ager and appointee of the directors of the company, against whom the petitioner in its bill has made charges of gross fraud, mismanagement, and diversion of the funds of the company; that the directors are the owners of the floating debt mentioned in the petitioner's bill, and are the very persons, if any one, who have applied to the complainant to bring the suit wherein Cable has been appointed receiver; that it fully appears by the pleadings and proceedings that the railway company and its directors represent and control both the defendant and the complainant in the bondholders' suit; wherefore, and for divers other good causes appearing of record in the pleadings and the exhibits and affidavits, to which reference is prayed, the petitioner prays leave to file its petition for intervention, and prays that the order appointing a receiver be set aside and vacated, and that all proceedings in the bondholders' suit be stayed until the further order of the court, and for such other different and further relief as to the court may seem just and equitable.

The subject-matter of both bills, the exhibits supporting each, and the previous orders made thereon, respectively, being thus brought on for hearing at the same time before the court in which each bill was filed, was contradictorily argued by counsel, and was held under argument and consideration by the court until August 4, 1892, when, on consideration of the intervening petition and the two several bills, and the exhibits and affidavits in support of each, it was decreed that the order appointing Robert B. Cable receiver be set aside and vacated, and that all further proceedings in the bondholders' suit be stayed until the further order of the court. And in the stockholders' suit the motion of the complainant for the appointment of a receiver was granted, and Mason Young was appointed, and invested with the powers and charged with the duties customary in such receiverships. From these orders appeals were taken to this court. We held that the trustee in the second mortgage was entitled to have the property therein mortgaged taken possession of by the court through the appointment of a receiver at its suit; that the order granting the stay of proceedings in its suit should be reversed, and the stay dissolved; that the receivership granted on July 23, 1892, should be restored; and that the orders in reference to the receivership should be had in the bondholders' suit, and the reports of the operations, earnings, and expenses of the property covered by the consolidated mortgage, should be made to the court in that case. It was left to the circuit court to determine what person was the proper one to execute the office of receiver.—to continue the receiver, Cable, or to appoint a more suitable person in his place, as the relations of the parties, and the character and condition of the property, might, in the judgment of that court, require. 2 U. S. App. 606, 5 C. C. A. 53, and 55 Fed. 131. The decree appealed from in the stockholders' suit was reversed, except as to so much thereof as granted the injunction, which was modified, and as modified was affirmed. In each of these cases an application was duly made for a certiorari to the supreme court, which, applications were finally disposed of by that court March 27 and April 3, 1893. 148 U. S. 372388, 13 Sup. Ct. 758. Pending proceedings on the appeals to this

93 F.-5

court and on the applications for certiorari to the supreme court, all the properties of the defendant railway company, as specified and indicated in the decree appointing Young receiver, were held and operated by him as such, under the authority, direction, and orders of the circuit court.

On April 7 and 8, 1893, the circuit judge and the district judge, sitting together, in open court, and concurring, passed the decrees in the two suits, putting into effect in each the mandate of this court. By these decrees the circuit court ordered that the decree appointing Young receiver be vacated, the property which he held as receiver be forthwith restored to the officers of the railway company, and his accounts filed with the clerk, within 20 days, and all persons having claims or demands due, arising out of the operation of the property by Receiver Young, were required to file the same with the clerk, which accounts and claims, on being filed, should be referred to a special master, to be thereafter designated, for investigation and report; that the American Construction Company pay the costs of the appealed causes; that the order of August 4, 1892, staying proceedings in the bondholders' suit, and vacating the order of July 23, 1892, be set aside, and the stay of proceedings dissolved; that the receivership granted and created by the order dated July 23, 1892, be restored; and that the property described in the order be restored to Cable, as receiver. After passing the decrees on April 7, 1893, putting into effect the mandates of this court, the circuit court on the next day, for reasons assigned, not derogatory to Receiver Cable, or to his capacity to manage the railroad, considered that it was best for another receiver to be appointed, and passed a decree in the bondholders' suit appointing Joseph H. Durkee, the present receiver. On the same day (April 8, 1893) an order was passed in the stockholders' suit appointing Charles S. Adams, Esq., special master, to whom, as such master, the accounts of Receiver Young, and the claims of all other persons arising out of his operation of the property, were to be referred. This last order bears only the signature of the district judge. On November 10, 1892, the complainant in the stockholders' suit amended its bill so as to make the trustee in each of the mortgages defendants therein, and prayed for process of subpoena against each of them, and on the 22d day of November obtained an order for making substituted service on each of them. This order was served on the Mercantile Trust Company on December 10, 1892. On December 16, 1892, each of these trustees, specially limiting its appearance to the purposes of the motion, and of objecting to the jurisdiction of the court, appeared by its solicitor, R. H. Liggitt (the names of associated solicitors being joined), and moved the court to vacate and set aside the orders for substituted service on each of them, on the ground that they were not residents of the district, and because the suit is not such a one as substituted service can be made therein. These motions were not acted on. The complainant in the bondholders' suit, by its solicitors, Cooper & Cooper, on June 28, 1893, asked and obtained leave to amend its bill by making the Mercantile Trust Company a party defendant.

