no statutory lien therefor exists, they shall be entitled to the same status, so that statutory and equitable liens may rest on a like basis." 37 A claimant to a preference of a class for which no provision has been made by a previous order or decree cannot regularly apply upon a motion, but he must plead his claim in a petition for an intervention. The attorneys of both the receiver and the complainant should have notice of the hearing of such a claim before a master. An entry upon the books of the mortgagor showing the claim to be good is, in the absence of suspicious circumstances, prima facie proof." An order directing a receiver to carry out his corporation's. contracts does not necessarily give those who claim damages for a breach of those contracts a preference over lien-holders." Whether this doctrine applies to the foreclosure of any mortgage except those made by railway, telegraph, or other companies to which are delegated the right of eminent domain, is very doubtful. It applies to a mortgage made by an electriclight company. It has been extended to a receivership of a mine.44

43

§ 244. Property over which receivers may be appointed. A receiver may be appointed to preserve and take possession of every kind of property, whether the same be what is termed corporeal or incorporeal, which can be seized by execution at law or which constitutes equitable assets.1 Thus receivers have been appointed to collect and hold the profits of a rec

37 Treat, J., in Blair v. St. Louis, H. R. 436. In Hanna v. State Trust Co. & K. R. Co., 19 Fed. R. 861, 862. (C. C. A.), 70 Fed. R. 2, a receiver of a land company was authorized to issue certificates to raise money to

38 Grand Trunk Ry. Co. v. Central

Vt. R. Co., 91 Fed. R. 561.

39 Blair v. St. Louis, H. & K. R. Co., pay taxes, but not to carry out con19 Fed. R. 861, 862. tracts with purchasers and continue the business.

40 Blair v. St. Louis, H. & K. R. Co., 19 Fed. R. 861, 862, Treat, J.; s. c., 22 Fed. R. 471, 472, Brewer, J.

41 Olyphant v. St. Louis O. & S. Co., 28 Fed. R. 729.

42 Wood v. Guarantee Tr. & S. D. Co., 128 U. S. 416; Raht v. Attrill, 106 N. Y. 423; Reyburn v. Consumers' Gas, F. & L. Co., 29 Fed. R. 561; Fidelity L. & S. D. Co. v. Shenandoah Iron Co., 42 Fed. R. 372; Seventh Nat. Bank v. Shenandoah Iron Co., 35 Fed.

43 Illinois Tr. & Sav. Bank v. Ot tumwa El. Ry. Co., 89 Fed. R. 235. 44 Reinhart v. Augusta M. & L. Co., 94 Fed. R. 901.

§ 244. 1 Davis v. Gray, 16 Wall. 203, 217; Davis v. Duke of Marlborough, 2 Swanst. 108, 127; Blanchard v. Cawthorne, 4 Sim. 566. See Palmer v. Vaughan, 3 Swanst. 173; Meriwether v. Garrett, 102 U. S. 472, 501.

6

4

tory,2 of a college fellowship,' of a patent for an invention, of the offices of a master forester in a royal forest," and of a county clerk of peace; of the tolls of a turnpike; to manage and collect the profits of mines, plantations," a theatre,10 a newspaper," a hotel," a ship," a line of telegraph," and a railroad; 15 to exercise the right to sell a conditional right of membership in an exchange; 16 and to take possession of the estate of an intestate with power to apply for letters of administration." After the repeal of the charter of the city of Memphis, a receiver was appointed to take possession of all its property which could be subjected to the payment of its debts.18 But the Supreme Court has refused to direct such a receiver to levy taxes,18 or to collect those already levied.19

2 Silver v. Bishop of Norwich, 3 Swanst. 112; White v. Bishop of Peterborough, 3 Swanst. 109.

17

819; Davis v. Gray, 16 Wall. 203; Barton v. Barbour, 104 U. S. 126; infra, $246. Before the passage of a stat

3 Feistel v. King's College, 10 Beav. ute allowing it to be done, the Eng491.

78.

lish court held that a receiver could

4 Parkhurst v. Kinsman, 2 Blatchf. not be appointed to manage a railroad, Gardner v. London, C. & D.

5 Blanchard v. Cawthorne, 4 Sim. Ry. Co., L. R. 2 Ch. App. 201; but

566.

