El Paso herald. (El Paso, Tex.) 1901-1931, 1910-04-26

The master fully recognizes the prin-
ciple declared binding in all similar
cases; but in the one under considera-
| ton, the receivers certificate If issued,
will not be to provide funds for the
preservation and mana cement of the
plant, as it exists, but to make addition
al improvements not required for its
preservation or management 1t is true
Instances have occurred where receivers
for railways have been authorized by
courts to make extensions through the
issuance Of certificates but, so far as
the master is informed, liens upon the
completed and operating parts of the
roads have never been subordinated TO
such certificates, nor have the rates
upon traffic and travel been Increased.
1t should be borne in mind that in this
controversy no creditor of the COM
pany has as vet appeared to urge
his claim.
Ellis Case Cited.
As to Ellis VS.. Water Co it is to be
observed that the company was placed
in the hands Of a receiver upon the
ground that it was insolvent-that the
receiver was appointed under the Act
of April .. 1887 claws of Texas), which
authorizes the appointment of re-
.ceiVer in cases where a corporation
has been dissolved, or is insolvent, or in
imminent danger of insolvency, or has
forfeited its corporate rights (Sec-
ton 3D. The property Of the company
was sold under a decree of the court,
and the proceeds ordered TO be dis
tributed according TO section Of the
amendatory Act of March 19, 1889.
which is as follows:
Receivers Power.
Section g. All moneys that come
into the hands of a receiver as such
receiver he
First, to the payment of all court costs
Of the suit; second, TO the payment of
all wages of employees due by the re-
ceiver; third, to the payment of all
debts due by the receiver for materials
and supplies purchased during the re-
ownership by the receiver for the i'm
provement Of the property in his hands
as receiver; fourth. to the payment of
all debts due for betterments and i'm
provements done during the receiver
ship to the property in his hands as
such receiver; fifth, to the payment OF
all claims and accounts against the
receiver on contracts made by the re-
ceiyer during the receivership, and for
all claims for stock and personal IN
jury claims against said receiver ac-
cruing during said receiFership, and
all judgments rendered against said re-
ceiver for personal injuries and for
stock killed: sixth all judgments re-
covered against the person or persons
or corporations in suits brought, be-
fore the appointment of a receiver in
the action, and said claims shall have
a preference lien on all Of the moneys
coming into the hands of the receiver,
which are the earnings of the property
in his hands, and the court shall see
that the money coming into the hands
of the receiver as earnings of the prop
erty in his hands is paid out on the
claims against said receiver in the or
der of their preference as named above
and 1t shall be the duty of the receiver
to pay the funds in his hands which
are the earnings of the property while
in his hands. as receiver on the claims
against him in order Of preference
named above.
Property MOrtgaged.
Ellis. to whom the property of the
company had been mortgaged prior to
the institution of the suit but after
the enactment of the original and
amended statutes. did not object to the
action of the court at any stage of the
proceedings. until the final decree was
entered. The Judgment of the lower
courts postponing the payment of the
mortgage claim of Ellis as provided in
the statutes were affirmed II is to be
noted that the receivers certificates.
as understood by the court, were is
sued for the purpose of keeping tie
company's works in operation, and that
the property yielded no net income iur-
ing the receivers administration---he
inference arising that the works were
operated at a loss, at least 10 the
amount of the certificates outstanding
at the time of the trial CSC Texas, 10
I'D.
AS the case at bar now stands, it is
not believed TO be ION all tours" with
either of the cases cited and that, I'M
less the pleadings be amended, it is not |
competent for the court to increase the
rates or to allow the receivers certifi-
Gates issued to construct permanent
improvements or additions to the plant.
a preference over the existing deed Of
trust.
Completion of Plant.
But. should the conclusion Of the
court be otherwise as to its power,
either as to the increase OF rates or as |
to the subordination of the existing
deed of trust to the receivers certifi- |
ties, the master recommends to the
court that the manager for the COM
pany CIV. z. Anderson be required to
complete the plant as early as may be
practicable, so as to comply with the
ordinances and as recommended by him |
in his testimony (Tr., 3z0-324. and de-
PENDANTS Exhibit Al, and that the re-
ceiver be authorized and directed to |
issue certificates in such amounts as
will secure the sum of s442,736 for the |
purpose
The plant, when thus completed, will |
supply the city and its residents with |
an adequate quantity of mesa water |
for four or five years next0it being |
assumed that the city's growth will con-
tinue as during the past five years.
just Compensation.
9 Since his appointment the matter /
has diligently endeavored TO acquaint |
himself with every authority accessible, |
that would enable him to reach a de- /
termination, fair and just to the city /
and the company, Of the value of the !
property Of the company. and also of !
the compensation that should be al /
lowed the company. and in reaching his /
he has borne in mind that /
the company is entitled to a fair return |
upon the value Of that which it en- |
ploys for the public service; that the |
utmost It can ask is that it receive |
what under all the circumstances is such |
he