The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-12-15
JENKINS Is REVERSED
Judge Hanford Decides Con-
trary TO Milwaukee Judge.
ON THE o'eRIEN JUDGMENT.
Damage Claims Are Expenses OF ke-
Ownership or tho y. Il. and Prior
20 the Mortgage.

T,-sr1e5sa ~ - Norfnsru Pacific Railroad
Company, % tne Judgment Tor 500. Sc
cured bg David O'Brien several years ago
which Is IN direct opposition 70 DECISION
made b. Judge jenkins. 81 the United
States circuit court for the Eastern ds-
frfct Of Wisconsin. The decision II inter-
srslna particularly for rs exposition o. TIE
ronsrg and duties Of railroads the nights
OF bondhoders n contradisunction -
rhoge OF other creditors. and The powers ~
the receivers appointed BY tire United
States courts. The point Of the decision.
as applicable 20 the O'Brien judgment case.
IS that ne who takes mortgage on raj
yoad does 80 wltn the knowledge that the
road must be operated, and that its earn
fngs must, so far as necessary. De a5-
sorped IN the payment Of operating eN-
penses ard aiscaargtug burdens which the
iaw places upon sucn property
TIE decision gives The details. already
published. OF the Judgment secured by
O'Brisn IN ne supreme court Of tAe terri
Hory for personal injuries caused BY the al
legged nosilgence Of the company, ITS afilr-
snafInn by Tho state supreme court. and the
sups-z~deas bond for sl2.eo0 given BY the
company. with Chauneey ". GrigRs and
Addison q. Foster as Etrreties. pendine the
trial OF the c1ugs in the United States s'i-
rrerne court Grggs and Foster are the
Intervening petitioners in the ease. as
OfBrien lad began proceedings 20 coiiect
Tho Judgment from ths surr.ie The case
was dismissed by tho United States su-
pTeme court for want Of jurisdiction.
Afterward the receivers OF the Northern
Pacific applied 20 the circuit court for the
Eastern district Of Wisconsin for author
1ty 10 pay the judgment. so as 20 protect
tho suretles on the suporsedcss bond which
application was opposed BY certain hold
erK OF mortgage bonds OF the railroad COM
psny. and the application was denied 10y
Judge Jenkins. Judge Hanford SAYS the
intervening petitioners were not parties 10
the proceedings In the Wisconsin court.
and had come 10 him With A petition 10 di-
rect the receiver 20 protect them from loss
By reason OF their liability upon the bond.
The petitioners had sworn that they exc
cuted the bond simply as matter Of ac-
commodation. without advantage 10 them
selves but tina, It was Of benefit 10 the
company and 10 the holderc OF It's secur.-
sies.
PeculIarities OF Railroads.
The payment Of the claim had been
scented TO by the solicitors for the Farmers
loan and Trust Company. the trustee for
the bondholders. and has been resisted by
representatives OF "a minority Of junior
bondholders, on the ground that payment
out OF funds In the hands OF the receiver
advances the claim to the rank of first
lien. and TO that extent dlsplacee the mort
cages given TO secure the several issues
OF bonds BY such a preference. Il Is said.
the man who becomes a creditor without
contracting for security. has 80 neverthe-
less; while he who contracts for security
has n not. The decision says this argument
assumes too much for II treats railroad
property the same other private prop
erty. which the owner may use or not use.
as he chooses, or mortgage or dispose OF.
without having regard for the public. But
a railway Is public highway. designed for
public use. a corporation owning IL enjoys
franchise which makes IL. In a measure,
sfff tod he
lie by keeping the road In operation. Rail-
roads cannot be operated without mourning
expense and liabilities for injuries acci-
dentally inflicted. The laws of the coun-
try require that the expense tn operating
railroads and liabilities arising from inju-
rIes inflicted in their operation. shall be
paid and he who takes mortgage on
railroad does so with the knowledge that
the road must be operated. and that its
earsings must so far as necessary, be ah-
sorbed In the payment of operating eN-
penses and disCharging the burdens which
The law places upon such property. Such
burdens are alike incidental 20 such prop
erty when under mortgage as when unin-
numbered and Il Is bur fair 10 construc the
mortgage as other mortgages are con
strued by giving effect 90 the manifest in
tention of the parties IN view Of The conse-
ouenccs which they must have had In con-
temptation.
when men take a mortgage upon rail-
road and leave IL in the control of the
nortgagor. IL Is plain they intend the
mortgagor shall operate it. and pay the
wages OF employees. etc, and that only the
surplus earnings remaining after such
payments can be available for payments
of mortgage debts.
Priority OF Claims.
Judge uanford SAYS IL has become
habit I'm this country for the courts. upon
the application Of creditors. 10 take charge
Of railroads when their owners become in
solvent and unable 10 meet their contract
liabilities and perform their duties 10 the
public in maintaining for public use these
highways. This Is FOR the purpose of keep
ing the road in operation as a going con-
Germ When "A receiver steps In ne takes
the property and It's revenue. and the prac-
tice OF the courts. generally acquieSccd in.
recognizes as a great rule. founded upon
necessity this That the receiver shall
out Of the revenue coming into his bands.
pay the current expenses FOR wages and
materials. etc. TIA thc regular course OF
business. whether such current expenses
h. for work performed or material fur
uished or liabilities contracted anterior To
his accession - power as receiver or sub
sequemt thereto. There can he no Just
ground for disctim lnatiuS hy allowing one
class 81 current expenses &c ue paid ana
refusing payment for anN other expense
unavoidable incurred On thc operation Of
the railroad. AS. for instance. "a Judgment
for a personal iujury TO t passenger ar ~m-
ployc. OK for jamaEc to merchant. ira
transit T. Il be said THAT th, security
holder receives $50 dement's from thc or-
cuvreneeS which Etvn rise to liabilities OF
the latter description. ana therefore as
such cre3itor. bas not contributed any
thing to enhance the va3sc go thc security.
his claim sho1.d not he H'ss~ei as superior
70 tN.t - Tire mortgage holder. % may ha
saiA With eeHal rronrt~iN aat force that
the cnkinvff conductor ant tratnm"p