lected through the instrumentality of a court of chancery at the instance of creditors of the city. Such taxes can only be collected under authority from the legislature. If no such authority exists, the remedy is by appeal to the legislature, which alone can grant relief. Whether taxes levied in obedience to contract obligations, or under judicial direction, can be collected through a receiver appointed by a court of chancery, if there be no public officer charged with authority from the legislature to perform that duty, is not decided, as the case does not require it." 15 In a subsequent case, the Supreme Court held that taxes already levied could in no case be collected through a receiver. 16 Until the passage of a statute allowing it to be done, the English courts held that a receiver could not be appointed to manage a railroad; 17 but such an appointment is authorized and is very frequent in this country,18 and even in England a receiver might always be appointed to receive the tolls of a railroad.19 A lugubrious picture of the result of such appointments has been drawn by Mr. Justice Miller: "The rapid absorption of the business of the country of every character by corporations, while productive of much good to the public, is beginning also to develop many evils, not the least of which arises from their failure to pay debts and perform the duties which by the terms of their organization they assumed. One of the most efficient remedies for the failure to pay, when it arises from inability, is to place the corporation in the hands of a receiver, that its affairs may be wound up, its debts discharged, and the remaining assets, if any there be, distributed among its stockholders. Of the beneficial results of this remedy there can be little doubt. When it is applied with despatch, and the effects of the insolvent corporation are faithfully used to meet its liabilities, and its dead body is buried out of sight as soon as possible, no objection can be made to the procedure, and all courts and good citizens should contribute, as far as they may, to this desirable object. In regard, however, to a 15 Chief Justice Waite in Meriwether v. Garrett, 102 U. S. 472, 501. Upon the first three propositions the court was unaniThe fourth was decided by a majority only. See a criticism of this case by Judge Baxter in Garrett v. City of Memphis, 5 Fed. R. 860. mous. 17 Gardner v. London, Chatham & Dover Ry. Co., L. R. 2 Ch. App. 201; Jones on Railroad Securities, § 456. 18 Stevens v. Davison, 18 Grat. (Va.) 819; Davis v. Gray, 16 Wall. 203; Barton v. Barbour, 104 U. S. 126, 137, 138. 19 Hopkins v. Worcester & Birmingham 16 Thompson v. Allen County, 115 Canal Co., L. R. 6 Eq. 437; Jones on U. S. 550, 558. Railroad Securities, § 456. certain class of corporations, a class whose operations are as important to the interests of the community and as intimately connected with its business and social habits as any other, the appointment of receivers, as well as the power conferred on them, and the duration of their office, has made a progress which, since it is wholly the work of courts of chancery and not of legislatures, may well suggest a pause for consideration. It will not be necessary to any observing mind to say that I allude to railroad corporations. Of the fifty or more who own or have owned the many thousand miles of railway in my judicial circuit, I think I speak within limits in saying that hardly half a dozen have escaped the hands of the receiver. If these receivers had been appointed to sell the roads, collect the means of the companies, and pay their debts, it might have been well enough; but this was hardly ever done. It is never done now. It is not the purpose for which a receiver is appointed. He generally takes the property out of the hands of its owner, operates the road in his own way, with an occasional suggestion from the court, which he recognizes as a sort of partner in the business, sometimes, though very rarely, pays some money on the debts of the corporation, but quite as often adds to them, and injures prior creditors by creating a new and superior lien on the property pledged to them." 20 In a recent case, the court refused to appoint a receiver of a disused and independent railroad track in a case where there was a scramble for its possession; saying, in reference to the power to appoint a receiver: "If we should carry this to the extent to which your 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." 