Page:Federal Reporter, 1st Series, Volume 9.djvu/17

3 FBDEBAIi BEPOKTBB. �tives, and had given orders for the construction of an additional number, and that they would probably flnd it neeessary to order the construction of a still further number ; that, in their judgment, it was not fair or advantageous to the creditors of the company to pay so large an amount as would be required for this increased equipaient from the current earnings, thereby depriving bondholders and other creditors " of that income which is the natural source for the payment of interest on their debt;" that petitioners believed it to be for the best interests of the trusts <^mi;nitted to them that funds to pay for said equipment already constructeAand Ordered should be provided by a car trust of at least $1,000,000, according to the plan set forth in a certain agree- ment and lease annexed to the petition. Petitioners prayed for leave to exe- cute said agreemenfand lease, and carry into effect said plan. The agreement annexed to the petition provided for a conveyance to a trustee of the rolling stock constructed or ordered, in trust, to issue 1,000 car-trust certifleates, secured thereon, and redeemable at periods of from one to ten years, and to apply the money received therefrom to the payment of the cost of said equip- ment. By the lease annexed tq. the petition the trustee was to lease this roll- ing stock to the receivers at a renj;al therein provided for. The petition was referred to one of the special masters in the cause, (George M. Dallas, Esq.,) who, af ter hearing evidence, reported that he believed the agreement and lease to be a proper and wise means for procuring the needed rolling stoclc, and recommended that the prayerof the petition be granted. �Samuel Dickson and Richard L. Ashhurst, for petitioners. �John G. Bullitt appeared for the railroad company and for certain stock and bondholders, but did not oppose the petition. �Butler, D. J., (orally.) This is in eflfect an application on the part of the receivers to borrow money upon rolling stock (cars and engines) manufactured at the company's shops and elsewhere, and in process of manufacture, for the receivers. In terms, it is for the creation of a car trust, but in eiiect, it is for authority to make a loan, as stated. �Two questions arise in considering the application : First, is the matter contemplated within the scope of the court' s duty and authority, as custodian of the road and other property of the company? Second, if it is, would it be wise to grant the application ? As respects the first question, it must be borne in mind that the custody of the court is temporary, to preserve the property so long only as may afford rea- sonable time to the plaintiffs to prosecute their proceeding to a close, in case the company shall fail to make satisfactory arrangements to relieve itself. Whether the order asked for by the receivers or the allowance of it, falls within the proper scope of the court's author- ity, under the circumstance, is certainly open to doubt. I will not, however, enlarge upon this subject, for if it was not so open to doubt,. I am satisfied it would not be wise to make the order. �The petitioners admit, and the testimony proves, that the net earn- ��� �