University of South Carolina Libraries
?v I United States Circuit Court of Appeals. ly:. ; FOURTH CIRCUIT?No. 58. Boston Safe Deposit and Trust Company, Annellant. VERSUS Richmond and Danville Railroad Company, Appellee. ' - v s In the case of The Finance Company of Pennsylvania, et al., Complainants, versus The Charleston, Cincinnati A Appeal from Circuit Court of" United States OA for the District of South Cnrollna. Argument of T. r. COTIIRAN, Counsel for the Richmond and. I>anvillo .Railroad. Company, Appellee. it-* . <r~-' On December 10, 1890, the Finance Company of Pennsylvania, and others, complainants, filed their bill in the Circuit Court nf the United States, for the District of South Carolina, against the ? Charleston, Cincinnati and Chicago ^Railroad Company, The Boston Safe Deposit and Trust Company, and others, alleging: (1.) The incorporation of said Railroad Company, for the purpose of constructing and operating a railroad from Charleston, S. C., to Ashland, Ky., a distance of 620 miles. (2.) The execution and delivery to the Boston Safe and Deposit Company,' on August 9, 1887, of a mortgage upon said Railroad, to secure an L issue of bonds to the amount of $15,500,000, which were delivered to said Boston Company. (3.) A contract for construction of said said railroad with a construction company. (4.) A partial performance of this contract, and the delivery to the Construction Company of over $7,000,000 of these bonds; and the purchase by complainants from said Company of a portion of said bonds. (5.) The completion and operation of a part of the Railroad. (6.) The insolvency of the Construction Company and its inability to complete its contract. That the portion completed is not self-sustaining. (7.) Subscriptions by certain municipalities. (8.) Insolvency of the Railroad Company. Its inability to complete the Road or to operate the completed portion; want of rolling stock ; suits pending; no credit with which to purchase fuel, oil, waste > and other necessary supplies; non-payment of employees for several months. They therefore prayed the appointment of a receiver. The Railroad Company and the Construction Company answered, join ing in the prayer. The Deposit Company (Trustee), admitted the first three paragraphs of the bill and required proof of the remainder. fc-.. On December 10, 1890, Samuel Lord was appointed temporary receiver. This order made no provision for payment of any balanees to connecting lines, or for the payment of any ante-receiv3r ?, ,r \ ' j ership indebtedness. On February 26,1891, D. H. Chamberlain was appointed permanent Receiver by an order of said Court, "with all the authority and duties prescribed in the order hereinbefore made, naming Samuel Lord, Esq., temporary Receiver." The said order'contained the following provision: " That said Receiver be further authorized to pay all the wages due to the employees, at the date * of the order appointing the temporary Receiver herein, for labor and services, within ninety days before the same, and also all balances due to other carriers and connecting lines and necessary to be paid for the conducting of the said railroad." On March 16, 1891, Chamberlain, the Receiver, filed his petition Aakimr to be allowed to issue 830.000 of certificates to Dav certain obligations found due and unpaid upon entering upon his duties as permanent Receiver, aggregating $48,901.93. These consisted of taxes, freight balances due on December 10, 1890, ' freight balances and freight due since that date, cross-ties, coal and other supplies. On March 17, 1891, the Court by an order, granted him such leave. With the cash on hand and the proceeds of these certificates, the Receiver stated in his petition, he would be able to pay off all said indebtedness except |o,247.12. This he proposed to pay, alon? with the future current expenses, out of the future current earnings. On August 4, 1891, The Richmond and Danville Railroad Company, filed its intervening petition, setting out the account against tne Railroad company in full, accruing both before the appointment of Mr. Lord and subsequently, and praying that it be paid out of the earnings of the Road. An order of reference was signed the same day, referring it to G. W. Dingle, Esq., Special Master, to take testimony and report. No proceedings were had under this order until after the sale of the road: there being no funds on hand with which to pay the account. ' A reference was held