21 § 245. Powers of Receivers in general. The powers of a receiver, in the absence of any special authority given in the order for his appointment, are very limited. He can take possession of the property which he is appointed to receive. If any of it is land under lease, he can accept attornment and payment of rent and arrears of rent from the tenants.2 He can give notice to quit to tenants from year to year; and in States where the remedy by 20 Barton v. Barbour, 104 U. S. 126, 137, 138, in the dissenting opinion. 21 Brewer and Treat, JJ., in St. Louis, K. C. & C. R. R. Co. v. Dewees, 23 Fed. R. 519. VOL. I.-27 § 245. 1 Daniell's Ch. Pr. (2d Am. ed.) 1987, 1988. 2 Codrington v.Johnstone, 1 Beav. 520; McDonnell v. White, 11 H. L. C. 570. Doe v. Reed, 12 East, 57, 59. distress still exists, he may distrain for rents not more than one year in arrear. He may also pay out small sums of money in customary repairs of the property which he holds in trust,5 and in some cases insure it against fire. Beyond this, he can do nothing without the express authority of the court. He cannot sue to recover debts or other property belonging to the estate, nor even, it seems, defend suits or actions brought against him, nor spend any money whatever which belongs to the estate, except such very small sums as are above referred to,10 without an order authorizing him to do so. If, however, he does any of these things without leave, and the court determines that the money thus expended has been beneficial to the estate, his expenditures for that purpose may be allowed him; 11 otherwise, he must make good all loss thereby occasioned.12 It seems that an unauthorized contract made by him with a stranger may be ratified by an order of the court made before the stranger has given notice of his intention to abandon it.13 A fire insurance company which has received a premium from a receiver cannot in an action on the policy dispute his authority to insure the property he holds.1 It seems that an order giving a receiver authority to sell carries with it authority to execute and deliver to the purchaser a deed; 15 but if not, a subsequent confirmation by the court of a sale irregularly made validates from that time a deed previously executed by the receiver.16 It has been said that "a purchaser under a deed from a receiver is not bound to examine all the proceedings in the case in which the receiver is appointed. It is sufficient for him to see that there is a suit in equity, or was one, in which the court appointed a receiver of property; that such receiver was au 4 Pitt v. Snowden, 3 Atk. 750; Brandon v. Brandon, 5 Madd. 473; Davis v. Gray, 16 Wall. 203, 218. 5 Attorney-General v. Vigor, 11 Ves. 563; Dantell's Ch. Pr. (2d Am. ed.) 1990. 6 Thompson v. Phoenix Ins. Co, 136 U. S. 287, 293-294; Brown v. Hazlehurst, 54 Maryland, 26, 28. 7 Davis v. Gray, 16 Wall. 203, 218; 9 Swaby v. Dickon, 5 Simons, 629. 11 Tempest v. Ord, 2 Meriv. 55; Blunt v. Clitherow, 6 Ves. 799; Thompson v. Phoenix Ins. Co., 136 U. S. 287, 294. 12 Attorney-General v. Vigor, 11 Ves. 563. 18 Koontz v. Northern Bank, 16 Wall. 196; Smith v. McCullough, 104 U. S. 25, 29. 14 Thompson v. Phoenix Ins. Co., 136 U. S. 287, 294–295. 15 Koontz v. Northern Bank, 16 Wall. 196, 201. 16 Koontz v. Northern Bank, 16 Wall. 196. thorized by the court to sell the property; that a sale was made under such authority; that the sale was confirmed by the court; and that the deed accurately recites the property or interest thus sold. If the title of the property was vested in the receiver by an order of the court, it would in that case pass to the purchaser. He is not bound to inquire whether any errors intervened in the action of the court, or irregularities were committed by the receiver in the sale, any more than a purchaser under execution upon a judgment is bound to look into the errors and irregu larities of a court on the trial of the case, or of the officer in enforcing its process." An order authorizing a receiver to borrow money to expend in building an unfinished portion of a railroad does not authorize him to contract for municipal aid in such construction.18 An order authorizing a receiver to make a contract is construed