6 Palmer v. Vaughan, 3 Swanst. 173. 7 Knapp v. Williams, 4 Ves. 430, note; Dumville v. Ashbrooke, 3 Russ. 98, note.

8 Jefferys v. Smith, 1 J. & W. 298. 9 Morris v. Elme, 1 Ves. Jr. 139. 10 Const v. Harris, T. & R. 496, 528. 11 Chaplin v. Young, 6 L. T. (N. S.) 97; Kelley v. Hutton, 17 W. R. 425. 12 Raht v. Attrill, 106 N. Y. 423; Cater v. Woodbury, 3 App. D. C. 60. 13 Cronenwett v. Boston & A. Tr. Co., 95 Fed. R. 52. In this case the receiver, who had been appointed under a creditor's bill against an insolvent corporation, was directed to distribute the insurance money after the vessel's loss in accordance with the priorities that would be recognized by a court of admiralty.

such an appointment is authorized without statutory authority in this country, and even in England a receiver might always be appointed to receive the tolls of a railroad. Hopkins v. W. & B. C. Co., L. R. 6 Eq. 437; Jones on Railroad Securities, § 456. A lugubrious picture of the result of such appointments was drawn by Miller, J., in Barton v. Barbour, 104 U. S. 126, 137, 138. See also the language of the Governor of Texas quoted in Mercantile Tr. Co. v. Texas & P. Ry. Co., 51 Fed. R. 529, 533, 537.

16 Powell v. Waldron, 89 N. Y. 328; In re Ketchum, 1 Fed. R. 840; In re Werder, 15 Fed. R. 789; Hyde v. Woods, 94 U. S. 523; Platt v. Jones, 96 N. Y. 24.

17 Re Mayer, L. R. 3 P. & M. 39.
18"1. Property held for public uses,

14 United L. Tel. Co. v. Boston S. D. such as public buildings, streets, & T. Co., 147 U. S. 431. squares, parks, promenades, wharves.

15 Stevens v. Davison, 18 Grat. (Va.) landing-places, fire-engines, hose and

19 Thompson v. Allen County, 115 U. S. 550, 558.

§ 245. Powers of receivers in general.-The powers of a receiver, in the absence of any special authority given in the order for his appointment, are very limited. He can take possession of the property which he is appointed to receive.' If any of it is land under lease, he can accept attornment and payment of rent and arrears of rent from the tenants. He can give notice to quit to tenants from year to year; and in States where the remedy by distress still exists, he may distrain for rents not more than one year in arrear. He may also pay out small sums of money in customary repairs of the property which he holds in trust, and in some cases insure it against fire. Beyond this, he can do nothing without the express authority of the court. He cannot sue to recover debts or other property belonging to the estate, nor even, it seems, defend hose-carriages, engine-houses, engi- instrumentality of a court of channeering instruments, and generally everything held for governmental purposes, cannot be subjected to the payment of the debts of the city. Its public character forbids such an appropriation. Upon the repeal of the charter of the city, such property passed under the immediate control of the State, the power once delegated to the city in that behalf hav⚫ ing been withdrawn. 2. The private property of individuals within the limits of the territory of the city cannot be subjected to the payment of the debts of the city, except through taxation. The doctrine of some of the States, that such property can be reached directly on execution against the municipality, has not been generally accepted. 3. The power of taxation is legislative, and cannot be exercised otherwise than under the authority of the legislature. 4. Taxes levied according to law before the repeal of the charter, other than such as were levied in obedience to the special requirement of contracts entered into under the authority of law, and such as were levied under judicial direction for the payment of judgments recovered against the city, cannot be collected through the

cery at the instance of creditors of the city. Such taxes can only be collected under authority from the legislature. If no such authority exists, the remedy is by appeal to the legislature, which alone can grant relief." Chief Justice Waite in Meriwether v. Garrett, 102 U. S. 472, 501. Upon the first three propositions the court was unanimous. The fourth was decided by a majority only. See a criticism of this case by Judge Baxter in Garrett v. City of Memphis, 5 Fed. R. 860.

1

§ 245. Daniell's Ch. Pr. (2d Am. ed.) 1987, 1988.

2 Codrington v. Johnstone, 1 Beav. 520; McDonnell v. White, 11 H. L. C. 570.

3 Doe v. Reed, 12 East, 57, 59.

4 Pitt v. Snowden, 3 Atk. 750; Brandon v. Brandon, 5 Madd. 473; Davis v. Gray, 16 Wall. 203, 218.

5 Atty. Gen. v. Vigor, 11 Ves. 563; Daniell's Ch. Pr. (2d Am. ed.) 1990. 6 Thompson v. Phoenix Ins. Co., 136 U. S. 287, 293, 294; Brown v. Hazlehurst, 54 Md. 26, 28.

