Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-04-26
HISTORY OF A LAW SUIT.
A Bit of Huge Railroad Financeering
Stockholders Recover Their Rights
after Fifteen Years.

Stockholders Recover Their Rights
after Fifteen Years.
CINCINNATI, April 25.-Private dis
patches from Frankfort, KY, reached here
at noon stating that the Kentucky Court of
Appeals had rendered a decision in the
celebrated case of the Covington and Lex
ington Railway Company against the heirs
and administrators of K. B. Bowler and
others, who since 1859 have held the road
by virtue of purchase at sale decreed by
the Fayette County Circuit Court to salts
fy the trustee OF the second mortgage
bonds. The decision of the court is that
the heirs of r. B. Bowler do not hold the
road in their own right but as trustees for
the Railway Company, and that commis-
sioners appointed by the proper courts
shall adjust the claims between the Bowler
heirs and the company from the date of the
transfer in 1859 to the date of the restora-
ton of the road to the Covington and Lex
ington Company. The decision of the
court was unanimous.
The building of the road commenced in
1850 under State charter, with ST. $4,000
stock and subscription loans of bends Sc
cured by double their amount in stock,
were obtained as follows: Cincinnati,
Ohio, and Bourbon county, Kentucky, each
one hundred thousand; Covington and
Fayette county, Kentucky, fifty thousand.
Pendleton county, KY, fifty thousand;
These lands were disposed of by the road.
The bonds were issued as follows: First
mortgage four hundred and twenty thousand
dollars; second mortgage one million dol
lars; third mortgage six hundred thousand
dollars; income bonds nearly six hundred
thousand dollars, making total debt On
this score of three million, three
hundred thousand dollars. From
1854 to 1857 the road seemed
prosperous, at close of which period the
board suspended payment of interest on
about eight hundred thousand dollars Sc
curity. Early ia 1858 the directors ap-
pointed a committee to make overtures to
the holders of the first and second mort
gage bonds to consent to pos ponement of
the interest on these bonds for one year. In
1868 q committee of the directory reported
by printed circular to the stockholders
and bondholders that eight hundred thous-
and dollars were neeIed to make the road
first class. A few months later James
Winslow, trustee, foreclosed the first mort
gage bonds and obtained a decree in Fayette
Court for the sale of the road. In Octo-
Der, 1858, it was sold to r. 3. Bowler, then
Director of the Company, for So, 900
Bowler at the time be bought, owned 81,
$4,000 of the securities, none of them Sec
ond mortgage bonds. An entirely new
BoardIof Directors, excepting one man, was
elected Immediately after. The stockhol-
ders held meeting and refused their sane
ton to the sale. The road was run by the
purchasers till the war, when the Govern
ment took possession of it. After the war,
the suit which has just been decided, was
started by the company in 1865 in the Ken
ton Circuit Court, and failing there, was
taken to the Court of Appeals eighteen
months ago nearly.
1t was argued for the company by Hons.
Henry Stanberry, Stanley, Matthews, Jno.
+. Fisk and others, and for the defendants
by NJ. G. johnson, NJ. M. Benton, Harvey
Meyers and G. r. McGee. Hon. Geo. Il.
Pendleton was present to represent the
heirs, but did not argue. The arguments
of plaintiff, counsel were that Bowler at
the time of the purchase occupying posi-
tion of trust to the company, whether acting
in good or bad faith, could only hold the
road in the capacity oftrustes b the company
Specials to the Gazette from Frankfort
tonight confirm the report of the decision,
and states that the court holds that, by &C
counting to the Bowler heirs and other de-
PENDANTS for their expenses in satisfaction
of the judgment of the Fayette court, and
of repairs and improvements on the road,
the company are entitled to share of the
profits realized from the road while out OF
their hands, and to resume control OF it
upon complying with the terms of the Fay
cite court judgment. The mandate fixing
a basis for the settlement of the accounts
between the parties, will be prepared and
filed in few days.