strictly in favor of the estate.19 After the execution of a contract has been authorized by the court, the order will not ordinarily be revoked except in case of fraud.20 A receiver cannot accomplish by estoppel or waiver what he has no power to do directly.21 Without authority from the court a receiver cannot by receipt of rent or otherwise bind the parties or a subsequent purchaser to recognize a lease.22 The court may, however, either in the original order of appointment or subsequently, give a receiver very extensive powers. It is usual in the order appointing a receiver to give him power to bring and defend suits or actions affecting the estate, and to set and let such of it as consists of land. Other and much more extensive authority, such as to borrow money needed for the proper administration of his trust, and issue as security therefor certificates giving their owner a first lien upon the estate; 23 to contract for the construction of a bridge; 24 to pay an employee his wages during the time that he is kept from work by the result of an 17 Mr. Justice Field in Koontz v. Northern Bank, 16 Wall. 196, 202. 29. Central Trust Co. v. Ohio Central R. R. Co., 23 Fed. R. 306; Armstrong v. Arm18 Smith v. McCullough, 104 U. S. 25, strong, L. R. 12 Eq. 614; Koontz v. 19 Farmers' L. & Tr. Co. v. Logansport, C. & S. W. Ry. Co., 4 Fed. R. 184. 2) Wabash, St. L. & P. Ry. Co. v. Central Trust Co., 22 Fed. R. 269. But see Weeks v. Weeks, 106 N. Y. 626. 21 Van Dyck v. McQuade, 85 N. Y. 616; Farmers' L. & Tr. Co. v. Chicago & A. Ry. Co., 44 Fed. R. 653, 659. But see Northern Bank, 16 Wall. 196; Stanton v. 22 Farmers' L. & Tr. Co. v. Chicago & A. Ry. Co., 44 Fed. R. 653, 659. 23 Wallace v. Loomis, 97 U. S. 146. See § 247. 24 LaCrosse Railroad Bridge, 2 Dill. 465. 25 injury received while at work for the receiver, without contributory negligence, but for which the receiver is not responsible; and in Ireland, to spend money in relieving and giving employment to poor tenants, for the reason that they may be enabled in the future to pay their rent more regularly,26 have been given to receivers. The order appointing a receiver of land usually contains a clause empowering him to set and let the same. Even with this, it seems, that without special authority he cannot let any part thereof so as to bind the estate for a longer period of time than is authorized by the Statute of Frauds,28 but that a lease made for a longer time would bind a tenant who had accepted it.29 It is doubtful whether a receiver has the right to use a patent under a license given the person over whose estate he was appointed.30 A receiver of a dissolved corporation may sustain a bill to compel the assignment to him of a patent by the legal owner when the corporation had the equitable title to the same.31 § 246. Powers of Receivers of Railroads. Very extensive powers are often granted to the receivers of railroads.1 The Supreme Court has said of them: "In the progress and growth of equity jurisdiction it has become usual to clothe such officers with much larger powers than were formerly conferred. In some of the States they are by statutes charged with the duty of settling the affairs of certain corporations when insolvent, and are authorized expressly to sue in their own names. It is not unusual for courts of equity to put them in charge of the railroads of companies which have fallen into financial embarrassment, and to require them to operate such roads, until the difficulties are removed, or such arrangements are made that the roads can be sold with the least sacrifice of the interests of those concerned. In all such cases the receiver is the right arm of the jurisdiction invoked. As regards the statutes, we see no reason why a court of equity, in the exercise of its undoubted authority, may not 25 Missouri Pac. Ry. Co. v. Texas & P. Ry. Co., 33 Fed. R. 701; s. c. Blaener Intervenor, 41 Fed. R. 319. 26 Jackson v. Jackson, 2 Hogan, 238. 27 Daniell's Ch. Pr. (2d Am. ed.) 1989. 29 Kerr on Receivers (2d Am. ed.), 210, 211. 29 Dancer v. Hastings, 4 Bingham, 2; Kerr on Receivers (2d Am. ed.), 211. 30 Compare Montross v. Mabie, 30 Fed. R. 234; with Curran v. Craig, 22 Fed. R. 101. 31 McCulloh v. Association Horlgerie Suisse, 45 Fed. R. 479. § 246. Davis v. Gray, 16 Wall. 203, 219, 220; Cowdrey v. Railroad Co., 1 Woods, 331, 336. |