Page:Federal Reporter, 1st Series, Volume 4.djvu/888

874 FEDERAL REPOniEIi, �Dybb, D. J. The petitioners above named have presentee! ■petitions foi- the allowance of claims to a large amount against the receiver of the Green Bay & Minnesota Eailroad, who is operating the road under the direction of this court, pending the foreclosure of certain mortgages upon the property, which demanda are for loss and damages claimed to have been sus- tained by the petitioners in the destruction of timber and cranberry marsh along the line of the road by fire, alleged to ha-ve been set by sparks escaping from defective locomotives. By suitable and separate allegations it is charged that the fires which caused the damage occurred on different days in different years, and it is thus made to appear in each of the petitions that one of these fires occurred on the seventh day of September, 1877, which was more than four months before a foreclosure of the mortgages in suit was commenced, and before a receiver was appointed. To such parts of the peti- tions as thus allege, as causes of action against the receiver, loss and damage by fire while the road was yet being operated by the railroad company, and before it passed into his hands, the receiver has demurred, and the demurrer taises the question whether such claims can be allowed or entertained against him or the property which he has in charge for the bondholders, or against any party other than the railroad company by whose negligence it is alleged the loss and damage were occasioned. �In Haie \. Frost, 99 U. S. 389, it was held that the net earn- iugs of a railroad while it is in possession of a receiver, appointed by the court, may be applied to the payment of claims having superior equities to that of the bondholders. To sustain the claims in question, it is therefore necessary that some equity be found in favor of the petitioners and superior to that of the bondholders, upon which to base their allowance. And the supposed equity urged is that the fire in question occurred after default on the part of the railroad company in payment of the mortgage debt or interest ; that thereafter the company operated the road as the agent or irustee in equity of the bondholders, and that the alleged lia- ����