The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-12-15
Tired Women

debt is - operating expense. because y Is
a consequence Of operation. and 50 Tar as
the owner 81 the railroad Is concerned Il
Il unavoidable. Tor IL is not possible 10 sc
cure IN the service Of any railroad serv-
ants and agents entirely free from human
inarmitles, and the liability which the law
creates in such case Is not inferior in
merit 10 a debt arising out OF "A contract
Claims for personal injuries. inflicted IN
the operation of railroads while IN the
hands OF receivers. are generally trea ted
as expense OF the recefvershtp, and pay
able a. other operating expenses This Is
so because the expenses Of settling such
claims are IN fact operating expenses.
Limit on Mortgages Rights.
To permit the mortgages to suddenly
place the property and ~ revenue beyond
the peach Of legal process for the eoliee-
ton 81 debts as r. done by the appoint
rnent Of receivers in foreclosure proceed
lngs. and refuse permission 10 the receivers
to pay previously contracted obligations
necessarily Incurred in operation. would
not only be dishonest. hut injurious 10 the
security holders. for IL would destroy red
IT, without which railroads cannot De cp-
Grated for the nature OF the business =
such that immediate cash payment Is i'm
practicable. From necessity, therefore,
has arisen the practice OF courts OF equity
10 apply the revenues coming TO receivers
materials furnished and similar obtiga-
tlons created tn the legitimate conduct of
transportation business, and such prac-
tlce cannot be regarded mere ar
Ditrary exercise of power by the courts,
but Is rather the application OF legal rules
founded upon necessity and the assent OF
the mortgages implied from the cireun-
stances OF their accepting as security for
their Investments mortgages upon this
kind OF property. and permitting the Same
TO remain IN the possession OF and be op-
Grated on the credit system by the mort
gagors. A railroad corporation cannot
lawfully plunge into general speculation.
and in the strife to acquire control of other
transportation lines. or speculate IN
land or other property in remote
places and by such transactions
burden Itself with debts which may
outrank In priority d previously ex-
listing mortgage upon its property.
Judge jenkins Reversed.
THE petitioners, by executing a super
sedeas bond. protected the property of the
railroad company and the claim Is en-
titled to rank as a current operating ex-
peuse | do not overlook the fact that
authority to pay the O'Brien judgment has
been petitioned for by the receivers, and
that their petition has been denied by he
United States court for the eastern district
Of Wisconsin. But / cannot regard the
decision then made as a final adjudication
OF the matter by a court OF competent 1u-
risdction. The petitioners were not parties
To the proceedings; they were not accorded
the right TO be heard, or 10 appeal from
e the decision, therefore they are not bound
by It. That there should be harmony and
consistency in the decisions of the several
courts exercising jurisdiction IN the az
mnistration OF the affairs of the Northern
Pacific IN the pending foreclosure pro-
ceedings. must be conceded, but | feel con-
strained TO say that the receivers have
been heretofore authorized to issue re-
celvers' certificates for several millions Of
dollars "A large portion OF which has oeen
expended. as shown by the records, in pay
Ing off what has been termed the hoa-ing
debt of the corporation, which includes
liabilities contracted in divers different
transactions not connected with the op-
Grafton OF the Northern Pacific railroad.
or business within the scope of powers
conferred by its charter, and | consider
that there would be Just grounds for re-
proach II the courts, while on the one
hand permitting such liabilities 10 rank as
preferential claims should. on the other
hand. fail 10 recognize the equity n the
petition of these suTeties.'
For the foregoing reasons and upon au-
thor!ty OF cases cited. the court directs
that an order be issued requiring Receig yer
Rurleigh 20 pay IN fun the % Br!en judy
ment and all costs OF the suit pend.n x
against the petitioners. on or before De
comher 81. 1876,