to a preference.51 Neither will his acceptance of a renewal of these notes after the receiver's appointment.52 An assignee of a preferred claim has all the rights of his assignor.53 Where a claim to a preference is made because money was loaned the mortgagor at the request of the bondholders, a request made by all the bondholders must be shown or the preference will be denied.54 In a recent important suit to foreclose a railroad mortgage the following order was made: "That all outstanding debts of the said railway company for labor, materials, and supplies used in the equipment or permanent improvement of the said railroad, and all outstanding debts for necessary operating and managing expenses thereof in the ordinary course of its business, incurred after the first day of September, 1883, shall be allowed by the master as equitable liens, prior in right to the lien of the mortgage sued òn, irrespective of statutory liens therefor. And it is further ordered that all such claims accruing on open running accounts between said railroad and its creditors shall be considered as embraced within this order, if any part of the work was done, materials furnished, or expenses incurred after the first day of September, 1883, on subsisting contracts necessary for the continued operation of the road by said receiver; otherwise the demand will be limited to what accrued subsequent to September first," at which date the default in payment of interest upon the mortgage occurred.55 This order was, subsequently, thus expounded: "The various rulings of the court with respect to betterments and wages, not within the respective times stated, — to wit, six months or otherwise, have rested upon this distinct proposition: That supplies furnished or services performed under a subsisting contract, to which and to the continuance of which the parties were respectively bound, and the termination of said contract did not happen except within the time limited; or when such a continuing contract was still in force at the appointment of a receiver,

51 Burnham v. Bowen, 111 U. S. 776. See also Central Trust Co. v. Texas & St. L. Ry. Co., In re Waters Pierce Oil Co., Intervenor, 23 Fed. R. 703.

52 Burnham v. Bowen, 111 U. S. 776. 53 Union Trust Co. v. Walker, 107 U. S. 596; Burnham v. Bowen, 111 U. S. 776.

54 In re Kelly v. Green Bay & Minn. R. Co., 5 Fed. R. 846. See Morgan's L.

& C. R. R. & S. S. Co. v. Texas Central Ry. Co. 137 U. S. 171.

55 Treat, J., in Central Trust Co. v. Texas & St. L. Ry. Co., 23 Fed. R. 703; cited and followed by Brewer, J., in Blair v. St. Louis, H. & K. Ry. Co., In re Merriwether and others, Intervenors, 23 Fed. R. 704, 705.

the items of such continuing and subsisting contracts would fall within the prescribed rules. No other demands, independent in their nature, incurred before the prescribed time, are to be treated other than as credits at large. If this ruling is enforced there need be no difficulty with respect to what are called 'open and current' accounts. Such accounts must be under subsisting contracts, not to be terminated until within the period of time named; otherwise all items previous to that time must be rejected. This ruling may be subject to an exception where the local statute gives a lien under a different limitation. In the latter cases difficulties may arise if local decisions are followed, each one of which must depend upon its special facts." 56 It has been held that pending a receivership in a Federal court, where parties are entitled to a lien, and can secure it by proceedings under a State statute, they are not required to go to the expense of such proceedings, but the Federal court will treat it as though all needful steps had been taken to establish the lien; 57 and that "where like demands are presented from other States in which no statutory lien therefor exists, they shall be entitled to the same status, so that statutory and equitable liens may rest on a like basis." 58 An entry upon the books of the mortgagor showing the claim to be good is, in the absence of suspicious circumstances, prima facie proof.59 The attorneys of both the receiver and the complainant should have notice of the hearing of such a claim before a master.60 An order directing a receiver to carry out his corporation's contracts does not necessarily give those who claim damages for a breach of those contracts a preference over lien-holders.61 In a recent case, the following conditions were inserted in the order appointing a receiver: "(1) That the debts, if any, due from the railroad company for ticket and freight balances; and for work and labor performed by its employés and laborers; and for supplies and materials furnished for equipping,

56 Treat, J., as quoted by Brewer, J., in Central Trust Co. v. Texas & St. L. Ry. Co., Camden Lumber Co. and others, Intervenors, 23 Fed. R. 673.

