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Opinion of the Court.

by him, after he contracted to sell to the United States, enured to the benefit of his grantee. He is estopped to dispute his grantee's right of possession, or to dispute, as between him and his grantee, the title he assumed to convey with general warranty. In Van Rensselaer v. Kearney, 11 How. 297, 325, it was said that the principle deducible from the authorities was “that whatever may be the form or nature of the conveyance used to pass real property, if the grantor sets forth on the face of the instrument, by way of recital or averment, that he is seized or possessed of a particular estate in the premises, and which estate the deed purports to convey; or, what is the same thing, if the seizin or possession of a particular estate is affirmed in the deed, either in express terms or by necessary implication, the grantor and all persons in privity with him shall be estopped from ever afterwards denying that he was so seized and possessed at the time he made the conveyance. The estoppel works upon the estate, and binds an after-acquired title as between parties and privies.” See, also, Bush v. Cooper, 18 How. 82, 85; Crews v. Burcham, 1 Black, 352, 357; Moore v. Crawford, 130 U. S. 122, 130; Jackson ex dem. Danforth v. Murray, 12 Johns. 201. And such is the established doctrine of the Supreme Court of Michigan, which said, in Smith v. Williams, 44 Michigan, 240, 242 - an action of ejectment “that when one assumes by his deed to convey a title, and by any form of assurance obligates himself to protect the grantee in the enjoyment of that which the deed purports to give him, he will not be suffered afterwards to acquire or assert a title, and turn his grantee over to a suit upon bis covenant for redress.” See also Case v. Green, 53 Michigan, 615, 620.

The United States has established a good title and right as against the defendant, and that is sufficient to entitle it to judgment in this action of ejectment. These considerations require an affirmance of the judgment

below and it is so ordered.

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A party bidding at a foreclosure sale of a railroad makes himself thereby a

party to the proceedings, and subject to the jurisdiction of the court for all orders necessary to compel the perfecting of his purchase; and with a right to be heard on all questions thereafter arising, affecting his bid, which are not foreclosed by the terms of the decree of sale, or are ex

pressly reserved to him by such decree. Where not concluded by the terms of a decree of foreclosure of a railroad,

any subsequent rulings which determine in what securities, of diverse value, the purchaser's bid shall be made good, are matters.affecting his interests, and in which he has a right to be heard in the trial court, and

by appeal in the appellate court. The appointment of a receiver of a railroad vests in the court no absolute

control of the property, and no general authority to displace vested contract liens, and when a court makes such an appointment it has no right to make the receivership conditional on the payment of any unsecured claims except the few which by the rulings of this court have been declared to have an equitable priority; it being the exception and not the

rule that the contract priority of liens can be displaced. A court which appoints a receiver acquires, by virtue of that appointment,

certain rights and assumes certain obligations, and the expenses which the court creates in discharge of those obligations are necessarily burdens on the property taken possession of, and this, irrespective of the question who may be the ultimate owner, or who may have the preferred

lien, or who may invoke the receivership. When a court appoints a receiver of railroad property it may, in the ad

ministration, contract debts necessary for operating the road, or for

labor, supplies or rentals, and make them a prior lien on the property. When, at the instance of a general creditor, a receiver of a railroad and its

rolling stock is appointed, and among the latter there is rolling stock leased to the company with a right of purchase, and, there being a deficit in the running of the road by the receiver, the rental is not paid, and the lessor takes possession of his rolling stock, his claim for rent is not entitled to priority over mortgage creditors on the foreclosure and sale

of the road under the mortgage. When the holder of a first lien upon the realty alone of a railroad company Opinion of the Court.

asks a court of chancery to take possession not only of the realty but also of personal property used for the benefit of the realty, that personalty thus taken possession of and operated for the benefit of the realty

should be first paid in preference to the claim secured by the realty. Where, on the application of the trustee of a railroad mortgage, a receiver

is appointed and takes possession of the road and of its rolling stock, and among the latter is rolling stock which the company was operating under lease, and the receiver continues to operate it, its rental at the contract price, (and not according to its actual use,) if not paid from earnings will be a charge upon the proceeds of the sale under the foreclosure of the mortgage prior to the mortgage debt.

IN EQUITY. The case is stated in the opinion.
Mr. John M. Butler for appellant.

Mr. James L. High, for Paul, trustee, and the United States Rolling Stock Company, appellees.