July 11, 1893, to take the testimony. The sale having taken place, the only question to be decided then was whether the interveners could enforce payment out of the proceeds in the hands of the Court?the corpus. This is shown by the admission of the counsel for the Trustee, at folio 25. In speaking of one of the items of the R. & D. It. R. account, he says: " This amount is admitted as to the fact that the work was done, the question raised is, that this amount is not entitled to priority over the mortgage, although a valid claim against the 3 C's Road. < The account consisted of four classes of items : (1) Amount due on account of claims $ 75 44 (2) 44 44 44 Blacksburg crossing.. 1,057 65 (3) " " " Freight 5,422 1)4 (4) " " " Freight balauces 8,095 58 Thfi first, lfpm was fnr r#?r?airu nf ton of/i om-i mno v?/%f - w- ? .. *w .w. V. VH4U| VVVt) (4UU WOO 11VU Wit tested. The second arose under a contract between the R. & D. R. R. and the C. C. & C. There is an overhead crossing at Blacksburg; the C. C. & C. R. R. running under the R. &. D. R. R. The R. & I). R. R. contracted to perfect this crossing and charge the cost of construction to the C. C. & C. The third item was for freight on shipments of coal, rails, cars, oil, &c., consigned to the C. C. & C. R. R. for its own use. These articles were turned over by the R. & D. R. R. agent to the C. C. & C. agent at Blacksburg, the R. & D. R. R. being charged with all back charges, and paying them. The fourth item was $8,095.58 balance on freight exchange, found to be due by the C. C. & C. to the R. & D. Upon the report of the Master the application of the intervener to be paid out of the proceeds of sale was argued before Judge a:.?rn 1-; .. .. cuuiuuiuu- v^vunoci i?ji uustw uiKKiiig' 110 objection to tue form of the petition but arguing solely the right of the petitioner to priority over the bond-holders. Judge Simonton's decree was filed 14th July, 1893, disallowing the second item, for crossing at Blacksburg, $1,007,05 and ordering that the "rest of the claim of the Richmond and Danville Railroad be allowed and be paid out of the proceeds of sale." On August 24, 1893, Judge Simonton filed a decretal order in the case. After referring to the decree of July 14, 1893, he directs the Special Master, the Receiver, to pay to the R. & 1). R. R. Company $13,421.95, with interest from December 11, 1890. This amount is made up of (1) Claims $75 44 (3) Freight 5,422 94 (4) Freight Exchange 8,095 58 $13,593 96 Less credits 172 01 $13,421 95 To this decree the Boston Safe and Deposit Company have; have filed assignment of errors, and their appeal has b<k?n allowed. The only two assignments of error are : (1) That the Court erred in ordering the sum of $5,422.94 ... . . made un of freight charges to be pai out of t lie proceeds of the sale. (2) That the Court erred in ordering the freight balanc $4,376.19 due by C. C. A C. It. It. Company to the It. & D. B It. Company to be paid out of the proceeds of sale. The second assignment of error is a misconception. Th item of $4,376.19 is the balance due by the Receiver of the C. C & C. It. It. to the R. & 1). It. R. as per statement on page 16 c the record. This accrued subsequent to the appointment of R< eeiver and as a matter of fact has been paid. That statemer has nothing to do with this intervention and should not have aj peared in the record. All that is involved in this appeal is th statement on page 15 of the Record. The finding therefore.thn we are entitled to be paid the freight balance $8,095.58 out of^h proceeds of sale is not excepted to. It is well to bear in mind the distinct findings of fact an law which appear in the circuit decree in reference to thi claim. Concerning the item of freight balances, $8,095.58, he says thi this is admitted. Concerning the item of $5,422.94 he says: "The sum < " 5,422.94 is made up of items of freight charges of the It. & I " R. R. against the C. C. & C. R. It. for cars and other article " of freight carried by the former Company for the latter name " Company, and delivered to it as consignee and owner. Th " R. &. 