Savannah, F. & W. Ry. Co. v. Jacksonville, T. & K. W. Ry. Co.

MAXEY, District Judge, after stating the case, delivered the opinion of the court. The appellant claims an indebtedness of $45,352.32 against the appellee the Jacksonville, Tampa & Key West Railway Company, on account of terminal facilities supplied the latter from August 1,1888, to July 30,1892, and insists that its demand is a preferential claim, superior iu dignity to that of the bondholders, aud hence entitled in priority of payment. The Jacksonville, Tampa & Key West Railway Company went into the hands of a receiver, July --3, 1892; aud the receiver was authorized by the order of the court 1.0 pay, out of the earnings and income of the property, for such repairs, supplies, labor, and services as, in his judgment, should be necessary or proper to conserve and operate the railway, and to pay the indebtedness of the railway company incurred for expenses of operation during the six months next preceding the orden of appointment. The account attached as an exhibit to the appellant's petition of intervention, if we understand its confused statement, embraces the period beginning August 1, 1888, to the appointment of the receiver, July 23, 1892, and also the. interval between* the elate of such appointment, and July 30, 1892. In the operation of the railway during the latter period, the receives- availed himself of the terminal -facilities supplied by the appellant. It appears from the petition that the Jacksonville, Tampa & Key West Railway Company had no terminal facilities at Jacksonville. Those furnished were therefore indispensable to the successful operation and management of the railway. They added to the income, and enhanced the value, of the property in the receiver’s hands. Indeed, without the facilities supplied by the appellant, the receiver could have operated the railway only a.t a serious disadvantage. It is t herefore only right and proper that he should pay for the use and enjoyment of the property, certainly for the period of its occupancy b.v him (Thomas v. Car Co., 149 U. S. 95, 13 Sup. Ct. 824; Oil Co. v. Wilson, 142 U. S. 313, 12 Sup. Ct. 235; Carswell v. Trust Co., 20 C. C. A. 282, 74 Fed. 88; Railroad Co. v. Lamont, 16 C. C. A. 364, 69 Fed. 23), not necessarily at the rate fixed by the contract, but the reasonable rental value of its use, to be determined by the proof (Carswell v. Trust Co., supra). [38] The appellant, then, being entitled to a partial recovery on the case made by the petition of intervention, the court erred in sustaining the demurrers and dismissing the suit. It is a fundamental rule of equity pleading that “if any part of the bill is good, and entitles the complainant either to relief or discovery, a demurrer to the whole bill cannot be sustained.” Livingston v. Story, 9 Pet. 658; Pacific R. Co. of Missouri v. Missouri Pac. Ry. Co., 111 U. S. 520, 4 Sup. Ct. 583; Heath v. Railway Co., 8 Blatchf. 107, Fed. Cas. No. 6,306. As the case must be reheard in the circuit court, it is deemed proper to say that we would not be understood as restricting the appellant’s measure of recovery, under the contract, to the period covered by the receivership; nor do we hold that it may recover, for that period, for all the items included in the account. An expression of opinion as to these questions is for the present reserved. As the case is presented, we must decline also to pass upon other difficult and important questions arising upon the assignment of errors. These involve, among others, the application of the landlord’s lien laws of Florida, and suggest, rather than directly raise, the more serious question as to the effect of a continuance of the contract, pending the receivership, upon the rights of the holders of the various issues of bonds. Ho steps appear to have been taken by .any of the parties at interest, since the railway was placed in the hands of a receiver, to annul or modify the pre-existing contract of appellant and the Jacksonville, Tampa & Key West Eailway Company. Hence the-relationship which the receiver bears to that contract (New York, P. & O. R. Co. v. New York, L. E. & W. R. Co., 58 Fed. 268), and the effect of its continuance, present questions which should only be determined upon a record more specific and distinct than the one before us. These questions are merely suggested on this appeal that the appellant may, if deemed advisable, so amend its petition and exhibit as to present in a simple and lucid manner the precise grounds relied upon for a recovery, to the end that the court may act advisedly and with due intelligence in deciding questions of such gravity and importance to the parties interested. Upon this appeal the sole point decided is that the petition of intervention, considered in connection with the annexed statement of account, discloses that the appellant is entitled, at least, to a partial recovery, and that, therefore, the demurrers should not have been sustained and the petition dismissed. For the error indicated, the decree of the circuit court is reversed, and the cause remanded, with directions to set aside the order sustaining the demurrers and dismissing the petition; the cause thereafter to proceed according to the established rules of equity practice.