The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-03-14
BOSTON, HARTFORD AND ERIE.
The Legal Contest for the Road Com
tinued-Shall the Injunction be Is
sued:-Arguments Pro and Con-The In
terest OF the Commonwealth OF Massa-
chusetts.

chusetts.
BOSTON, March 10, 1873.
The case of the Boston, Hartford and Erie Rail-
road proceeded to-day in the United States Court,
General Butler for complainant. The Erie Railroad
offered to pay whatever sum the Court should de-
eide to redeem the foreclosure. Mr.. Russell, for
the trustees insisted that if the railroad wished to
pay the sum the offer should be made as have been
the other statements, upon oath, and put into the
bill before any decision should be rendered on the
motion. General Butler said that it would be in
serted in the bill as soon as he could send to New
York and get sworn statements.
Tx. LOthrOp continued the argument fer the
trustees. The bill claims the funds raised on the
BerdeI mortgage were diverted from the use for
which they were raised. The underlying bonds are
not held by the trustees muniments Of ttle but
as assets of the Boston, Hartford and Erie Railroad
in bankruptcy. 1t is asserted that 100000 OF the
Berdell bonds were wrOngfully issued and there Is
danger that these will be regarded as valid bonds
and he recognized as such in the bankrupt suits.
The trustees are in possession OF the property for
the purpose OF foreclosng mortgage under
DEGREES Of the highest tribunals OF Rhsde
suits in which these DEGREES were made
were brought by an individual bondholdcr fer his
President OF the Boston, Hartford and Erie Rail-
road had taken an active part in the conduct Of
trustees and assignees from selling or making any
disposition OF the property. The first inquiry is
WHO ARE THE PARTIES TO THE sUITS
Jurisdiction Genes to the Court either from the
residence of the parties or the nature OF the suit.
The complainant, and the emily complainant, is the
Erie Railroad, of New York. The assgnees in
bankruptcy are composed of three men, one resi-
dent OF Massachusetts, and the other two are non
residents. The trustees OF the Berdel mortgage
and OF the underlying mortgages are not citizens of
Massachusetts The Court has not Jurisdiction
over the snit by reason Of the subject matter.
Another reason why the bill should ne dismissed is
because IL ia nagrantly nultiferOus, number Of
bills OF equity and suits being huddled together In
the bill. All the suits which could have been
cages and trustees have been brought. There are
five underlying mortgages, bringing in trustees OF
other mortgages; II also brings in, directly or in
directly, the holders OF s. 500 Berdell bonds, claim
ing they are not valid obligation TO the company,
and pfays, directly or indirectly, that that ques-
ton may be settled. IL asks that trustees under
the mortgage who are citizens Of Massachusetts
and New iork may be brought before the Court
counts saa iS%Rs : 4 T. ds ms to Ts uSs s
tees. 1t would interfere with - .--,:-s,..,
SUITS IN srArE COURTS
OF competent jurisdiction, II instituted against the
Boston, Hartford and Erie Railroad before the COM
mencement OF this suit. TO grant the injunction
would affect the status Of the case in she State
should be asserted in the State Courts. The plain
tlfs show no bill Which gives them priority over
the opposite side claim to become cognzant OF only
within ninety days, 1t has been matter OF pab-
lie n0toriety for two years. BY the contracts they
acquired no paramount claim over the other bond
holders in the suit.
by the Court did not suppose their interest
was claimed to be paramount except so far as they
have guaranteed the payment Of the interest on
the bonds. -.
General Butler--That,s all we claim.
Counsel-The contract was merely guarantee
70 certain extent of the credit of another road.
The contract provided security to the Erie Rail
road out Of its earnings. II the coupons had been
palu the E.1e would acquire no other rights than
holders OF other coupons which are still unpaid
They claim that by the payment OF the coupons
AcLAIM PRIOR TO THE HOLDERS OF TIE poSps
themselves The foreclosure OF the mortgage will
not dsplace or aflect the lien or the rights Of the
holders OF the first mortgages The Erie road will
suffer no loss by the foreclosure. II they have
rights under the Berdcll mortgages those rights
the corporation and the holder of bonds.
The closing point Of the argument was the ire
parable mischief the injunction would do 10 the
holders OF the bonds as they have no security nor
first lien. The delay would be productive OF ire
parable injury to them.
Mr. Russell then made an argument in favor OF
the trustees, the argument consisting simply OF q
resume OF the points raised by Mr.. Lothrop.
Mr.. Bradley, for the assIgnees, At the close OF
Mr.. Russes argument arose and stated that for
the present he would defer any argument.
THE INTEREST OF THE COMMONWEALTH.
Attorney General Allen in behalf OF the Com
monwealth OF Massachusetts, then stated that the
Commonwealth Is the owner OF 5000 of the Berdell
The money put IN by the Commonwealth was put in
under the belief that the funds would be used
by the Boston, Hartford and Erie Railroad, and they
would be asle with funds added 10 those already IN
their possession TO construct the road from Boston
to Fishkill. The funds were sacredy devoted to
the purpose for which they were designed and
granted The only interest the Commonwealth has
or had is the public welfare while the Erie road
had as their object the profits from the road. AS
Is admitted the source OF all the trouble Is the be-
traya OF trust by their own officers and assuredly
the equities 10 not demand for that reason the
granting OF the Injunction.
ERIE IN REPLY.
MI MacFarand, OF New York, counsel for the Erie
road followed On the other side. lie reviewed in
an able and scholarly manner the qualities and
character OF mortgages, and traced their history
rom early English times 70 the present day; and
having deduced from the history OF mortgages the
leading and vital principles which are component
parts Oh all mortgages he applied them to the pres
ent case. There was very little utility In the
mortgage OF property, he said, unless the franchise
Is mortgaged with it.
The case WILDE continued IN Court tomorrow
morning,