1). R. It. Company paid all the freight due to connectin " lines and now seeks re-payment." This is not excepted to an stands as an established fact. a /?iiz-k+ifr.'im t.hp nrrfpr nnnointincr the receiver, h (lllVl uuvmig r ? says: " The order in this ease prescribing the condition o which the court granted its aid, requires that all balances due 1 " other carriers and connecting lines necessary for conducting sai " railroad (be paid.)" This is a construction placed by hii upon the order which he signed. It is not appealed from an must stand as the law of the case. In reference to the character of the claim lie says : "In tl present ca^re the services rendered by the R. <fc D. R. R. to th C. C. & C. R. R. were essential to put it in operation and t keep it a going concern. Without them neither the railroa company could be kept up, nor could the mortgage security ha> any value." This is a finding of fact, not excepted to, an must also stand. The appellant only assigns as error that tl Circuit Judge ordered these claims to be paid out of the proceet of sale. The character of the claims he admits by not excep ing. The construction of the order he also admits. He shoul therefore be confined to the question "Should this claim of sue admitted character under an order of such admitted constructioi be ordered paid out of proceeds of sale ?" The rules of the Circuit Courts of Appeal provide that th appellant shall file an assignment of the errors which he intenc to urge on appeal, and that errors not so assigned will be disr garded. Foster's Fed. Pr. Sec. 428. ^ n r\ a .ttuie a. The statement of facts made by the Court below in any a< miralty or equity case is conclusive. Wiscart vs. Dauchy, 3 Ball. 321. But aside from this technical advantage, we will discuss tl terms of the order, the character of the claim and the law appl cable thereto. It will be remembered that the order appointing Mr. Loi temporary receiver contained no directions as to the payment < these specific claims. It simply directed him "to take posse sion of, hold and manage the same, and conduct all operatioi and business thereof in the manner and form usual 4nd necessai for the proper conduct of the business of the corporation." At the time of Mr. Lord's appointment there were large ob! gations due for wages, see bill ot complaint, page fi of the recor where it alleges : w That the employees of said railroad com par have not been paid their wages, as your complainant is inforn ed, for several months past." This is admitted by the answ< of the C. C. & C. R. R. and must have been true. The.cor pany was insolvent, owned no rolling stock, had no credit for tl purchase of coal, fuel, oil, waste, Ac. Soon after Mr. Lord's a] pointment he petitioned for and obtained leave to issue $18,000 i certificates for meeting these pressing obligations. He did n exercise this power, and on March 16, 1891, Receiver Chambe lain petitioned for and obtained leave to issue $30,000 of certifl cates with which to meet such obligations. They are set fori in his petition at page 20, and included among them are freigl balances, freight, cross ties, coal and other supplies. The iss ing of these certificates was necessarily .a charge upon the corpu If he was not required to pay these obligations out of the corpi of the estate, but only out of the earnings, why was the permi sion granted him ? The appellants here were parties to th; proceeding. Why did they stand by and allow their securii thus diminished if the order did not require the Receiver to p? these claims out of the corpus ? If the appellant objected to the clause in the order appointir Mr. Chamberlain he should have made his objection known thei " Whenever in the course of a receivership the court mak< " an order which the parties to the suit consider injurious to the " interests, it is their duty to file a motion at once asking tl " court to cancel or modify it." U. S. Trust Co. vs. R. R. 14 Sup. Ct. Rep. The item of $5,42104 was for freight on coal, cars, oil, greas rails, &c. In view dPthe allegations of the bill concerning tl insolvency of the railroad, its want of credit, Ac., it can hardl be doubted that these were necessary to keep it a " going coi eern." The fact that these consignments were allowed to ? into the hands of the C. C. & C. R. R without a demand, f< the freight shows that the R. & D. R. R. were looking to the equitable rights in the matter. If the R. & D. R. R. had demaw etl the freight for which they had a lien and had accepted someothi security the counsel may have appropriately cited the quotatic from 149 U. S. 95: " Such a provision shows that the car con pany was aware of the existence of -the outstanding bonds an protected itself by other method* than relying upon the possible o der of a court which might appint a