Birmingham state herald. (Birmingham, Ala.) 1895-1897, 1897-01-31
Al Able Dissenting Opinion
By Justice Coleman.

cry in trover for a horse converted by a
corporation. Every element of this equi-
ty may exist as well against a private
as against a public corporation, and
against bond creditors of the one as well
as the other. The right to be asserted
is obviously the same whatever the char
acter in this respect of the corporation.
The wrong done TO the employees is the
same-the misrepresentation of the fund
for the payment of their wages. And
the remedy for the effectuation of the
right and the redress of the wrong is APP
piled upon considerations which take no
account of whether the corporation
whose earnings have thus been wrong
fully diverted from the payment of its
employees is a railroad company, or
manufacturing company, or mining
company. The diversion of the fund be-
ing shown and the equity being thus
made to appear, the redress is accorded
the equity is declared and effectuated by
courts of chancery upon the broad ana
beneficent maxim of equity and Jurispru-
dence which imposes, or authorizes the
court to impose, upon every su1tor ask
ing equitable relief the duty and burden
of doing equity; and we have not heard
or seen 1t suggested that this principle
is applicable more to one sutton than an
other or more to a public than private
corporation. The necessity for the appli-
cation of this equita BILE doctrine for CIV
ing preference to claims of employees for
wages is doubtless more frequent in rail-
road cases, but that does not argue that
the facts which authorize 1t cannot as
we'll exist in other cases. So there is
more necessity ordinarily for a railroad
corporation to be kept going concern"
becauce of the duty 1t owes the public
and the character of it's business, ana
hence it is true that the facts stated cons
shutting the equity of the doctrine in
the third category, supra, exist more fire.
quently in respect of railroad property.
But there may well be, from the point
of view of the bondholders, as much
necessity to keep the works of private
corporation going in order to protect ana
preserve the property, which is the bond
holders security, as also to earn income
for the payment of current expenses and
the principle and interest OF the bonds.
And the necessity of keeping the corpo-
ration going concern is in all cases
gagged, not from the standpoint OF the
public, but from the standpoint of the
bondholders, and for the purpose of de-
termining, not what injury the public
would have suffered from the stoppage
of the works, nor how they have been
benefited by the continuation of the bust.
ness, but what injury the bondholder
would have suffered from such stoppage
In the loss of net income and in the
diminution of the value OF the property,
with view to measuring the dement's
he has received from the labor of en-
ployes in continuing to carry on the OPP
erations of the corporation. The dam
ages and loss to the bondholder from a
stoppage of the operations of railroad
would generally be greater than from
the stoppage of the works of mining
company; but whether greater or less,
they stand upon the same footing as
measure of the benefit accruing to him
from the labor which prevented their in
Fiction upon him; the difference is one
of quantity and not of kind" 1t must
be observed that the equity here as
tr ,ok ~ do to
statute, or agreement to that effect, in
favor of the wages of laborers and OPP
eratives and the accounts of supply or
material men for labor done and supplies
furnished recently before the appoint
ment of a receiver" and until paid made
a prior charge upon the gross income
proceeding from such consideration, or II
such income has been otherwise expend-
ed then upon the corpus into which con-
sideration entered. The predicate for
the argument is, that the gross income
belongs to the laborers and operatives
and material men, which in one for an
other has been diverted from them and
converted directly or indirectly to the
use benefit and behoof of the bondhold-
ers. to whom in equity and good con-
science 1t does not be,ong. whether the
mortgages securing the bonds in terms
embrace income or not until these wages
and material men have been paid We
have italicized the words which are made
the pillars of the argument. Is 1t fact,
that the gross income covered by a prior
executed mortgage known to the par
ties. belongs in any sense to the laborer
or material man as matter of equal or
equitable right: and that 1t does not be-
long to the bondholder although by con-
tract he has secured prior lien, which
lien existed and which the laborer and
material men knew existed when the
services were rendered and the supplies
or material were furnished? Have we
discovered or invented legal x ray
which exposes to the judicial eye an
imperfection in the old doctrine of con-
tract on personal credit or manifests
asunsound, the rule which declares con-
tracts to be sacred and inviolabe? If
the income belongs to the laborer he
ought to be able to recover 1t in an ac-
tion for money had and received, and
not by Judgment for services rendered.
IF he or the material man has lien upon
or prior claim to the income, or upon
the CORPUS into which the labor or ma
terial has entered" as an abstract and
perfect equity" Independent of con-
tract or statute, the judicial mind for
q century or more has been grossly at
fault. The interventions of legislatures
to provide for labor and material fur
nished. and the study and worry of
courts to adjust the rights of contractors
and prior mortgages under these statu-
tory enactments, were to a great degree
superfiuous and labor lost for If the doc
trine now commended for be sound. there
arose from the facts, without applica-
ton and enforcement. If the doctrine
now commended for is sound, there must
arise on every farm, in every manufac-
tory, mine and Enterprise in which Ia
Dor is performed and material furnished
from which a gross income is derived
the same rights and equity. Independent
of and superior to the claims of all other
creditors without regard to previous or
subsequent contracts. If the perfect
equity exist, the arbitrary limitation by
some courts TO six months within which
such claims may be enforced is a tyrani-
cal usurpation by the courts. We cam
not reasonably presume that the distin-
guished court which rendered the de-
cision of Fosdick VS.. Schall. supra and
subsequent decisions in line with 1t. did
not clearly perceive the full force of the
argument and abstract equity" now
insisted upon successfully for the first
time in this or any other court. at least
within the knowledge of the writer. and
apprehend the nature and consequences
involved. That court did not attempt
to justify the new rule adopted upon
the ground that the petitioners had an
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