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THE DANGERS OF RECEIVERSHIPS. 237 



distribute the proceeds equitably ; in fact, ho may, with propriety go 

 further : for instance, if part of the property in his charge was a ware- 

 house, stored with goods, from which the roof were blown, there is no 

 doubt he would be sustained in using funds in his hands to put on a 

 new roof, as it is self-evident that such an expenditure is for the bene- 

 fit of the creditors. The court may, if part of the estate is a factory 

 filled with partly-finished goods, go further, and authorize the assignee 

 to finish the same. But what would be thought of the assignee who 

 went beyond this ; who used the funds in his hands not only to mend 

 roofs and finish goods, but to build new mills ; who paid interest to 

 some creditors and refused others ; who, in a word, treated the prop- 

 erty as though it were his own ? Would he not be brought up with a 

 sharp turn, and either displaced or made distinctly to understand that 

 he was exceeding his authority, and would be held personally respon- 

 sible ? And are not the duties of an assignee, and that of a court 

 taking possession of an insolvent estate, essentially the same ? I think 

 they are, and that our courts in the license they have allowed their 

 ofiicers, the receivers, have gradually but surely been drifting away 

 from both the law and equity. 



It is held that receivers' certificates are a lien preceding all mort- 

 gages, and were receivers restricted to the lines I have laid down, 

 there would be some plausibility in the argument, as, if the money so 

 raised were only used for what is absolutely essential to conserve the 

 property, and is manifestly for the benefit of all, it may be just that 

 all should bear the burden. But even this is an open question, as, what 

 might be essential to a junior creditor, may not be so to one at the 

 head of the line. For instance, in the case of a railroad, with a first 

 mortgage of $5,000,000, and subsequent mortgages amounting to more 

 than $100,000,000, it can hardly be claimed that the 15,000,000 would 

 be imperiled were even so essential a thing as a bridge left unbuilt if 

 it fell down, as it is plain, if the court use proper diligence in deciding 

 the case, a decision must be reached, and a sale had before their mar- 

 gin of safety is gone, and by consequence it would seem but justice 

 that receivers' certificates should only take rank as a lien preceding 

 the class of creditors who ask for the appointment of receivers ; and that 

 this would work no hardship is self-evident, as, if those certificates 

 were not marketable and the work really essential, the next preceding 

 class of creditors would, in their own interest, make the application ; 

 it is true that the answer to this is that the trustees of all preceding 

 mortgages are sometimes (perhaps always) notified of the application 

 for permission to issue certificates, and that if they, as the ofiicial rep- 

 resentatives of the mortgagees, do not object, the court has a right to 

 suppose there is no objection to the certificates becoming a lien pre- 

 ceding their mortgages ; and while this is technically true, still it is 

 unfortunately a fact that the average trustee will not act until com- 

 pelled to do so by the bondholders, and frequently the first the latter 



