Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1871-04-05
UNION AND AMERICAN
RAILROAD LITIGATION.
Important Opinion OF Judge
East.
Plea in Abatement Sustained

Chancellor East, on the Sd inst, deliv.
cred the following opinion, in the Chan.
Gerry Court, sustaining the plea in sbate.
ment filed by counsel for the Memphis,
GAINESVILLE and Louisville Railroad
The bill is filed in the name of the
State of Tennessee against some eleven
railroads of the State, to which railroads
the State has heretofore granted State
aid, by virtue Of the general internal i'm
provement laws of the State, and to &C.
cure itself, the State had taken upon each
road a statutory lien or mortgage. The
bill was flied by virtue of an act passed
Dec. 81, 1870.
By an act approved July 3, 1870, q
board of commissioners were organized
and empowered $50 sell theinterest of the
State of Tennessee in all railroad compa-
MES of the State, to which the bonds of
the State have been loaned" under the in
ternsl improvement laws, and which roads
nave failed for two consecutive years
TO pay the interest that has accrued upon
onds loaned to them severally." The
commissioners proceeded under this law
to advertise the same for sale, and on the
Sd of November, 1870, undertook to sell
the same at public sale to the highest
bidder, but failed to receive a bid for
either road. They reported the fact to
the Legislature at its succeeding session,
aAd embodied in their report many sug-
gestions and reasons for the failure to
sell, and recommended to the Legisla-
ture, with a view to obviate all the sup
posed difficulties, plan of proceeding
by which the object of the Legislature
might be consummsted. This led to the
passage of the act of Dec. 81, 1870, en-
titled can act to amend the act of 1870,
chapter 70, for the sale of (the) interest
of the State in delinquent railroad COM
psnies, passed July l, 1870" and ap-
proved July 5, 1870. The preamble 10
this act recites that in the recent attempt
TO sell the Estates interest In said roads
various legal questions were presenting
serious obstacles to sale," and that ii is
deemed expedient and necessary to obVi-
ate these before again otferingto sell; and
therefore it was enacted that bill be
filed Gin the name and behalf of the
MES, the respective stockholders, holders
of the bonds, creditors, and all persons
interested in the said several roads shall
be made parties defendants, and shall
be brought before the court in the mode
prescribed by the rules of practice in
Chancery established in the State, except
as otherwise herein provided. To this
bill eleven railroad companies situated
and located in various parts of the State
have been made defendants. One of
these, to wit: "The Memphis, GAINESVILLE
and Louisville Railroad Company, has
filed the following plea:
''That the act of the Legislature, undt 7
which The bill is filed, requires that the
Memphis, GAINESVILLE and Louisville Rail
road Company, its respective stockhold-
ers, the holders of the bonds issued
by the State, in aid of said COM
pany, and the holders of the bonds
issued by said company to different par.
ties, creditors and all persons interested
in said railroad shall be made defendants
and be brought before the court in the
mode prescribed by the rules of practice
in chancery established in this State. j
The plea proceeds to sllege that the fol
lowing persons are not made parties, and
are not before the court, in any way
known to law, TO wit:
l, The stockholders of said road.
2. Holders of bonds issued by the
State before the war to the amount OF
$l,042, 600, and since the war to the
amount of $40, 900.
3. Holders of second mortgage bonds
issued by the company heretofore, by
virtue of an act of the Legislature, EN-
towering it to issue the same, and &c
mortgage its road bed, rolling stock, etc.,
to secure the same, and in pursuance
thereof the company did issue, on the
- day of --, 1860, bonds to the
amount of $3.50, 900, and TO secure the
same, executed a mortgage TO James
Guthrie and D. n. Kennedy, Trustees,
and the same was duly registered, and
that neither the holders of said bonds OF
either of said Trustees are made parties.
4. That the State of Tennessee, on the
- day of -, 1866, placed sale
road in the hands of Receiver (onC
Lewis, who, in the management of tht
same for several years, issued due bills
for work and labor done and material
furnished on account of the road. AnC
after the resignation of said Lewis
another Receiver was appointed by the
State, who also issued due bills for the
game consideration. That said bills
amount to more than 5000, 600, and ar,
hel by various parties whose names anC
residences are unknown, and if known
are too numerous to mention. (Here thu
plea gives the names and residences o.
two such creditors and then proceeds Il
sllege: "That said parties claim lieI
on said road, and that the State of Ten
nessee is indebted to them in the sun
mentioned in the several due bills. Tha
tie names of these parties are wei
known to complainant, as well as thei
residences These persons, the pie,
alleges, are not made defendants.
{. Many other persons, who are credi
tors of said road, generally, are not made
parties.
The plea concludes with prayer o.
Judgment of the court, whether 1t shall
be compelled to make any other or fur
ther answer, etc, etc.
This plea is set for hearing upon it
sufficieucy, and The sole question upol
which a decision Of the court is demanded
at present is, whether it is sufficient unde
the rules of this court.
We will n)w turn TO the bill and Sc