The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1873-12-06
SEIZURE OF THE RAILROAD.

The State Of Louisiana Sues the N. o.,
N. & 7. B. B. Co., for Eight Millions
Of Dollars-The Road Seized and
Placed In the hands Of Receiver.
In the Superior District Court of
New Orleans, last Tuesday, the fol-
lowing petition was fled by the Act
ing Attorney General of the State:
State of Louisiana vs. New Orleans, Mobile
and Texas Railroad Congratulations
alleges debt of defendant of 1870, 200. Tor
this, to wit: Act No. 81, approved February
2, 1870, authorized petitioner to deliver to
the New Orleans, Mobile and Chattanooga
Railroad Company, $50 bonds of the State of
Louisiana, of $1,000 each, dated July /. I870.
payable forty years from date, with interest
at eight per cent; that they were delivered
to the company on the completion of the
road from New Orleans to D0naldsonville I:
that the interest for 1871 and 1872 has been
paid by petitioner, amounting to $l27. 900 !:
that these bonds were issued on the agree
ment that the road should be Completed tn
Houston, Texas, within three wears from III.
ing the agreement with the Secretary of
State, which was within ninety days of the
passage OF the act, and if the road was NOT
completed within three years. the comnanv
was bound to return all the bonds which
might have been issued and be held by the
company, at that time, and to pay the State
Treasurer for those disposed of
Petitioner AYERS that the agreement was
fled; that S75O,000 in bonds were issued and
delivered; that more than three years have
elapsedi that the company has failed to con-
struct the railroad; that they are bound tn
return the bonds aud pay back the $l27, 900
interest, this debt being exclusive of s.. 500
Wy In bonds fraudulently obtained from pc
titioner in 1871.
That, March 8, 1869. the company executed
a mortgage to Henry j. Gardner and Peter
y. Butler, as trustees, attempting to convey
the entire road from Mobile to Houston. to
secure the payment of $400, 200 of bonds.
payable April |, 1920. March %, 1873 the
company having failed to pay the interest,
the trustees took possession under the mort
gage. April z, 1873, the trustees, colluding
with the officers of the company to defraui
petitioner and other creditors, filed bill in
the United States Circuit Court to foreclose
the mortgage; that the officers of the corn
pany filed an answer April 4, 1873, ADMITTING
the insolvency of the company, and confes,
sing the allegations of the bill April Ia! 1879
. sale was decreed, and june 6, 1873 was
sold by j. w. Gurley and R. H. Shannon.
masters In chancery. That portion from New
Orleans to Donaldsonville was purchased |
oy the trustees for 500, 600; that from Dom |
lldsonville to the Sabine river for $50. 0OG. |
hat the trustees paid no money for their |
purchases, but retained the proceeds as trus- |
ees; all of which appears m the said suit. |
No. 695S of the United States Circuit Court
That said sale was coIlusive and fraudu-
emit, with the intention of defrauding peti-
Toner; that the trustees knew the property
t the company was insufficient to nav its
ebts; that it was insolvent, and the said
Gardner and Butler are now in possession of
he road. That the issue of bonds March 3 /.
So9, and the mortgages were never author
led by the New Orleans, Mobile and Texas
.aiiroad Company, nor by the New Orleans.
lobile and Chattanooga Railroad Company
nd as far as the State of Louisiana are mil
nd void. That the resolutions authorizing ,
ne mortgage, as approved on its face, was !
assed by the directors in New York. and
he laws OF Louisiana require the domicil TO {
within the State, and any resolution passed !
1T of it is unlawful, Act No. " of 1857; re- !
lacted 1870 !
That the company was insolyent at the i
me OF these proceedings, to the knowledge | q
the bondholders and trustees, which were !,
tended to give an unlawful preference TO s
editors; that the creditors have a priyi- 4