Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1873-04-26
RAILROAD DECISION.
The Case Of the COvingtOn and Lexing-
ton Railroad vs.. Bowler, De-
cided In Favor of the
Plaintiff.

CINCINNATI, April 25.-Private dis
patches from Frankfort, Kentucky,
reached here at noon, stating that the
Kentucky court of appeals had rem
deTed decision in the celebrated case of
the Covington and Lexington railroad
company against the heirs and admin
istrator of K. b. Bowler, and others, who
since 1859, have held the road by
virtue of purchase at sale, decreed
by Fayette county circuit court,
to satisfy the trustees Of the second mort
gage 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 the commissioners appointed by
the proper courts shall adjust the claims
between Bowler's heirs and the compa-
ny from the date of the trans
fer, in 1889, 70 the date of the
restoration of the road to the Cow
ington and Lexington company.
The decision of the court was unani-
nous. Its members are: Chief Justice,
William 5. Pryor; associate judges, w.
r. Harden, II. J. Peters, and William
Lindsay. The building OF the road COM
menced in 1850, under the State charter,
with one million three hundred and
eighty thousand dollars stock. Sub
scription loans Of bonds, secured
by double their amount in stock,
were obtained as follows: Cinein-
natl, Ohio, and Bourbon county,
Kentucky, each one hundred thousand
dollars; Covington and Fayette county,
each, two hundred thousand dollars;
Pendleton county, Kentucky, fifty
thousand dollars. These bonds were
disposed of ty the road. The bonds
were issued as follows: First mortgage,
four handred and twenty thousand dol
lars; second mortgage, one million dol
lars third mortgage, SIX hundred thou
sand dollars. Income of the bonds.
nearly six hundred thousand dol
lars, making q total debt on this
score OF three million two hund-
red thousand dollars. From 1854 to
1857, the road seemed prosperous,
at the close of which period the board
suspended the payment ofinterest on the
above eight hundred thousand dollars
securities. Early in 1858, the directors
appointed committee to make over
lures to holders of first and second
mortgage bonds to consent to the post
ponement of interest on these bonds for
one year. In 1858 committee of the
directory reported by printed circular to
the stockholders and bondholders
that the eight hundred thousand dollars
were needed to make the road first
class. A few months later James Wins
low, trustee, foreclosed the first-mort-
gage bonds, and obtained decree in
Fayette county for the sale of the road.
In October, 1859, it was sold to r. B.
Bowler, then director of the company,
for two million one hundred and twen-
ty-five thousand dollars. Bowler. at
the time he bought the road, owned
one million one hundred and thirty
seven thousand dollars of securities.
none of them being seeond-mortgage
bonds. The new board of directors, ex-
cepting one man, which was elected
Immediately after the stockholders
held their meeting, refused to
sanction the sale of the road.
1t was run by the purchasers till the war,
when the government took possession
Of it. After The war the suit which has
lust been decided was started by the
compalIy Ia 1855 in the Kenton circuit
court, and filling there, was taken to
the court of appeals. Eighteen months
ago nearly, il was argued for the COM
pany by Hon. Henry Stanbury,
Stanley Matthews, John T. Fisk and
Others, and for defendants by NJ. c..
Johnson, NJ. M. Benton, Harvey Meyers,
and CIR. Mckee. Hon. G. II. Pendleton
was present to represent the heirs but
did not argue. The arguments of
PLAINTIFFS counsel were that Bowler at
the time of purchase was occupying
position Of ti.nst in the company, and
whether acting In good or bad faith, he
could hold the road only in the capacity
of trustee to company.
A special to the Gazette, from
Frankfort tonight, confirms the
report of the decision, and states
the court holds that by account
ing to the Bowler heirs and other de-
PENDANTS, for their expense jim satisfae-
ton of judgement of the Fayette court,
and of repairs and improvements on
the road, the company are entitled to
a share of the profits realized from the
road while out of their hands, and to !
resume control of 1t upon complying
with the terms OF the Fayette court |
judgment. The mandate, fixiug the ba-
sis for settlannent Of accounts between
the parties, Will he prepared and hled in
a few days