The daily Argus. (Rock Island, Ill.) 1873-1877, 1875-06-19
Opinion of Judge Drummond on the
Priority of the Mortgage Bonds Of
the Rockford, Rock Island and
St. Louis RAILROAD.
From the Inter-Ocean. 18Th.

AS already announced, Judge Drum
mond decided, yesterday, the questions be-
fore him on the exceptions to the masters
report in the important case, the Union
Trust Company of New York. against the
Rockford, Rock Island and St. Louis Rail
road Company The main questions for
decision were as to priority of the first
mortgage bondholders, and as to what pro
portion of the road was covered by the
first mortgage. The opinion was very
lengthy, but the following abstract, dictat-
ed by the learned Judge, covers the ground
discussed him. Judge Drummond over
ruled the most of the objections made to
the masters report, and held
/. That the mortgage of June, 1868,
was security for the first issue of bonds
from No. ! to 5000 of 81 900 each. on all
the road north of point on the main line,
as it was ultimately constructed, due east
from Burlington, including the line con-
structed by the defendant or constructed
by other companies and purchased or
| leased or run under contract by the defen-
dant with such companies, as well as all
branch and connecting roads, and that this
mortgage constituted lien on the proper
| ty for the payment of the said bonds
This covered that portion of the road
obtained from the Orion and Minersville
Railroad Company, and used by the defen-
dant, as we'll as part of the line or branches
used by the defendant in whole or in part,
but constructed by the Northwestern Rail
way Company or the Rock Island and Paci-
fic Railroad Company.
| As to the Sagetown and keithsburg
Railroad, the court said there might be
some doubt whether it was included within
the terms of the June and October mort
cages, but the language was as strong in
the first as in the second mortgage to
show the intention to include the road.
2. The court held that the mortgage of
of all the bonds issued, including those
struction ofthe southern part of the road,
altogether 5000 bonds. The last mort
gage covering the first issue as we'll as the
second issue of bonds, and therefore that
the bondholders under the first mortgage
had double security, being the first and
second mortgage. The first was special al
to themselves and the second special as tc
themselves and the bondholders under the
second mortgage.
g. The court held that as there had
been partial payment TO some of the
bondholders under contracts made after
the date OF the mortgages, by which it was
proposed that all the bonds issued should
be scaled down so as to make the sum tota
of the Indebtedness much less than the
original amount; that as those contracts
had never been completely carried out by
the consent of all the bondholders, and al
some of them had received small portion
of their debt, that those who did not con
sent to such deduction on their bonds, anc
which circumstance prevented the consum
nation Of the contracts, should be in nc
worse position as to their claim upon the
assets of the defendant than those who had
been partially paid. That where an in
debtedness of the company had been paiC
in the usual course of business, or by suit
that circumstance did not prevent the par
ties obtaining such payment, if they haC
other claims against the company, from
standing upon an equality with othel
creditors in the same position as them
selves.