receiver." Waiving tl lien enured to the benefit of these bond holders who claim thi by this waiver we have lost our equitable rights. The rulings of the Circuit Judge are amply sustained by tl following authorities: 44 The doctrine of Fosdick vs. Schall is that a court of Equit 44 may make it a condition of the issue of an order for the aj 44 pointment of a receiver, that certain outstanding debts of tr 44 company shall be paid from the income that may be collecte " by the receiver or from the proceeds of saie. Morgan vs. Texas, &c.. lt'y, 137 U. S. 171. " Among the well settled rules applicable to the appointmei 44 of a receiver in a suit for the foreclosure of a mortgage on 44 railroad are the following : 441. That the appointment of such a receiver is not a ma 44 ter of right, but rests in the sound discretion of the court, an 44 is a power to be exercised sparingly and with great caution. 44 2. That the court appointing a receiver-may impose sue 44 conditions as appear to be just and equitable, and the part 44 asking for and accepting the appointment of a receiver on tl " conditions imposed wui oe Douna inereuy.Fanners L. & T. Co. vs. Kansas, &c., R'y? 53 Fed. R. 184. " Many circumstances may exist which may make it nece " sary and indispensable to the business of the road and the pr " servation of the property for the receiver to pay pre-existin 44 debts of certain classes, cut of the earnings of the receivershi| " or even the corpus of the property, under the order of th " court, with a priority of lien. Yet the discretion to do t " should be exercised with very great care. The- payment < " such debts stands prima facie on a different basis from the pa; " ment of claims arising under the receivership, while it may L " brought within the principle of the latter by special circun " stances. It is easy to see that the payment of unpaid deb 1' for operating expenses, accrued within ninety days, due by " railroad company suddenly deprived of the control of its prope " ty, due to operatives in its employ, whose cessation from wor " simultaneously is to be deprecated, in the interests both of tl; " property and of the public, and the payment of limited amoun " due to other and connecting lines of ro:id for materials and ri " pairs and for unpaid ticket and freight balances, the outcou; " of indispensable business relations, where a stoppage of tl: " continuance of such business relations would be a probable r< " suit, in case of non-payment, the general consequence nivuivm 44 largely, also, the interests and accommodation of travel an 44 traffic, may well place such payments in the category of pa? 44 ments to preserve the mortgaged property in a large sense, Ij 44 maintaining the good will and integrity of the enterprise, an 44 entitle them to be made a tirst lien." Miltenberger vs. Logansport Railway Co. KM5 V. S. R. 311 & 312. 44 It is well understood that in the foreclosure of railroa 44 mortgages it often becomes necessary to provide for the pa? 44 inent of preferred claims, and to postpone all rights of ordinar 44 crditors, and even of mortgages to these preferred classes. U. S. Trust Co. vs. R. R. 14 Sup. Ct. R. 01. 44 In Thomas vs. Western Car Co. 140 U. S. It. 05 the Supren: 44 Court indicated the narrow limits to which an equity coui 44 should confine itself in allowing any unsecured claim to dis 44 place vested contract liens. Wages due employees, current op 44 eruting expenses, current balances of freight and ticket /none 44 arising from indispensable business relations and similar currei " uwrninff within ninety days, are rccognized as among th uuuw o . . " limited class of claims which in its discretion the court ma " allow to have priority." Bound vs. S. C. Ry. SB Fed. Rep. 47.'J. " There are only two exceptions, so far as ante-receivershi " debts are concerned, to the general rule as to the superiorit " of the mortgage lien : The first is that where current earr " ings have been used in paying bonded interest, purchasin " equipments, making permanent improvements, ?fcc., the mon " gage security is chargeable in equity with the restoration of tli " fund thus improperly devoted. The second exception is tha 44 where it is necessary to pay employees back wages in order t " retain their services, or to pay a debt for ante-receivershi " operating expenses in order to maintain business relation " with the claimant, and the retention of such mploye;1 " or the maintenance of such relations, as