Northern Pac. R. v. Lamont

CALDWELL, Circuit Judge, after stating the case as above, delivered the opinion of the court. The money for which the intervener recovered judgment was in fact due to him for providing, furnishing, and maintaining for the railroad company at Fargo waiting rooms for its passengers, office room for its ticket agents, and a convenient place for its employés to board and lodge at reduced rates. To defeat the preferential character of this claim, the court would have to be satisfied that waiting rooms for passengers and an office for the ticket agents are not essential or necessary, at a town of several thousand population, on the Northern Pacific Railroad. We are asked, in effect, to hold that passengers on that road, while waiting to take passage on its trains, must endure the rigors of a North Dakota climate without shelter, and that its ticket agent must be content with an office on the public commons, and carry his tickets in his pocket or his hat. The road is in straits financially, but we are unwilling to believe that its business is so unremunerative, and its patronage so slender as to justify it in dispensing with waiting rooms and a ticket office at one of the most important towns on its line west of the Mississippi river. Decided by the strictest rules applicable to this class of cases, the intervener’s claim was clearly a preferential debt. A preferential debt-is not barred though contracted more than six months before the appointment of a receiver. As to such debts, there is no arbitrary “six-months rule,” as has been often decided. Hale v. Frost, 99 U. S. 389; Burnham v. Bowen, 111 U. S. 776, 4 Sup. Ct. 675; Central [25] Trust Co. v. St. Louis, A. & T. Ry. Co., 41 Fed. 551; Central Trust Co. v. Wabash, St. L. & P. Ry. Co., 30 Fed. 332; Farmers’ Loan & Trust Co. v. Kansas City, W. & N. W. R. Co., 53 Fed. 182, and note; Clark v. Railroad Co.,1 66 Fed. 803. In the case of Trust Co. v. Morrison, 125 U. S. 591, 8 Sup. Ct. 1004, a liability incurred by the intervener as surety for a railroad company on an injunction bond to stay execution on a judgment at law against the company, executed more than six years before the date of filing the petition of intervention, was held to be a preferential claim. In this case a portion of the intervener’s claim accrued within six months preceding the appointment of the receivers, but the six-months limitation in the order appointing the receivers has no effect in barring meritorious preferential claims. This is conceded in the brief of the learned counsel for the appellants, where it is said: “We do not mean to be understood as claiming or urging that claims might not and have not arisen already in the progress of this litigation which in equity and good conscience should be paid out of the earnings in the hands of the receivers, and which, if not already within the scope of the order, should bo the subject of a special order to that effect; hut clearly there must be a limit somewhere, beyond which courts of equity should not go in allowing such preferences. * * *” The right of preference is one that attaches to the debt, and not to the person of the original creditor; consequently the right passes to an assignee of the debt. Union Trust Co. v. Walker, 107 U. S. 597, 2 Sup. Ct. 299. The decree of the circuit court is affirmed, with interest and costs. 14 C. C. A. 112,