Illinois Trust & Savings Bank v. Pacific Railway Co.

Beatty, C. J. These are motions to dismiss the appeal of Alvord and Brown from an order made in the above-entitled action before the entry of the final judgment.

The action is to foreclose a mortgage of the property of a street railway company. The defendants and cross-complainants, Brown and Alvord—as trustees of the holders of certain bonds of the corporation—have the first mortgage lien, which by the order appealed from is subordinated to the indebtedness contracted by two receivers of the mortgaged property — one (Trask) appointed in this action, and the other (Crank) previously appointed by another department of the same court in another action.

It seems that Crank had been operating the road for a year or two under the orders of the court, when he was superseded by his own consent and the consent of all the parties to this action by the appointment of Trask. Thereupon he presented a report and account of his receivership, with an application for [409]its settlement and allowance and for his discharge. Notice of said application was duly served on all the parties to this action, and Alvord and Brown appeared by their attorneys at the hearing and contested the account. After the hearing the court made an order reciting the fact that Crank had been duly appointed receiver of the property t>f the railway company in an action commenced by one Bussell; that he took charge of the road and other property; that he operated the road under the orders of the court, and in so doing received and expended money and incurred a considerable indebtedness to the Puente Oil Company, the L. A. Oil Burning and Supply Company, and others, for necessary and proper expenses; for which indebtedness he had by direction of the court issued receiver’s certificates. After other recitals not material here the account of the receiver Crank is approved, and he is directed to turn the property over to Trask, who is required to assume and pay any balance remaining due from Crank, including the indebtedness evidenced by said receiver’s certificates, out of the net receipts from the operation of the road, and if this shall prove insufficient then out of the first proceeds of the sale of the property. In short, the order in effect and in express terms makes the indebtedness contracted by the receiver appointed in another action a lien prior and paramount to the liens of any and all of the mortgages, judgments, etc., which are in litigation in this action, and directs the immediate application of the net receipts of the road to its discharge so far as they will go. This order was made March 2, 1893. On July 13,1893, a final decree of foreclosure was entered in the action directing the sale of the mortgaged property subject to the lien of the creditors of the receiver.