the case ma; d' " be, is indispensable to the welfare of the road, and such debts "Icannot be paid out of the income, the receiver may be authore " ized to raise the necessary funds by issuing certificates, L. Note to Blair vs. St Louis, &c., 22 Fed. Rep. 476. " The claim is quite different from those ordinary and necese " sary current expenses of operating a railroad contracted but |a /. " short time before a receivership, and which, by the sudden action >f " of the court in appointing a receiver are left unpaid." J- Bound vs. S. C. Ry. 58 Fed. Rep. 480. it Appellant contends that such priority can oe aiioweu m nu >- case, however equitable the claim may be, unless there has been e a diversion of the curren^earnings. The following authorities it are to the contrary : e " And it is error to suppose that such debts can only b? " given priority where there has been a diversion of the income d " of the road ; nor is it true that they can only be paid out ol is " the earnings of the road, and cannot be made a charge on the " corpus of the property. A diversion of the income is not esit " seutial to give them priority, and they may .be made a charge " on the corpus of the estate if the earnings are not sufficient to pay )f 44 them. Miltenberger vs. Railway Company, 10(J, U. S. 28(>,311,312 ). " Union Trust Co. vs. Illinois M. Ry. Co., 117 U. S. 434, 457, 463 is " Thomas vs. Railway Co., 30 Fed. Rep. 808. Nor is it essend " tial that the order for the payment of preferential debts should e 44 be made at the time, and as a condition, of appointing a re g 44 ceiver. The better practice is to do so, but, if such an ordei d 44 is not then made, it may be made afterwards. Central Trusi 44 Co. vs. St. Louis A. <fc T. Ry. Co., 41 Fed. Rep. 551; Fosdick vs ie ,4 Schall, supra; Blair vs. Railroad Co., 22 Fed. Rep. 471. It i* n 44 not to be implied from what is here said that a mortgagee of t :o 44 railroad can escape the payment of preferential debts by a fore d 44 closure of his mortgage without asking for a receiver. Liabil n 44 ities of a railroad company which fall within the definition o d 44 preferential debts, have priority over a mortgage on its roai 44 without regard to the question of recei%*ership." ie Farmers Loan & Trust Co. vs. Kansas City W. & N. W. R e R. Co. 53 Fed. Rep. 189. ;o 44 After stating the rule as declared in Fosdick vs. Schall -d 44 Chief Justice Waite in Union Trust Co. vs. Souther, 107 U. 8 re 44 R. 504 says: 44 To this we adhere, and. in our opinion 'th< 1 " * * ' 1 * A -1 ^ /\n urhafh^l* PUT 1(1 ' rigm TO impose U?rms UUtS nut ac^euu uivuc uii n Itvvi.v. le " rent earnings have been used to pay the mortgage debt, princi Is " pnl or interest, instead of current expenses." t- In Union Trust Co. vs. Souther 107 IT. S. R. 594 the gros Id earnings were not enough to pay the current expenses prior t< :h the appointment of receivers yet the priority was allowed. u The right to impose terms does not depend alone on wheth er current earnings have lieen used to pay the mortgage debt ie w principal or interest, instead of current expenses." * Is Union Trust Co. vs. Souther 107 U. S. 11. 594. e- " In the order appointing a receiver* no provision for thi " payment of claims was made, and it is conceded that there i " nothing to show that since the default in the payment of inter " est there has been any diversion of income to permanent im i- " provements. Now the broad proposition is laid down to coun " sel, that unless a diversion is shown, or unless the court as i " condition of appointing a receiver, requires the payment of cer ie " tain claims, none can be preferred to the mortgage debt; . . li- " I think the Supreme Court; has decided against this claim." Blair vs. St. Louis, <fcc. (Brewer J.) 22 Fed. 472. rd " The right to require the payment of such debts does not de of " pend on wnether current earnings have been used to pay th is- " the mortgage debt." us Dow vs. Memphis, 20 Fed. Rep. 267. y Appellant contends further that taking the note of the C. C <fc C. R. R. for $10,000 secured by deposit of bonds as collatera li- has deprived the R. & D. R. R. of the equity they now seek t< cl, enforce. The note was taken as collateral to the original obli ly gation and by express" agreement was to be considered as pay l- ment of the account only when paid. See record folio 34 2r Under the admission of counsel, " This note was given to b n payment when paid, on the three-several item9 