In June, 1893, Special Master Adams proceeded to take testimony touching the matters that had been referred to him, the solicitors for

In

the respective parties interested in the litigation being present. August he made a partial report, showing what had been done up to that time, and much that remained to be done. He continued the taking of testimony from day to day as rapidly as the convenience of counsel permitted, until April 30, 1894, at which time the parties closed the testimony. Thereupon full argument by counsel was heard by the master; and at the close of the oral argument, at his request, the different counsel, including Messrs. Cooper & Cooper, filed briefs. The master made a very full and able report of his findings, which was filed June 6, 1894. To this report the defendant railway company, by its solicitors, Cooper & Cooper and T. M. Day, submitted 21 exceptions, touching more or less all of the substance in the master's report, and thus renewing before the court the exceptions which they had been most alert, fertile, and strenuous in urging before the master pending his hearing and consideration of the matters. An act to change the boundaries of the judicial districts of the state of Florida, approved July 23, 1894 (28 Stat. 117, c. 149), provided for holding terms of the circuit court for the Southern district at Jacksonville, and that all cases then pending in the circuit court for the Northern district at Jacksonville be transferred to the said circuit court for the Southern district. On this account, probably, the master's report and the exceptions thereto did not come on to be heard until December, 1895. The hearing thereof was then had before the Honorable James W. Locke, the judge for the Southern district of Florida. He was a member of this court, and took part in the hearings and decision of the appeals above referred to, when the same were before this court. After having fully heard the report of Receiver Young, and of the special master thereon, and all the exceptions thereto, the circuit court, on December 27, 1895, adjudged and decreed that, in regard to all accounts approved and allowed in the master's report as paid or unpaid, the same be approved and allowed, and the master's action therein confirmed; that the amounts conditionally approved by the master be approved upon a compliance with the conditions declared and specified by him; that the amounts found by the master to be due from the railway company as operating expenses, less such amounts as have already been paid by the present receiver upon orders of the court, to wit, $88,086.32 (remaining unpaid), be declared to be due from the railway company, and a first lien upon the property. And it was further adjudged and decreed that the amount of $46,374.39, found by the master to be due from the defendant railway company on account of the operation of the Florida Southern Railway Company, be approved as justly due; but it appearing that Mason Young had turned over and paid to the Florida Southern Railway Company, upon his retiring from the receivership, the sum of $47,558.95,-a sum exceeding the indebtedness found due as above,-it was adjudged and ordered that the sum of $46,374.39 is due from the Florida Southern Railway Company.

On January 17, 1896, the circuit court passed a decree in the stockholders' suit as follows:

"It appearing to the court, in the above-entitled cause, that the entire corpus of the railroad property of the defendant the Jacksonville, Tampa & Key

West Railway Company is in the possession and control of the receiver of this court, heretofore appointed in the cause of the Pennsylvania Company for Insurance on Lives and for Granting Annuities against the Jacksonville, Tampa & Key West Railway Company, the American Construction Company, and the Mercantile Trust Company, and that any decree heretofore made or to be made in this cause, establishing a lien of priority, and requiring payment from the corpus of the property of the said Jacksonville, Tampa & Key West Railway Company, or from the proceeds of the sale thereof, must be transferred to the cause under which the said receiver is acting, for payment; and it further appearing to this court that a final decree of foreclosure has been entered in the said cause of the Pennsylvania Company, etc., and that it is necessary to ascertain and determine the status of all claims against the corpus of the property of the said Jacksonville, Tampa & Key West Railway Company in the hands of the said receiver, and to classify them in order of their priorities, and determine the aggregate amount of the same, before a sale of the said property under the foreclosure decree can be made: It is hereby ordered and decreed that all interventions or claims in this cause which have been heretofore decreed to be liens upon the property of the Jacksonville, Tampa & Key West Railway Company, together with the approved unpaid operating expenses of Mason Young, late receiver herein, and interventions or claims, all interventions or claims not yet finally adjudicated, which are claimed to be entitled to be liens upon the corpus of the property of the said railway company, be, and are hereby, transferred to the cause of the Pennsylvania Company for Insurance on Lives and for Grauting Annuities against the Jacksonville, Tampa & Key West Railway Company, etc., for such reference, decree, or order as may be made in that cause."