57 Brewer J., in Central Trust Co. v. Texas & St. L. Ry. Co., Camden Lumber Co. and others, Intervenors, 23 Fed. R. 673, 674, 675; Treat, J., in Blair v. St. Louis, H. & K. R. Co., 19 Fed. R. 861. But see Hassall v. Wilcox, 130 U. S. 493.

58 Treat, J., in Blair v. St. Louis, H. & K. R. Co., 19 Fed. R. 861, 862.

59 Blair v. St. Louis, H. & K. R. Co., 19 Fed. R. 861, 862, Treat, J.; s. c. 22 Fed. R. 471, 472, Brewer, J.

60 Blair v. St. Louis, H. & K. R. Co., 19 Fed. R. 861, 862.

61 Olyphant v. St. St. Louis Ore & Steel Co., 28 Fed. R. 729.

operating, repairing, or improving the road; and all obligations incurred in the transportation of passengers and freight, or for injuries to person or property, which have accrued within six months last past, shall be paid by the receiver out of the earnings of the road. (2) That persons having demands or claims of any character against the receiver, may, without applying to this court for leave to do so, bring suit thereon against the receiver in any court in this State having jurisdiction, or may file their petition and have their claim adjudicated in this court at their election. This clause shall not be construed as authorizing the levy of any writ or process on the property in the hands of the receiver, or taking the same from his custody or possession. (3) That the debts and liabilities of the railroad company which the receiver is ordered to pay, together with all debts and liabilities which said receiver may incur in operating said road, shall be paramount and superior to the lien of the mortgages set out in the plaintiff's bill, and said lien shall continue until said debts and liabilities are satisfied; and the discharge of said property from the custody of the receiver shall not affect such lien, or deprive claimants of the opportunity of proving their demands, but said receiver or a successor shall be continued in office for the adjustment of such demands, and may be sued therefor; and if said demands are not paid by the person or corporation in possession of said mortgaged property, the court may repossess or may decree a sale of the property, as shall seem most expedient. (4) The said plaintiff shall prosecute this suit to final decree as speedily as the same can be done under the rules of equity practice, and failing so to do, the court of its own motion will discharge said property from the custody of the receiver." 62 Another recent order was as follows: "On this day comes the plaintiff, by Phillips and Stewart, its attorneys, and the defendant, by J. M. & J. G. Taylor, its attorneys, and the receivers, by S. H. West, their attorney, and S. W. Fordyce, one of the receivers, in proper person, and the proper order to be made by the court on the subject of the payment of debts and liabilities of the defendant company by the receivers came up for consideration; and, the court being now well and sufficiently advised in the premises, it is ordered that the following debts and demands against the company which have accrued since the execution of the mortgages

62 Caldwell, J., in Dow v. Memphis & L. R. Ry. Co., 20 Fed. R. 260, 266, 267.

in suit; viz., the debts due from the railroad company for tickets and freight balances, and for work, labor, materials, machinery, fixtures, and supplies of every kind and character, done, performed, or furnished in the construction, extension, repair, equipment, or operation of said road and its branches in this State, and all liabilities incurred by said company in the transportation of freight and passengers, including damages to person and property, and for breaches of contracts for the transportation of persons and property, and all claims and demands upon which suit has been heretofore brought or judgment recovered in the United States or State court in this State, together with all debts and liabilities which the receivers may incur in operating said road in this State, including claims for injuries to persons and property, shall constitute a lien on said railroad, and all property appurtenant thereto, superior and paramount to the lien of the mortgages set out in the bill, as provided by the statute of this State, and said road shall not be released or discharged from said lien until said debts and liabilities are paid. The receivers are authorized and directed to pay all such debts and liabilities out of the earnings of the road, or out of any fund in their hands applicable to that purpose; and, if not sooner discharged, then the same shall be paid out of the proceeds of the sale of the road." 63 Whether this doctrine applies to the foreclosure of any except mortgages by railway, telegraph, or other companies to which are delegated the right of eminent domain, is very doubtful.64