above stated." ie In the case of Hale vs. Frost 99 U. S. 389 the Supreme Cour p- gave priority to a claim for materials furnished three years b [>f fore the appointment of a receiver and for which a note had beei ot given 16 months before the receiver was appointed, r- " When the receiver was appointd the debt was evidenced b; li- " business paper maturing at a future date. It was no waive ih " of any claim on the fund which might come into the hands c lit " the receiver to renew the paper at maturity for the convenienc u- " of the holder." s. Burnham vs. Bowen, 111 U. S. It. 783. js " In Miltenberger vs. Logansport, &c., 106 U. S- 286 it wa s- " held that a court has the power to create ciaims wruugii ? .c at " ceiver, in a suit for foreclosure of a railroad mortgage, whicl 'y 44 shall take precedence 6f the lien of the mortgage; and that i ty 44 may provide for the payment of arrears due for operating ex 4< penses incurred before the receiver was appointed, and inak ig 44 such expenditures a lien prior to the lien of the mort n. 44 gage." es ' Kneeland vs. Foundry, Ac., 110 U. S. R. 597. ir In Kneeland vs. American, Ac., 13G U. S. R. 98 the court pre le scribed the character of such claims as the court can clothe witl this priority. 44 Those few unsecured claims which by the rul ings of this court have been declared to have an equitable prioi e ity." le This 44 equitable priority " does not depend as we have seen, up ly on a diversion of the current earnings, nor alone upon the pre ii- visions of the order appointing a receiver. It depends upon th jo character of the claim. If they are the 44 outcome of indispens )r able business relations," such as the 44 payment of limite ir amounts due to other and connecting lines of road for materif rt- and repairs and for unpaid ticket and freight balances," 4< wher er a stoppage of the continuance of ,'such business relations would b >n a probable result in case of non-payment" they may well b n- placed in the category of payments to preserve the mortgage d property. r- Miltenberger vs. Logansport, <fcc\, (Supra), le Not depending upon the order of the court appointing a re at ceiver, nor upon the diversion of earnings, but upon the charac ter of the claim, this priority may be awarded whenever the fact le establishing the equitable character of the claim appear to th court. And even if it should be held that the order appointinj y Chamberlain receiver does not authorize the payment of thi p- claim out of the corpus, the order of Judge Simonton of July 14 le 1893, certainly does. This order he had authority to mak ^ n-Konovop Hip i-hflrnoter of the claim was established befor him. 44 In Miltenberger vs. Logansport. it appears that the Receive it wa< appointed August 2d, 1874. On October 3, 1874, an orde a 44 was made directing the payment of traffic balances accruing b 4 fore the Receiver was appointed, and the order was sustained, t- Brewer J., in Blair vs. St. Louis, &c., 22d Fed. 473. d The appellant's counsel says at page 6 of his brief: 44 Thes 44 principles were recognized and applied in other intervention :h 44 tiled in this very case, and priority was denied by the Court t y 44 creditors who had furnished supplies and materials necessary fo ie 44 the maintenance of the Railroad (Finance Co. vs. C. C. & C. R 14 R., 48 Fed. Rep. 524) upon the ground that they had failed t 44 prove any diversion of the income by the bond-holders or an; s- 44 other equity which could displace the vested liens of the bond b- 44 holders/' g Finance Co. vs. C., C. & C. R. R., 52 Fed. Rep. 524. !>. |0 jq None of these claims which-were denied priority were include within the terms of the order appointing .Chamberlain Receivei , None of them answered the description of such as were entitle )e to priority under Miltenberger vs. Logansport, &c., and Kneelam vs. American, ?