And on the same day the following decree was passed in the bondholders' suit:

"It appearing to this court that it is desirable and necessary to adjudicate, determine, and classify the status and priorities of all interventions, claims, judgments, and decrees heretofore rendered in this cause, or now before this court for trial and determination, including such claims and interventions in the cause of the American Construction Company against the Jacksonville, Tampa & Key West Railway Company as have been transferred to this cause, before a sale of the corpus of the defendant the Jacksonville, Tampa & Key West Railway Company, in the hands of the receiver of this court, under final decree in foreclosure heretofore rendered, it is ordered, adjudged, and decreed that all unpaid interventions, claims, judgments, and decrees brought in this rause, or originating in the said cause of the American Construction Company against the Jacksonville, Tampa & Key West Railway Company, and transferred to this cause, including the approved, unpaid operating expenses of Mason Young, receiver in said cause, whether the same have been fully adjudicated, or are now before the court for trial and determination, be, and the same are hereby, referred to Charles S. Adams, Esq., as special master herein, with instructions-First, to take testimony and report his findings of law and fact upon all matters not heretofore adjudicated and determined; second, to investigate and report to this court the relative priorities of all matters heretofore adjudicated, the priorities of which have not been declared by this court; third, to ascertain and report any items of indebtedness under the present receivership; fourth, to ascertain and classify as nearly as possible all interventions, claims, judgments, etc., referred to and passed upon by him, and report the aggregate amounts as classified; and, fifth, to make report of his acts and doings thereunder at the earliest practical time."

In obedience to this order of reference, the special master set February 23d for beginning the hearing of the matters involved, gave due notice thereof by publication, and personally served the attorneys of record with notice of the hearing. The solicitors for the complainant and for the committee of the first mortgage bondholders, on behalf of these parties, filed written objections against the consideration of any of the indebtedness of Mason Young, as receiver, in

the case of the American Construction Company against the defendant railway company, on the ground that the complainant and the bondholders never intervened nor were made parties to that suit, and that the orders of the court in transferring the claims and interventions to this cause were irregular and without authority of law, and upon the further ground that all of the claims were subsequent in point of time to the first mortgage, and subordinate in dignity thereto. After a somewhat protracted and very full hearing on all the matters embraced in the reference, the master made his report. It was exhaustively excepted to by the solicitors for and on behalf of the complainant and of the committee of first mortgage bondholders. The exceptions were all overruled, and the report of the master confirmed by a decree passed November 11, 1897, from which this appeal is taken.

The assignments of error are, substantially: (1) That the court had no authority to transfer the matter of claims against Mason Young, receiver, from the stockholders' suit to the bondholders' suit; (2) that the court had no authority to adjudicate the indebtedness of Mason Young to be a first lien on the railroad property; (3) that the court erred in finding that $88,086.32, the unpaid operating expenses of Receiver Young, $593.33 allowed Johnson & Wilson, $484.56 allowed the Sanford & St. Petersburg Railroad Company, $1,600 allowed Special Master King, $97.23 allowed Snodgrass & Field, and $191.20 allowed John G. Christopher, are a first charge on the property, and the $500 allowed J. R. Parrott has a lien prior to the second mortgage.

It

It is apparent from the record that immediately after the passing of the decrees on April 7 and 8, 1893, Receiver Young surrendered to Receiver Durkee all the property of the defendant railway which was covered by the first and second mortgages, including $22,648.27 cash on hand to the credit of that estate at the time of the surrender. also appears that he duly filed his accounts as receiver of that estate. He surrendered the properties of the Florida Southern Railway Company, including $47,558.95 to its credit, to the owners thereof, in compliance with the order of April 7, 1893; and they committed it to their general manager, Robert B. Cable. In the order of July 23, 1892, appointing Cable receiver, it is provided, among other things, that he is authorized to pay the indebtedness of the railway company heretofore incurred for expenses of operation during the months next preceding the date of the order. In the decree passed August 4, 1892, in the stockholders' suit, after the bondholders' bill had been exhibited, and simultaneously with the order staying proceedings under that bill until the further order of the court, Young was appointed receiver of the property (both the bills and all the proceedings thereunder being fully before the court, and full consideration having been given thereto), and was thereby authorized and ordered to pay all indebtedness of the railway company theretofore incurred for expenses of operation, including repairs, supplies, material, labor, and services which had been incurred within the period of six months next preceding the date of the order, in the decree of April 8, 1893, appointing Durkee receiver, it is provided, among other