Equitable Trust Co. v. Western Pac. Ry. Co.

The Equitable Trust Company of New York, as trustee, instituted foreclosure proceedings in the District Court in the Northern District of California to foreclose the first mortgage of the Western Pacific Railway Company, bearing date September 1, 1903, but acknowledged and delivered June 23, 1905. Tlie trust company, as trustee, plaintiff in the court below, and appellant here, also asked that a receiver be appointed pendente lite. Jurisdiction was based upon diversity of citizenship.

The complaint sets forth that the entire amount of bonds secured by the mortgage sought to be foreclosed, $50,000,000, had been duly issued and were then outstanding, and the only default alleged was in the payment of one semiannual installment of interest which matured March 1, 1915, amounting to $1,250,000. The prayer, so far as it related to the appointment of a receiver, was substantially that a receiver be appointed to take possession of and to operate the properties of the Western Pacific Railway Company which are subject to the lien of the first mortgage, and to collect and receive the earnings, revenues, rents, issues, profits, and other income thereof, and to apply the net income thereof to…