&c., Co. They were not the "outcome of indispen k sable business relations," where a non-payment would have rc a suited in the discontinuance of that business relation so essential t " the life of the Company. The debts had been contracted an< j. there appeared no necessity for a continuance of the intimat l8 44 business relations " necessary to secure priority. They wer held to be ordinary unsecured creditors with no special equities a. - To sustain their contention for 44 equitable priority " they sough ."p to show a diversion of the earnings. This was their only clain lG to priority, and the Court found that it did not exist. g_ Jn the case at bar our case does not rest upon a diversion o ? the earnings. The 44special circumstances" entitling us to pri ^ ority are that we are preferred by the order, and ihat from th< character of our claim the Judge had the power to prefer us eithe v in the original order or in the subsequent one of July 14, 1893. $ In Union Trust Co. vs. Illinois Co. &c., 117 U. S. 444, the orde: appointing the Receiver provided that he should pay 44 out of th< moneys that shall come into the hands of said Receiver from th< operation ui sinu Km <t ikj . d j. First, All current expenses, Ac. y Second. All sums due or to become due connecting or inter secting lines of railroads arising from the interchange of business do. ie In the final decree the Court ordered certain claims belonging rt I to the second class to be paid out of the corpus. j- The opinion at page 4(5.) states and disposes of the objection t< >- to this order in the following words: 44 It is contended however y 44 that, in the order of September 11, 1875, appointing Dole receiv it 44 er, while authority was given him to carry on the business o ie 41 the road, and to make repairs and additions, essentials to its in y 44 terests and safety, it was provided that out of the moneys lu 44 should receive from its operation, he should pay for the expense; 44 of operation; that he was not authorized by that order to con p 44 tract any debt which the receipts of the road would not pay y 44 that the terms of the order were such as to exclude the payment i- 44 of any of the expenses embraced in the six items above-named g 44 out of any fund other than the receipts from the operation oi t-' 44 the road ; and that the orders appointing Ilees and Genis were e' 44 equally limited. But we think this view is not correct. The it! 44 terms of these orders do not impair or exclude the ample authoro '' ity which the Court would otherwise have, and otherwise has, n 441:> order the claims in question to be paid out of the property it g " s:?lf, with priority." rj, p COTHllAN, ? Attorney for R. Jk D. R. R. Co., Appellee*. I \ . ' ' " ' V,.'. I 'J ? I ORIGIN OF PEACE SOCIETIES Principle* nu<l Purpose* of Tbefr Fornittf ion. BY Hit \V. E. DARBY. A Paper read at the Chicago Peuce Congress, 1393.) i Part Fourth. 1 I have now given you, as briefly and clearly as I am able, using rather their ! own words than my own, that I may J not misrepresent them, some account f of tlie origin, principle*, and puqxx-.es i of the Peace Societies which aie re presented In tills CougreMn. ; They all work together, each in his - own order, banded in a real brotherj linod and moved by a common spirit, . j each doing the task for which it i* ! j specially adapted, each witnesdng f.?r i ' (lie (rutI) it specialty emuuuies. i; uiuii . | of this kind is not only practicable, but us you see in this Congress, actual. l Organic federation between elements so divers? in their fuudameuiui priu-. ci|>lea, appears to me, in the naiure of 4 things, impossible. 1 Naturally, I incline to the oldest " type. Convinced asl am to the In* most core of my nature, that the one ? hope of the world is Jesus Cbrist, ami 1 that only in His laws and pieeepts and spirit are to be fouml the most prac* . ticable policy and the truest expediency, and, behind both policy and , theory, the great force by which the i. reform and regeneration of Society e? are to be accomplished ; con v.need an - I am that all progress is illusion?a , . mirage, a shimmer of glittering *and ?which does not enshrine the miud 8 of Christ, righteousness, brotherhood, 3 union, and divine self-sacrifice in the heart of the world, aDd that His spirit and laws are sufficient for all purposes; convinced as I am of ' these, 1 am bound in sober earnest to look upon auy attempt to accomplish great reforms without Him, as the 3 adoption of means which have their 3 necessary and effective force left out. - Still that does not prevent my giving * both heart and band to any one who - will accept them in the world's work, & and particularly in this work for - Peace. I will not not offend his prejudices, if I can possibly avoid it. 1 will not intrude my religious faith and my >. loyalty to Jesus Christ upon ijim. I e will keep these araoug the, hidden sanctities and springs of life and action in me. But in return, I will expect I from him, us the nrat principle ?i nee i and equal cooperation, that he will not . ask