The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-09-17
ONE OF MR.. BUTLER's LEGAL VIC
TORIES.

-
The late Hon. John NJ. Butler. whose
too early death is deeply lamented, took
pride In the fact that he had an active.
and 1t is believed. influential part in
securing the establishment of the prin-
ciple that when a railroad goes into the
hands OF a receiver money due for sup
plies and the unpaid and accruing
wages Of its employees shall be a pre-
ferred claim and constitute a prior lien
on its earnings. even to the exclusion
OF first mortgage b~ondholders.
The leading case in which the princi-
pie was first declared by the Supreme
Court Of the United States was Fosdick
vs. Scholl, decided at the October term
OF the court in 1878, and reported in ].
Otto, 235. Mr. Butler was not of coun-
sci In that case. but he had other cases
pending at the same time, in which the
same principle was involved. In fact,
Circuit Judge Drummond had already
decided the main point in his favor in a
case in which the old l., B. & w. rail-
road was defendant, but the question
had still to be passed upon by the high
est court. At the suggestion OF Judge
Drummond, Mr.. Butler asked and OBJ
tanned permission to file a brief in the
Scholl case. He not only filed a brief,
but argued the case orally in the SUI
preme Court. taking a leading part in
the debate. A PREDATORY note to his
brief said:
We are not OF counsel in the above en-
titled cause and do not wish to be under
stood as attempting or intending to brief
this particular case upon its facts and
record. Being interested In cases involv-
Ing the general principles to be settled
by the decision in this case, we desire
under the permission granted by this court.
questions involved
His brief dealt with general princi-
pies without reference to the facts or
record of the case at bar. This involved
the priority OF a claim for the rent of
cars used by a receiver. while Mr.. But
ler's cases involved the priority of a
claim for wages. but he was quick to
recognize the identity of the principles.
and hence his desire to appear IN the
Scholl case. Up to that time the drift
of the decisions had been in favor of
first mortgage b~ondholders, and Mr..
Butler was trying to turn the current
in favor OF the superior rights OF the
f~urnishers Of supplies and employees of
the road. He was. in fact. a pioneer
in the work OF obtaining recognition
of the superior equity of this class of
claims to those Of bondholders. Mr.. But
Ter was always logical. and this brief
was a model OF clear and forcible rea-
soning. Its subdivisions furnish SO good
an example of his logical method that
they are worth copying:
tirst-The appointment OF a receiver. to
lake possession OF and operate a railway,
Is a matter Of discretion. vested in the
In view Of all the circumstances surround
Ing the case. The court, In the exercise
or to tn's sra alset the aop nnS aee . oe ! r 70 asny
Second-The court, having the right to
wholly deny the motion for a receiver or
ton. grant the appointment upon such
terms and conditions as IL believes equity
and good conscience require.
to prefer debts created or incurred by or
through their receivers and give them
priority over the mortgage lien. even al,
for purposes other than the preservation of
the property is admitted as settled law.
ce EOur, Of ! saii S : has IN a sRe' pdmsr E 70 re- re-
income, Of debts necessarily. Contracted in
inC UIODcI UldIla8CIicIll All ODtidtIOn VI
the road and due for labor or supplies .es-
sential to its operation to such an amount
and for such a period prior to the receiver
sary for the full conservation of the prop
erty, taking into consideration its public
cnarac.er; i.s COCO Will, us .eT I'm ana
velopment OF its business andS>its future
welfare and value
ordinary real estate mortgage. 1t is a con-
tract peculiar in Its character and cannot
be measured by, or limited within. the old
rules Of law applicable to real estate mort
cages.
Sixth-If the court. at the time of the
appointment of a receiver, does make the
msnt out of the property. or its income.
OF back operating dues and expenses for a
fixed period and does embody these terms
and conditions In the original order of ap-
pointment and II the parties: to the suit
accept the receivership upon the terms and
conditions imposed, they cannot
court to enforce performance Of the terms
and conditions imposed.
These propositions. arranged as or
derby as the foundation and super
structure Of a building. embraced every
principle and covered the whole ground
OF the question at issue. Each one of
them was presented. in clear and forci-
bic language from a legal, a philosoph-
ical and an equitable point of view. The
decision of the court practically sus-
tanned them all. The case at once be-
came a leading one, and has been fol-
lowed from that time to the present. 1t
has been repeatedly attacked from
various directions, but 1t has not been
shaken. A prominent railroad lawyer
of Chicago. who has been engaged for
years trying to have 1t overthrown. has
termed 1t sentimental equity" his
theory being that mechanics. opera
tives. employees and furnishers of sup
plies have no rights which the bond
holders are bound to respect But the
decision stands as the controlling law
in all cases of railroad receiverships.
1t Is an enduring monument Of Mr.. But
ler's sense of justice. and of his legal
acumen and professional ability.
NOT A MATTER OF SURPRISE.