foster &; Thomson, for complainants. Wells H. Blodgett, for defendants., GRESHAM, J. 1. TheWabasQ. Company had a leasehold interest, anc;l no more, in the property of the Toledo, Peoria & Western RaiJroad,and by the terms of the leaSe that intere!:\t was liable to be forfeited for the non-payment of rent. The Wabash Company agreed to pa.yas part or Jlle rent the interest, as it became due, upon the first mortgage bonds of the Toledo, Pe(jria & Western.. The mortgage which the Wabash Com,. pany executed, and which was foreclosed, bound the leasehold interest in the Toledo, Peoria & Westerriproperty, and nothing more. The relations between the Wabash and the Toledo, Peoria & Western at thetimil lIumphreys and Tuttwere appointed re'ceivers were tbose of lessor lessee; and the receivers, under the orders onhe court, were invested with the entire estate of the Wabash Company. including its interest in the Toledo, Peoria&Weste:rn property. Thereceivers thus and,as l?uch, liable for the rent. . ' .. ' oecaIpe assignees of the " . 2. l'he Wabash suit was commenced to preserve inta9t the Wabash system for the benefit of that cOInpany and its creditors and stockholders,. In ,ol'der todo. this, it was necessary to prevent the forfeiture pfleases; lIlcluding that of the Toledo, Peoria & Western;. arid the of' 'court, including the appointment 0'£ the receivers, plainly indicated tha,t the rent would be paidupon leased lines. At the time the latter suit was commenced, neither rent under the lease o( the Toledo, Peoria & Western, nor interest on its first-mortgage bonds, was in arrear; and therefore neither the Toledo, Peoria & Western, nor the trustees in its first mortgage, had any right to demand possession of the leased property. It was at all times in the power of the court which appointed the receivers to direct them to surrender possession of the leased property.
'V. MALONE.
445
3. The .embraced only the property of the Wabash pany, and thecoui't took posllession of the property of the Toledo, Peoria & Western, Qat for the benefit of that company and its creditors, but for the benefit of the Wabash Company and its creditors and stockholders. No part of' the expenses of the receivership can therefore be properly chargeable against the Toledo, Peoria & Western property. 4. The Toledo, Peoria & Western property was operated by the refrom May 28, 1884, to June 10, 1885, and. the rent which accrued during that period, applicable to the payment of interest on the first-mortgage bonds, amounted to $321,080047, which amount is due from 'the receivers to thetrtistees in the first Toledo, Peoria & Western mortgage, less $99,571.17, already paid by the receivers on that account,. , 5., Therigbt of this court to decree upon the claim of the trustees in the first mortgage of the Toledo, Peoria & Western for rent for the use of the, leased property during the time it was in the possession of Humphreys and Tutt as receivers, is provided for, and recognized in the orders " and decrees of the court in the Wabash suit at St. Louis. Adecree will therefore be entered against the receivers for the rent which accrued during their possession of the leased property, less $99,1571.,17, the amount already paid as stated, which amount so decreed to be due shall be made a charge upon the property of the receivership, as part of the receivership expenses.
SATTERFIELD 'V. MALoNEet
al.
OQurt,
w: n. Pennsylvania.
June 22,1888.) ,
, ,
To convert a deed absolute on its face into a mortgage, by parol testimony, such testimony must be clear and specific; of a character such as willieavirin ,the mind of the chancellor no hesitation ,or doubt.! The )mow)ed&,e of a husband of facts affecting thetitleto real estate pur· chased by his Wife, is not imputable to her, where the purchase is not effected through ,his agency, and he takes no part in the Itegotlations. AND WIFE;.
ABSOLUTE ON FACE-EVIDENCE.
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8.
'Thee.stablished doctrine in Pennsylvania is that the principal is not af· fectedbyhis agent's knowledge, unless it is shown that such knowledgevvRs acqui'red by the agent in the'ClJllrse of the business in which he was employed ' , for his principa1. 2 ITo coD:verta'deedabsolute on its faCe into a mortgage, the evidence should be clear and convincing.' Cochrane v. Price, (Md.) 8 Atl. Rep. 001, and cases cited in note.. Knapp v. Bailey, (Me.) 9 Atl. Rep. 122, and note; Pancake v. Cauffman, (Pa.) 7 Atl. ReP, 67,and.note,LMcConnick y. Herndon, (Wis.) 81 N.W. Rep. 808; Canal Co. v. Crawford, (Or.) l'aG. Rep. ;U8.Fprfacts held sufficient, soo..Id.; McMillan v. BisBe1.4 (}lie,h'),29 N,. W. Rep. 787, and n"ote;, HUBcheon v. Huscheon, (Cal.) 12 Pac. Rep. 410'; v. 88(i; Stephens v. Allen, (Or.) 8 Pac.. Rep. 168; Miller v.Ausenig, :,' ,aSh',T.) ita. 111.;, Cosb,Y"V. ;J;!uchanan,,(Ala.) 1 South. Rep-, 898, ;,yearson v, Sha,rp," , Plio.) 9 Atl, 88. ,See, aJ.so, Rogers.y. Beach. (Ind.) 17 N. E. .ttep. 609; Knaus v. , reher, '4 South.Rep. 287. ' . ' " , ,sAs !;q tlle kJ:l,9'Yle<,lge of, an agel1t is n9tiCl3.;to the principal, see Huff v,FQ well, (Iowa,) 2li N. W. Rep. 252, and note. ,C:
SAME-PnINCIPAL AND AGENT.