OPERATING EXPENSES; RECEIVERS.
Taxes are prior in lien to all other liens except judicial costs ; Georgia v. R. Co., 3 Woods 434, Fed. Cas. No. 5,351; Central Trust Co. v. R. Co., 110 N. Y. 250, 18 N. E. 92, 1 L. R. A. 260 ; New Jersey Southern R. Co. v. Board of Railroad Com'rs, 41 N. J. L. 235.
In many states liens are given by statutes to certain favored creditors, who thus ac quire priority over mortgage bonds prior to the inception of their claims. The ordinary mechanic's lien statute does not apply to railroads unless expressly declared to do so. The contractor who constructs a railroad has no lien thereon as a matter of right. The fact that he has possession does not give him a lien ; Dunham v. Ry. Co., 1 Wall. (U. S.) 254, 17 L. Ed. 5841 Galveston, H. & H. R. v. Cowdrey, 11 Wall. (U. S.) 459, 20 L. Ed. 199. The courts construe such statutes strictly. Thus, a statute giving a lien for materials, supplies, and labor does not give a lien for money loaned to pay for them ; Seventh Nat. Bank of Philadelphia v. Iron Co., 35 Fed. 436. And a lien for materials will be allowed only for such materials as pass into the permanent structure, and not for trucks, scales, etc.; Central Trust Co. v. Ry. Co., 27 Fed. 178. A contractor's lien for work done will be limited to the embank ments and structures actually made by him, as distinguished from the land and right, of way ; Central Trust Co. v. Ry. Co., 83 Fed. 386. It has been held that a statute giving a lien to persons furnishing supplies neces sary to the operation of a manufacturing company prior to the lien of an earlier mort gage is not' unconstitutional as special or class legislation ; Virginia Development Ca. v. Iron Co., 90 Va. 126, 17 S. E. 806, 44 Am. St. Rep. 893. Such "supplies" are only such things as contribute directly to carrying on the work in which the company is engaged and not, e. g., goods supplied to a "company store" maintained by a furnace company ; Fidelity Ins., Trust & Safe-DepoSit Co. v. Iron Co., 81-Fed. 451. But, while the courts construe such statutes strictly iu determin ing the kind of claims to be admitted under their provisions, they construe them liberally as remedial statutes in determining the for ' malities to be observed under. their provi
sions ; Seventh Nat. Bank of Philadelphia v. Iron Co., 35 Fed. 442.
A very common statutory lien of this class Is the lien for labor, usually limited as to the duration of the labor for which a lien can be filed, and also as to the class of em ploy6s entitled to take advantage of the provisions of such a statute; Seventh Nat. Bank of Philadelphia v. Iron Co., 35 Fed. 436; Fidelity Insurance, Trust & Safe-De posit Co. v. Iron Co., 81 Fed. 453.
The "six months' rule," or as it is usually called, from the case in which is was adopt ed by the supreme court of the United States (99 U. S. 235, 25 L. Ed. 339) the rule in Fos dick v. Schell, allows parties who have fur nished labor or supplies within six months antecedent to the receivership priority, at least so far as income received during the receivership is concerned, over mortgage bondholders. It has been held that the rule applies only to railroads; Wood v. Trust & Safe Deposit Co., 128 U. S. 416, 9 Sup. Ct. 131, o2 L. Ed. 472; not to manufacturing corporations; Seventh Nat. Bank of Phila phia v. Iron Co., 35 Fed. 436; Fidelity In surance & Safe-Deposit Co. v. Iron Co., 42 Fed. 372; nor to steamship lines; Bound v. R. Co., 50 Fed. 312 ; nor to a hotel company ; Raht v. Attrill, 106 N. Y. 423, 13 N. E. 282, 60 Am. Rep. 456. But see, 'contra, an Ala bama case discussing the authorities and extending the rule to private corporations generally ; 39 L. R. A. 623, n. See RECEIVERS.
As to the right of a mortgagee to posses sion, see 5 Harv. L. Rev. 245. As to the early history of mortgage, see Hazeltine, Gage of Land in Medimval England, 17 Harv. L. Rev. 549; 18 id. See ROLLING STOCK ; RECITALS ; TRUSTEE ; TRUST DEED ; MERGER ; LEASE ; MAJORITY ; AFTER-ACQUIRED PROPERTY ; WELSH MORT OAGE ; ANTICHRESIS ; COVERING DEED.