Court Opinion

ID: 9828585
Source: CourtListenerOpinion
Date Created: 2023-09-01 18:31:08.277085+00
Date Added: 2024-06-11T07:42:50.672802
License: Public Domain

On Motion for Rehearing.
Appellant was not a party to the receivership proceedings, nor was it shown that it had any knowledge of such proceedings until the property had been taken possession of by the receiver. It then sued to foreclose its lien and made the receiver a party to the suit. The parties to whom the certificates were issued were put on notice by the receivership proceedings that appellant had a prior superior lien on the property. No authority has been cited that holds that the mere discovery that a receiver had been appointed would estop a lien holder from asserting his lien as against the holders of receiver’s certificates. The authorities cited by appellant make no such holding. In all those cases the lien holders were parties to the receivership proceedings.
As said in Kneeland v. Luce, 141 U. S. 491, 12 Sup. Ct. 32, 35 L. Ed. 830: “The bondholders had no legal mortgage thereon, but only an equitable lien. The bondholders, who now object to the priority of the receiver’s certificates, were parties to the suit in which the decree was rendered, by their trustees and committee. No appeal was taken from that decree, nor were any steps taken to set it aside. * * * Under all the circumstances of the case, the bondholders are precluded from claiming priority over the receiver’s certificates, which were issued for the pur*417pose of preserving the mortgaged property.”
In the case of Union Trust Co. v. Illinois Mid. R. R. Co., 117 U. S. 434, 6 Sup. Ct. 809, 29 L. Ed. 963, it was said: “As to receiver’s certificates issued, with the sanction of the court, after the trustees become parties, the purchasers and holders should be accorded such rights as, by the settled principles of equity, are accorded to those who 'deal with judicial tribunals having jurisdiction in the premises.”
If there were “many interveners, having secured and unsecured claims,” as stated by appellee, the record in this case fails to disclose that fact.
There is a statement of facts in this record, agreed to by the parties and approved by the court, from which this court obtained the facts found by it, and not from any “ex parte statement of the mortgage creditor.” In that statement it appears that the debt due to appellant was for the purchase money of the property held by the receiver, and that the property was covered by a mortgage lien in favor of appellant to secure the payment of the purchase money, and that any other lien on the property “was subordinate and junior to that lien.” It is further stated in the statement of facts “that the Houston Icé & Brewing Company was not made a party to the suit.” There is nothing in the record to support the assertion that “each separate piece of machinery” is mortgaged, “and the mortgage held by as many different persons.” On the other hand, the record shows only two mortgages on the property, the first held by appellant and the second by the man who induced the appointment of a receiver.
Of course this court cannot consider matters of fact recited in the motion for rehearing, but not found in the record, and this court is impelled to the view that the property has been managed so as to incur a heavy debt by the facts of the case as presented by the record. It is stated in the bill of exceptions, which is by agreement made the statement of facts, “that the income from said plant was in fact insufficient to pay the expenses of operation,” and, in running the plant and mating repairs, attorney’s fees, and compensation for the receiver, had amounted to $1,600. It further appears from the statement of facts: “That on May 14, 1913, and for a considerable time prior thereto, the said Glint, receiver, had ceased operating the Ice & Gin Company of Harlingen, and that said plant has been and is now idle. That the said receiver was unable to operate said plant so that it would pay operating expenses.” This may not be “bad management” of the property, but it is certainly management which will result in disaster to the interests of appellant. With such management it is only a question of time when the property will be consumed in expenses.
The motion for rehearing is overruled.