Mr. Bluford Wilson for R. S. Grant, The American Loan and Trust Company, and the Grant Locomotive Works, appellees.

Mr. Henry D. Hyde (with whom was Mr. Samuel Williston on the brief) for the American Loan and Trust Company and E. B. Phillips, trustee, appellees.

Mr. Robert G. Ingersoll (with whom was Mr. Clarence Brown on the brief) for appellant.

MR. JUSTICE Brewer delivered the opinion of the court.

These cases were argued and are considered together, the questions involved being similar, and growing out of the same foreclosure suits. In a general way it may be stated that they arise between a purchaser at foreclosure sales of certain railroad property and intervening creditors. The initial question is as to the right of appellant, the purchaser, to his appeal. It is urged that a purchaser at a sale under a decree has no right to appeal from its terms. He takes under it. chase is a voluntary act, and, coming in voluntarily to take under a decree, he may not challenge that under which he takes. The contention of appellant is that his attitude is not thus limited ; that his appeal is not from the decree of sale

His purOpinion of the Court.


under which he purchased, but from orders made thereafter respecting his bid, the modes of payment thereof, and the debts to which it should be applied, matters in which he was interested, and in respect to which, by the terms of the decree of sale, he was given a right of appeal; and that such right springs not alone from the grant of the right of appeal, but also from his relations to the matters determined and adjudged in these subsequent proceedings, and by the final decree. For a correct solution of this question a statement more in detail of the facts is essential.

Decrees of foreclosure, for there were separate divisions, the Toledo and the Saint Louis divisions, separate suits and several mortgages, were entered on the 12th day of November, 1885. It is sufficient, however, to notice the proceedings in one, for there was no substantial difference between the

It contained these provisions: “ The complainants herein and the purchaser or purchasers at the foreclosure sale under this decree reserve the right to appeal from any orders and final decrees made by the court, directing and decreeing the payment of claims and debts found and determined and adjudged and decreed to be due and payable as court and receiver's indebtedness, and to be prior and superior in equity to the lien of said first deed of trust and mortgage herein and hereby foreclosed, if they shall be so advised.” “In making payment of any surplus of said purchase-money left, after full payment of the court and receiver's indebtedness, the purchaser or purchasers shall be allowed to pay said surplus in the bonds and coupons to which the same may be applicable, as hereinabove provided, each such coupon and bond being received by the master for such sum as the holder thereof is entitled to receive under the distribution herein provided and according to the priorities herein adjudged.” So that by the decree the bidders at the sale were notified in advance of their right to be heard, both in the trial and appellate courts, upon the question of what amounts should be paid to intervening creditors and what in the bonds secured by the mortgages. Common experience is that intervening claims have to be paid in cash, while the mortgage bonds of a defaulting and insolvent

Opinion of the Court.

corporation are generally purchasable much below par. In this case the enormous disproportion between the amount of outstanding bonds and the value of the property suggests that those bonds must have been purchasable at a very low price; and, therefore, that the question of the amount of intervening claims finally to be charged upon the property was a matter affecting materially the interests of the purchaser, and the right to be heard upon it, one which would largely determine the amount of his bid.

Further, on February 23, 1886, when the master had reported upon the intervening claims, the appellant, among others, filed exceptions to that report, in the following words: “Come now James M. Quigley, Charles T. Harbeck, John McNab, Halsey J. Boardman and Warren D. Hobb, complainants in said causes, and committees representing bondholders holding bonds secured by mortgages on said railroad and property in said causes involved, and the Central Trust Company, trustee in the mortgages in said causes foreclosed, and Sylvester H. Kneeland, purchaser of said railroad and property sold at foreclosure sale under decrees rendered and entered in said above-entitled causes, and owner of and trustee for a vast majority of said mortgage bonds, and now except to each and every of the master's findings and report herein; and said complainants, and said purchaser, for their exceptions, assign the following causes." And in the final decree thereon the exception and allowance of appeal are stated as follows: "To this decree the said Sylvester H. Kneeland, as purchaser and trustee representing the first mortgage bondholders on said entire line of railroad, concerning both divisions from Toledo, Ohio, to East Saint Louis, Illinois, now excepts and prays an appeal to the Supreme Court of the United States, which is granted to operate as a supersedeas, on giving bond in the sum of two hundred thousand dollars, which is now filed with the American Surety Company of New York as surety, and the same is approved by the court, the court, however, reserving the right to resume possession of the property on the terms mentioned in the order confirming the sale and approving the deed.”

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