880 FEDERAL REFOIiTER. �the discretion of the chancellor as to what time, if any, should lie named. in the present case, however, the absence of such provision is unimpor- tant, as all the materials and supplies in question were f urnislied af ter the firat of January, 1880, and the order appointing the receivers was made upon the twenty-fourth of May of the same year, ao that the period dur- ing which the materials and supplies were furnished doea not extend beyond flve months prior to the decree, and if the ordev had been limited to that period it would have been supported by the precedents. �" The doctrine of which lye have been speaking is not in conflict with the priority secured by the mortgage' to the bondholders, nor does it defeat their lien. When foreclosure takes place no one can compete with the mortgage creditors in the distribution of the proceeds of the mortgaged property ; but the fund which is now the subject of administration is that merely which arises from carrying on the business of the corporations defendant, under the orders and direction of the court, and it therefore may justly be applied as the chancellor shall flnd to be equitable. �" Thia fund being producod by the administration of the court itself, is, it should also be stated, to be distribnted according to the weil-regulated discretion of the court, and it follows that material men, as well as others who participate in that distribution, must submit to such terms as the court may impose ; and no order will be made requiring payment at such times or in such manner as will embarrass the receivers in the con- duct of the business. In the present case we fully concur with the coun- sel for the receivers that it will not be possible to fix a definite time for payment of the claims now under consideration. The receivers are virtually in the position of trustees charged with the uuty of pro- 'ecting the properties in their hands for the beneflt of all parlies in interest so far as it may be possible for them to do so. Many of the proper- ties are subject to liens or rentals, but are of much greater value than the amount of the encumbrances or charges upon them. When the income from a particular property will more than pay the charges upon it, it is plain that the revenue should be flrst applied to such payments ; and, even in cases where no income is received, it is still the obvioug duty of JJhie receivers to preserve those asaets which have an undoubted margiu of value. It may be netessary, therefore, for the beiiefit of the estate as a whole, to apply earnings of either company to protect valuable invest- ments, and for this reason to postpone somewhat the creditors holding these claims for materials and supplies. We are, however, satisfied that a certificate of indebtedness would be of much importance to t" ose who otherwise might be greatly inconvenienced by failing to receive pay- ment as they had expected, and we see no objection to giving to this class of creditors certiflcates in the form embodied in the decree which we recommend at the end of this report. �" In addition to.the facts which we have already stated, we report, from the evidence adduced before us, that the amount due and maturing for materials and supplies by the Philadelphia & Reading Railroad Com- pany is about $1,265,000 to the twenty-fourth day of May, 1880, and that the amount due for materials and supplies by the Philadelphia & Reading Coal & Iron Company to the same date is about $550,500." ��� �
