Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1855-06-08
VT. and Canada II. II. VS. VT.
Central r. r.:

The hearing in Chancery, between the
Vermont and Canada Railroad Company and
the Trustees of the first mortgage Bonds, of
which we made mention n week or two ago,
took place this week at st Johnbury, before
Chancellor Poland. As the subject Is one
of interest to Il great number Of persons, the
stockholders in both companies and the hold
ers of Vermont Central Bonds, il may be
useful to the state the case briefly, in con-
necton with the decision Of the Chancellor.
The bill stated that in 1850 the VT. and
Canada Co. leased lis road to the VI. Central
for fifty eight years for rent equal to eight
per cent per annum upon the whole cost Of
the Canada, represented in the stock issued
at thirteen hundred and eighty thousand dol>
lars or one hundred and eight thousand dol
lars per year, payable half yearly in equal
instalmen,s that the Central to secure the
regular payment of the rent stipulated that
whenever the rent should be due and in ar
rears four months, the Canada Company
should have the power to take possession Of
both roads and all the property of every de-
scription used in connection herewith, and
run the same until the increase, after paying
running expenses and repairs, should be suf.
fcient to pay all the rent which should then
be due, whereupon the roads and property
should be surrendered to the Contra, -that
in 1852 the Central surrendered the roads
and property to the Trustees Of the mortgage
bonds, and that the rent had been paid up to
June, 1854, that fiity-four thousand dollars
rent due in december 1854 had not been
paid, and that the Canada Company had be-
come entitled TO take possession, that the
first mortgage and the surrender to the
Trustees under It were made after the exc
cuton OF the lease and contract for security
and IN express subsection to it,--that the
Canada Company had demanded possession
of either roads or personal property. (the per-
son0l property amounting to about eight
hundred thousand dollars IA valucl aud pray
ed for an injunction or receiver. The
answer OF the Trustees admitted the due cx
ccuton of the instrument above mentioned
and the non-Dayment of the rent, but stated
that not more than one half of the personal
property now in their hands was in existence
when the lease was made,--that about one
quarter Of it had been added by the Central
after the lease and the other quarter Of /,
had been procured by the Trustees with trust
funds since they took possession, and that
the Trustees were still liable personally for
about two hundred and fifty thousand dollars
for means TO carry on the business, that the
Canada Company was justly indebted to the
Central Company in the sum of about two
hundred and fifty thousand dollars for money
service, and other things furnished by the
Central TO the Canada to aid IN the construc-
ton Of the Canada road, and thereupon in
sisted that the Canada Company had no right
to the possession of the road or personal
property. The Canada Company denied the
existence Of this indebtedness to the Cen
trial. The motion for an injunction or re-
ceiyer was argued at length, by Mr.. Adds of
ST. Adams, and Mr. Edmund, of Burlington,
for the Canada Company, and by Mr.. Peck
Of Montpelier and Mr.. Phelps of Burlington,
for the Trustees.-The Chancellor decided
LIST, That the contracts between the Cana Ia
and Central covered personal property ac-
qulred subsequent to the lease as well as that
then in existence. Cd. That as the Trus-
tees took their title IN express subsection to
the right Of the Canada this right was good
against them Sd. That upon the conceded
facts In the case, the Canada was entitled to
an injunction to restrain the trustees from
molestlng them in taking possession. 9TH.
That as to the alleged debt due from the
Canada to the Central-even if the trustees
had every right to set that up as Audience,
innsmuch as this was asserted by the trus-
tees and denied by the Canqda, it was upon
the trustees to make it out, and that so much
doubt was thrown upon it by the evidence,
that it would not justify the Court in refusing
the injunction. The trustees were accord
ingly cnioined from hindcring or molesting
the Canada Company IN taking possession OF
the two roads and the personal property, up.
on the Canada Company giving sufficient Sc
curity to the trustees in respect to their La
biities, and also to hold the earnings Of the
roads (afler paying expenses and repairs,
md the properly subject to the order of tho
Court.