§ 244. Property over which Receivers may be Appointed. A receiver may be appointed to preserve and take possession of every kind of property, whether the same be what is termed corporeal or incorporeal, which can be seized by execution at law or which constitutes equitable assets. Thus receivers have been appointed to collect and hold the profits of a rectory,2 of a col

63 Central Trust Co. v. St. Louis, A. & T. Ry. Co., 41 Fed. R. 551, 553-554, per Caldwell, J.

64 Wood v. Guarantee Trust & Safe Deposit Co., 128 U. S. 416; Raht v. Attrill, 106 N. Y. 423; Reyburn v. Consumers' Gas, Fuel & Light Co., 29 Fed. R. 561; Fidelity Ins. & Safe Deposit Co. v. Shenandoah Iron Co., 42 Fed. R. 372; Seventh Nat. Bank of Phila. . Shenandoah Iron Co., 35 Fed. R. 436.

§ 244. 1 Davis v. Gray, 16 Wall. 203, 217; Davis v. Duke of Marlborough, 2 Swanst. 108, 127; Blanchard v. Cawthorne, 4 Simons, 566. See Palmer v. Vaughan, 3 Swanst. 173; Meriwether v. Garrett, 102 U. S. 472, 501.

2 Silver v. Bishop of Norwich, 3 Swanst. 112; White v. Bishop of Peterborough, 3 Swanst. 109.

lege fellowship, and of the offices of a master forester in a royal forest, and of a county clerk of peace, the tolls of a turnpike; 6 to manage and collect the profits of mines,7 plantations, a theatre, a newspaper, 10 and a railroad; to exercise the right to 11 sell a conditional right of membership in an exchange; 12 and to take possession of the estate of an intestate with power to apply for letters of administration.13 After the repeal of the charter of the city of Memphis, a receiver was appointed to take possession of all its property which could be subjected to the payment of its debts.14 In the last-mentioned case the Supreme Court laid down the following propositions: "1. Property held for public uses, such as public buildings, streets, squares, parks, promenades, wharves, landing-places, fire-engines, hose and hose-carriages, engine-houses, engineering instruments, and generally everything held for governmental purposes, cannot be subjected to the payment of the debts of the city. Its public character forbids such an appropriation. Upon the repeal of the charter of the city, such property passed under the immediate control of the State, the power once delegated to the city in that behalf having been withdrawn. 2. The private property of individuals within the limits of the territory of the city cannot be subjected to the payment of the debts of the city, except through taxation. The doctrine of some of the States, that such property can be reached directly on execution against the municipality, has not been generally accepted. 3. The power of taxation is legislative, and cannot be exercised otherwise than under the authority of the legislature. 4. Taxes levied according to law before the repeal of the charter, other than such as were levied in obedience to the special requirement of contracts entered into under the authority of law, and such as were levied under judicial direction for the payment of judgments recovered against the city, cannot be col

3 Feistel v. King's College, 10 Beav. 491.

11 Stevens v. Davison, 18 Grat. (Va.) 819; Davis v. Gray, 16 Wall. 203; Bar4 Blanchard v. Cawthorne, 4 Simons, ton v. Barbour, 104 U. S. 126. 566.

5 Palmer v. Vaughan, 3 Swanst. 173. Knapp v. Williams, 4 Ves. 430, note; Dumville v. Ashbrooke, 3 Russ. 98, note. 7 Jefferys v. Smith, 1 J. & W. 298. 8 Morris v. Elme, 1 Ves. Jr. 139.

9 Const v. Harris, T. & R. 496, 528.

10 Chaplin v. Young, 6 L. T. (N. s.) 97; Kelley v. Hutton, 17 W. R. 425.

12 Powell v. Waldron, 89 N. Y. 328; In re Ketchum, 1 Fed. R. 840; In re Werder, 15 Fed. R. 789; Hyde v. Woods, 94 U. S. 523; Platt v. Jones, 96 N. Y. 24. 13 Re Mayer, L. R. 3 P. & M. 39.

14 Meriwether v. Garrett, 102 U. S. 472, 484.