me to surrender them, or eveu hint my disloyalty to my Divine Mas" (erandto my honest convictions. a* the condition of our working together. Then, as to the methods of our proe pagonda, I will remind you that Arbitration is not some self-acting system t of political mechanics, neediug only > suitable and perfected and permanent n machinery, it has to be adopted, it has to be applied, and for this is nee* ? y essary a favourable disposition. Arr bitration is, after all, a mere method, ?f a mere instrument, a mere means to e an end : that end being?such an adjustment of international differences as will secure international Peace. It s Is a mere instrument, I say, and be* 1 hind the Instrument there must be the ^ hand to use it, and behind the hand x the intelligent will, and, for moral purposes, behiud the will the favour' ing disposition. Our work, therefore, is to provide principle*, uot policies, for Governments, taking care, of course, to show the bearing of principles upon |?olicies. y The presentation of li^ht principles, 1 will, if it be judicious, appeal to the reason and conscience of ruleiv, and > will be reallv effective even where it may seem to be uuheeded. Tne at k tempt to furnish policies will su:ely be )- resented a* an iuterfe.ence with the e prerogative of government, au<J ex? j- pusw U8 to the charge of arrogant raedj dlesomeness. L| Kings must be taught as though you e taught them not; and ministers and people too. e Moreover, to be statesmanlike, we ^ must be both logical and thorough. All statecraft is defective which leave* out of account the spiritual forces which are active iu the community, " and the deepest instincts and sentiments of the people. 5 I hold with Whittier that the main e thing, aye, the necessary thing, if, to o give truth a voice. We"nitty trust her s to do the rest when she has gained a , hearing, Magna e-t Veritas et prtevahe bit; and if Truth cauuot accomplish e what is necessary, there in no other effective way. If the judgment be not r satisfied, any attempt to carry our r poiut, and to compel obedh-nce to our u personal will, is a return to the old rouimont' mention and tvrannv. and is. likely to lend to the old brute methods" e of war. g Government is power, we were leruinded by Judge Bonney lust evening In introducing the President of the Congre.-p, but, he, added, thj power or' " government is moral force. The law 0 of executive government is just ami y right and impartial administration. " The power of government is moral. It is righteousness which exalteth a nafion. It is righteousness which e?tablishes the throne. The work. < f j righteousuess shall l>e Peac>?, and the . effect of lighteousuess, quietness and j assurance, T. < ., mutual confidence, for ^ ever. The kiugdou of God, i. e. the a typical kingdom, the ideal governmeut, is "righteousness anii peace," and (their result) "joy"?"joy in the ? Holy Ghost." that is in the highest 3 faculties of (lie people; ana joy, mat e is, prosperity, iu tbe material cireuiue stances of the uaiiou ; imperfectly, I. very imperfectly exprissed in the t old political maxim ' the greatest hap1 piness of the greatest number." So that in a deeper sense than was ever f intended by the memorable utterance . of Napoleon III.?a sense which a makes it applicable to all times and r lauds.?L/empirec'est la patx.?Concluded. a % ~ Lady Henry Somerset has told how " she was first drawn into temperance work. She had seen two children, a boy and girl, sip wine at their father's table, and heard the guests laugh at - the precocious little ones. She had , seen the boy go to a drunkard's grave when tweuty-four years old. t "But what of the girl?" she went on. ) "The girl was happily married, and } became the mother of lovely children. . The fatal seed had been sowu, howev f er. I'lie young ui'iiuei ueuaun; uoiuvc to strong drink. 1 prayed with lier j and *ept with her. She asked me one ' day if 1 would be a total abstainer if she renounced strong drink forever. " The proposition wan a btrunge one, [audi i'oked twcutyfour hours for con j sidciation. When I saw her again > she said it was too late. I felt that if ' I had given her promptly the answer Mshe would have received, she migbt \ have been saved. To-day her home is jshattered, but 1 resolved to do in fu, i ture all I could for Ciod and humanity. ? California Prohibitionist. j In the eyes of Ciod one good deed is [worth tea tho H:in 1 well m niiidi^s ! words. . I