Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1869-08-05
The Rutland and Burlington
Railroad.

The following are the remarks Of Chan
cellnr piorpont, at Vergennes, Vt, on the
Odd instant, when dismissing the petition
of the Rutland Railroad Company for the
transfer to them of the road and property
of the Rutland and Burlington Railroad
Company
1t is conceded that the property aud
interests in question are of great value.
There is no question but the property
belongs to two interests. The first mort
gage bondholders on the one hand, and
the Rutland Railroad Corporation on the
other.
That corporation stand, in the position
of the second mortgage bondholders, and
their rights are subsequent to the rights
of the first bondholders. The second
mortgage having been foreclosed, the en-
tire interest in the property is in the first
bondholders and the Rutland Railroad
Corporation.
A bill is pending in the Supreme Court
to enforce the mortgage. In that suit the
validity of the first mortgage and of the
decree of 1885, and the propriety of en-
forcing them in that form of proceeding,
are questioned. Pending that bill the
second mortgage trustees are enjoined not
to transfer the possession OF the property,
nor pay out any money derived from the
income and earnings of it, except to a GER
| tain extent and for certain purposes. The
object of this injunction Is to keep the
PROPERTY in the hands of the second mort
gage trustees until the rights of the par
ties in interest are settled and determined.
| This was the policy and intention OF the
court in granting the injunction.
The practical question now under con-
sideratioh is, shall the injunction be dis
solved and the property be put into the
hands OF the new corporation
| If this change of possession is made,
the property will be Withdrawn from the
operation of the in junction, aud the Rut-
land Railroad Company will be left free
to act Independently of the injunction
and this, apprehend, is the substantial
object sought by this petition The OBJ
| ject of the petition evidently is to get the
property out of the reach of the injunc-
| ton.
1t is said that the interests and necessi-
ties of the property require that its facili-
ties for the transaction of business should
be increased. How is this end to be at
tanned by granting this application The
interests and property of the Rutland
Railroad Corporation are as valuable with
the road in the hands of its present man.
agement as they would be if the posses
sion were changed and the credit of that
corporation would not be improved by the
change desired.
| If the transfer of the possession TO the
corporation would authorize it to use the
II f,,rI tb. .Nf thr
road, in the purchase of rolling stock. the
transfer would, of course, enable the cor
poration to make such purchase /; bnt such
would not be the effect OF transfer
/ l think the Rutland Railroad corpora
j ton will promote its own interests rs
much or more by paying the first mort
gage bonds, as by having the possession Of
the road and using its funds in the pur.
chase of rolling stock. 1t is conceded by
Judge Poland that the first bonds are
valid and must be paid. Why not pay
them?
I While the suit is pending in the Su.
preme Court it is not wise or polite to
disturb the possession of the property, and
take the chances of what the result on
the final decision may be.
/ In regard to an investigation to ascer,
tain the amount due on the first bonds,
see no reason why it may not be done in
this Loring) suit but, at The same time,
it seems better that l. should not be, az
all these matters, and the validity OF the
frst mortgage, are in litigation in the
other case If the validity of the first
mortgage is sustained, then the injury q
to the amount of the issue of first bopds
may be instituted In the case now pend
ing in the Supreme Court. If that mort
j gage IL held to be invalid, no inquiry az