Davis v. Gray, 16 Wall. 203, 218; Smith v. McCullough, 104 U. S. 25, 29. 8 Wynne v. Lord Newborough, 1 Ves. Jr. 164; s. c., 3 Brown, Ch. C.

suits or actions brought against him, nor spend any money whatever which belongs to the estate, except such very small sums as are above referred to," without an order authorizing him to do so. If, however, he does any of these things without leave, and the court determines that the money thus expended has been beneficial to the estate, his expenditures for that purpose may be allowed him;" otherwise, he must make good all loss thereby occasioned.12 It seems that an unauthorized contract made by him with a stranger may be ratified by an order of the court made before the stranger has given notice of his intention to abandon it.13 A fire insurance company which has received a premium from a receiver cannot in an action on the policy dispute his authority to insure the property he holds; 14 but it has been held that the holder of a note assigned to him by receivers after it was due, could not recover its amount unless he proved that the court had authorized the assignment.15 It seems that an order giving a receiver authority to sell carries with it authority to execute and deliver to the purchaser a deed; 16 but if not, a subsequent confirmation by the court of a sale irregularly made validates from that time a deed previously executed by the receiver.17 It has been said that "a purchaser under a deed from a receiver is not bound to examine all the proceedings in the case in which the receiver is appointed. It is sufficient for him to see that there is a suit in equity, or was one, in which the court appointed a receiver of property; that such receiver was authorized by the court to sell the property; that a sale was made under such authority; that the sale was confirmed by the court; and that the deed accurately recites the property or interest thus sold. If the title of the property was vested in the receiver by an order of the court, it would in that case pass to

88; Green v. Winter, 1 J. Ch. (N. Y.) 60.

9 Swaby v. Dickon, 5 Sim. 629. 10 Atty. Gen. v. Vigor, 11 Ves. 563. 11 Tempest v. Ord, 2 Meriv. 55; Blunt v. Clitherow, 6 Ves. 799; Thompson v. Phoenix Ins. Co., 136 U. S. 287, 294.

12 Atty. Gen. v. Vigor, 11 Ves. 563. 13 Koontz v. Northern Bank, 16 Wall. 196; Smith v. McCullough, 101

U. S. 25, 29. Cf. Girard L. A. & Tr.
Co. v. Cooper, 51 Fed. R. 332.

14 Thompson v. Phoenix Ins. Co., 136 U. S. 287, 294, 295.

15 The Clara A. M'Intyre, 94 Fed. R. 552.

16 Koontz v. Northern Bank, 16 Wall. 196, 201.

17 Koontz v. Northern Bank, 16 Wall. 196.

the purchaser. He is not bound to inquire whether any errors intervened in the action of the court, or irregularities were committed by the receiver in the sale, any more than a purchaser under execution upon a judgment is bound to look into the errors and irregularities of a court on the trial of the case, or of the officer in enforcing its process." 18 An order authorizing a receiver to borrow money to expend in building an unfinished portion of a railroad does not authorize him to contract for municipal aid in such construction.19 An order authorizing a receiver to make a contract is construed strictly in favor of the estate.20 After the execution of a contract has been authorized by the court, the order will not ordinarily be revoked except in case of fraud.21 A receiver cannot accomplish by estoppel or waiver what he has no power to do directly. Without authority from the court a receiver cannot by receipt of rent or otherwise bind the parties or a subsequent purchaser to recognize a lease.23 The court may, however, either in the original order of appointment or subsequently, give a receiver very extensive powers. It is usual in the order appointing a receiver to give him power to bring and defend suits or actions affecting the estate. Other and much more extensive authority, such as to borrow money needed for the proper administration of his trust, and issue as security therefor certificates giving their owner a first lien upon the estate; " to contract for the construction of a bridge; 25 to pay a faithful and deserving employee his wages during the time that he is kept from work by the result of an injury received while at work

18 Mr. Justice Field in Koontz v. Northern Bank, 16 Wall. 196, 202. 19 Smith v. McCullough, 104 U. S. 25, 29.

20 Farmers' L. & Tr. Co. v. Logansport, C. & S. W. Ry. Co., 4 Fed. R. 184.

21 Wabash, St. L. & P. Ry. Co. v. Central Trust Co., 22 Fed. R. 269. But see Weeks v. Weeks, 106 N. Y. 626.

22 Van Dyck v. McQuade, 85 N. Y. 616; Farmers' L. & Tr. Co. v. Chicago & A. Ry. Co., 44 Fed. R. 653, 659. But see Central Tr. Co. v. Ohio Central R. Co., 23 Fed. R. 306; Armstrong v. Armstrong, L. R. 12 Eq. 614;

24

Koontz v. Northern Bank, 16 Wall. 196; Stanton v. Ala. & C. R. Co., 31 Fed. R. 585.

23 Farmers' L. & Tr. Co. v. Chicago & A. Ry. Co., 44 Fed. R. 653, 659.

24 Wallace v. Loomis, 97 U. S. 146; infra, § 247. An order directing the receiver of a hotel to carry on and manage the business of the hotel as previously carried on, was held to authorize him to incur the customary debts in carrying on that business. Cate v. Woodbury, 3 App. D. C. 60. 25 La Crosse Railroad Bridge, 2 Dill.

465.