Davis v. Miller-Link Lumber Co.
| Decision Date | 05 January 1924 |
| Docket Number | 4175. |
| Citation | 296 F. 649 |
| Parties | DAVIS, Federal Agent and Director General of Railroads, v. MILLER-LINK LUMBER CO. et al. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Appeal from the District Court of the United States for the Eastern District of Texas; W. Lee Estes, Judge.
Robert H. Kelley, of Houston, Tex., for appellant.
C. L Carter, of Houston, Tex. (Conrad J. Landram, of Houston Tex., on the brief), for appellees.
Before WALKER and BRYAN, Circuit Judges, and GRUBB, District Judge.
On October 22, 1920, a creditor of the appellee, Miller-Link Lumber Company (herein called the debtor), filed in the court below a creditors' bill, alleging the debtor's solvency, but showing that its affairs were in such a condition that insolvency would inevitably result unless protection be extended by the court. The bill contained prayers that a receiver or receivers of all the property and assets of the debtor be appointed, that such property and assets be marshaled and administered under the orders of the court, that the court 'enforce and decree the rights liens, and equities of the creditors of the defendant as same may be finally ascertained and decreed by this court in and to each and every portion of the property and assets of the defendant, and make distribution thereof as equity may require,' and for 'such other and further relief as the nature and circumstances of the cause may require. ' On the same day the debtor filed an answer, which admitted the allegations of the bill and contained the following:
'For further answer in its behalf, this defendant says that it admits the necessity for the appointment of a receiver as prayed for by the plaintiffs, and that it joins in the prayer of plaintiffs herein for the appointment of a receiver for the properties of this defendant, to the end that same may be administered as a whole and for the benefit and interest of all parties concerned.'
Following the submission of the cause on the bill and the answer thereto, the court, on October 26, 1920, appointed receivers in pursuance of the prayers of the bill and the answer thereto. On August 22, 1922, the appellant by leave of the court filed a petition in intervention in the cause. That petition contained allegations to the following effect: That receivers were appointed as above alleged, and at the time of the filing of the petition were duly qualified and acting receivers of said debtor; that petitioner's predecessor in office 'was from September 12, 1919, to February 29, 1920, both inclusive, in possession and control of the Orange & Northwestern Railroad, a railroad property owned by the Orange & Northwestern Railroad Company, a corporation, using, maintaining, and operating the same'; that by contracts in writing entered into prior to, and in full force and effect during, the last-mentioned period the debtor had been granted the license and privilege of operating its logging trains over certain portions of said Orange & Northwestern Railroad, the contracts providing for the payment by the debtor of a trackage charge of $1 per train mile; that a specified part of the sums due by the debtor for trackage during the last-mentioned period became due and owing to petitioner's predecessor in his official capacity, and such balance remains due and payable under the terms of said contracts; that such indebtedness is in fact owed to the United States of America; that the debtor 'is insolvent, its properties and assets having been placed in the hands of the defendant receivers by this court in this cause, the said receivership being in truth and in fact a voluntary assignment of the properties and assets of said lumber company to the defendant receivers, acting under orders of this court'; and 'that by virtue of the premises, and by virtue of the terms and provisions of section 3466 of the Revised Statutes of the United States (Comp. St. Sec. 6372), the said indebtedness ought to and of right should be paid prior and in preference to all other indebtedness of the defendant lumber company.' The petition prayed that the alleged debt be allowed as a preferred claim against the properties in the hands of the receivers, and that the receivers be ordered and directed to pay such debt in preference to all other indebtedness of the debtor.
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