Green-Mountain freeman. [volume] (Montpelier, Vt.) 1844-1884, 1873-02-26
The Railroad Litigation.

In December there came due the Vermont
and Canada Stockholders Sl20 goo from the
Vermont Central. Mr.. Books, president of
the Vermont aud Cinada R. R., moved be-
fore Chancellor lyce, for an order to compel
the trustees and receivers of the Vermont
Central to pay this money An adjourned
hearing was held in St. Adams, on Wednes-
day. Mr.. Brooks was present and with him
Hon. Heman Royce and Il N E Hard,
as cur sci. Hon. B. F. Fiji I'D, Hon. Levi
Underwood, Hon John W Stewart, II N.
Jasper Rand, Messrs. Noble Smith
Davis L Adams aud CD. R. c. Benton,
appeared as counsel for the Vermont Cen
trail.
Governor Smith filed an answer to the
motion wherein he set forth that the Trus
tees had expended upw ird of 1920 900 more
on the construction of the Burlington Branch
Through the runnrD than additional VT
and Canad Stock had been issued for, there
fore they ought not to be compelled to pay
div ENDS until This sum is met.
Before the hearing beg n. anut er proceed
ing was commenced by the filing 0t petit
ton by VI. b. carpenter, OF s.. Al5ans, a.
counsel for the First Mortgage BOndHolders
of the Vermont Central, praying for the re-
moyal Ut ali the pl esent Trustees and Man
ayers, on the ground OF mlsm anagement and
fraud The petltion,,1s. signed by bond
hoiders swoing $I83 900 of bonds, most Oh
whom live in Massachusetts,.
The following is the substance of the petit
ton presented by Mr.. Carpenter;
Firs-Tbat on the LIST day Of Deem
Der last, the trust funds in the hands Of the
Managers, properly and lawfully applicable
to the payment Of the interest on sad first
mortgage bonds then payable, were sufficient
for that purpose, and should have been 50
applied but if it shall appear that sad
managers were not at that time in the actual
possession of the cash funds as aforesaid, the
petitioners show that sad funds had beeu
before that time improperly and unlawful!
applied to some other purpose.
0nd-T1at two of said trustees j.
Gregory Smith and joseph Clark are I'M
suitable and improper persons to tie retained
10 Office as such trustees, because Tor several
years pasr hey have en- the owners o the
Montreal Il VI. Junction Railroad; and have
AIKEN FROM le earnings of the We. Central
in their hands az managers, large sum to
their own personal and private account and
~
VI. Junction K. R, claimed to be owned b,
them, and such sum being greatly dispro-
o rLionate to The amount of earnings OF
advantage derived from the last-named
road
Third-That all Of said Managers bcins
pr0prIetors AM large stockholders in the
NItIonal Car Comp'ry, did as the Manager,
aud Receivers enter into d contract with sad
car Company, whereby the latter did re
ceIve aud reaIIz5 excessive sums for the
Of their cars, thus contributing to the ndi-
vidual gain aud profit of the said Manager
as such stockholders
Fourth-rhat said Managers have under
taken TO enlarge their oper ations beyond the
purposes contem plated their trust Oeas-
ing other railroads, ETC., ) thereby incurring
large losses that said managers well knew
that such large losses would result in the
first instance, but pretend that they will
be repaired in the future which manage
ment lis not consistent with a prudent apd
economical administration of their trust
F0urth.-Thst prior to February, 1867,
the Vi. Central Railroad Company made a
certain claim against the Vt. & Canada K
R Co., for the sum of S32 ,673. Is, which
claim was disallowed by the special m masters
appointed to state and report the accounts :;
that this Tact was known to j. Gregory
Smith, Joseph Clark and w. c. Smith; that
said report was confirmed by the Court OF
Cbancery; that said Smith and Clark con
federated with each other and certain other
persons then directors of the Vt. & Cduada
R. K. for the purp ise OF increasing the cap
ital stock Of said Railroad wi h the pre.ence
of providing Tor the payment of said claim
to the Central, aud having procured the L.
sue OF 327 shares of capital stock for said
pretended purpose, caused it to be issued to
tbemselv, s-J. Gregory Smith receiving 100
shares, Joseph Clark % shares, w. c.
Smith so shares. and l.. B. Peck (then
President of the Vt. & Canada) II sh~ res
that the Vt. Central r. R. Co. then became
liable to pay, and have ever since paid for
the private and personal benefit of said Trus-
tees, the annual SUN at per ceutum upon
said shares; that said Trustees have also re-
ceived the benefit of stock dividend of A
per centum upon he par value of said shares
aud that the VT. Central received NOTHING
from such transaction, but became liable tt
the VI. & Canada tor rad sum of 49,. 673
10, and have hitherto paid annual rent o
per cent. On the same
Si1th That IN OI der to obtain the leas,
and control of the Og ensburgn & Lax.
Cbau PLAN r. R., latter the D. & l.. & r
K. Co, bad been advised by their lesa
council that such contract or lease was be
yopd the righiful exercise OF the powers con
ierred upon them by their char er and tn,
laws OF the State of New York; the saic
managers enter ed into a corrupt bargain will
the attorney of said road whereby he shoulc
receive $25, 900 IN consideration of bis inhu.
ence to bring the negotiations for the lease
Of said road to success al termination, anC
said sum was paid as Aforesaid.
Seventh -Thst said Trustees, or some o.
them. have been wanting ID due regard foI
the prudent and economical mar agemept OF
said roads; have used the trust properly and
their fhces to make leases Tor other roads
til, us. vi which has resulted in large loss, e,
Tor The Iurpose OF d,vert.ng business over
other ioads owned or LEASED by some of them