The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1875-07-15
Gle 3utlantl daily Glubr.
THURSDAY, JULY 10. 1875.
81. Adams Messenger.
IMPORTANT RAILROAD HEARING.

central Under tho Second Mortgage-An
Amusing Blunder by Judge Poland-Pointed
Statements by Messrs. Davenport and
Brooks-Deoision Reserved.
The adjourned hearing upon the petit
tons of the Central Vt. r. r. Co. to en-
force the consolidation of all the interests
and the petition of the second mortgage
bondholders TO sell the VT. Central II, Il.
came on for hearing before Judge Royce
Tuesday.
Mr.. Fiield called up the petition of the
second mortgage trustees, and upon re-
quest suspended the consideration of that
matter, to permit the fling of petition by
Mr. Stafford in behalf of the holders of a
half million of bonds of the Vt. Central
X. Il. Co., for leave to file an independent
bill, seeking to enforce an adjudication Of
the compromise of 1866, fixing their rights.
The hearing then proceeded. Mr.. FL
field, in behalf of the second mortgage
trustees did not come to the Court for the
right to sell, that they acquired under the
mortgage, two thirds of the holders of the
second mortgage bonds having asked for it,
but they desired to avoid all questions, and
asked the leave of the court to make the
sale.
Col. Walker filed an answer Directing to
the sale, and argued briefly that the court
could not order the sale, that the proceed
ing was improper, that the court ought not
to order sale of the property until the
liens had been determined Who could
buy property encountered, no one knew
how much? The receivers ought not to be
permitted to purchase property which had
been entrusted to them.
Ex-Judge Prout appeared for the Rut-
land road as creditor of the trust and OBJ
jected to the petition and argued that the
sale should not take place.
Judge Poland, in behalf of the scheme,
argued, that the holders of the bonds had
decided upon this course, and that 1t was
the best way the property could be admin
istered that the rights Of their mortgages
still existed that the chancellor could tell
what liens were on the property; that the
property would not be benefited by spend
ing years to find out the exact amount due
on prior liens. Then be said the Central
vt. was created to combine all the inter-
ests, and in his opinion this was the way
to carry forward the legislative scheme of
consolidation. The receiver ought not to
be allowed to purchase for itself, for its
own benefit, but here the Central VT. ask
to purchase of the property for the benefit
of the benefcarics under the trust. This
point is not apparent from the petition, and
had never before been suggested in the ar
gument -ED.
Mr.. Davenport of Brattleboro, appeared
for I'd mortgage bondholders who had not
come into the arrangement, said he under
stood that the other side had conceded that
unless the prior liens were determined the
sale ought not to take place. How can
persons who may desire to purchase this
property know what to pay Tor it? There
are persons who think it is not in the pow
- 80 l. -:-i--.-. in,nair the
oblIg itiOns of a contract and 1t is yet an
open question whether it is competent for
the court to put encumbranccs upon the
Vt. Central Railroad. This is serious
question and I'd mortgage bond holders are
now preparing to test the validity of these
pretended liens.
But grant that the liens do exist-for
many years the receivers have not render
ed their accounts and it is believed that
they owe millions. If the receivers are
bound to account for money made by their
speculations, then the ID mortgage is more
valuable; whether they shall account will
have to be determined by the masters al
ready appointed. The - mortgage bond
holders are entitled to know Just what the
property is worth the masters are about to
come and examine the accounts. What,
then, is the emergency that demands to
have this determined now? Before the sale
the exact standing of the property should
be determined.
The court then took recess until after
noon.
AFTERNOON.
Mr.. Brooks stated that lie had not in
tended to take any part in the second mort
gage petition, but inasmuch as some points
had not been presented, lie would take a
little time in stating them. At the former
hearing, when there were two petitions filed
the one for consolidation and the other toI
the sale, they had expected that the con
solidation petition was the prominent one
he wished to state that the persons who act
ed as committee of the bondholders were
retained by those who desired to carry ou
the consolidation scheme. This Gov
Smith denied and said that he had furnished
the money TO pay expenses of the. com
mittee. and that they were not retained
Upon further question the Governor said
that Mr.. Emery expected pay for his SER
| NlCtc. TIbii tillS MT. llOths u1gutu tnt
the apparently favorable approval of the
bondholders was not the act Of the bond
holders, but of persons employed by the
| Central Vermont to carry out the scheme.
| This "a mortgage petition is q part of the
same scheme; the other petition not having
| life enough to sustain itself through the
adjournment, the trustees ask for leave to
sell out, to betray the trust. No one pre-
tends that if the trust debts are lien upon
the property there is anything left for the
bondholdere for this reason it is all inn
portant to them that they should not be sold
out while this question is unsettled. This
sale is evidently not to protect the benefic-
iarics under the mortgage, but to cut them
off. The effect of granting this prayer is
to attempt to deprive the % mortgage bond
holders of their right to hold their trustees
to account for their stewardship.
There was bill of complaint filed bv the
trustees of the LIST and I'd mortgage in 1866,
| in this court, among other things setting
forth that in their present involved condi.
ton the relief prayed for in that bill would
be better than any other legal process; and
all the bond-holders acceded to this by
giving up their coupon and taking new
bonds On this bill decree was rendered
and this decree was at present subsisting,
merging the other rights under the mort
gage. 1t is claimed that W. c. Smith,
one of the trustees under this ID mortgage,
had made profits out of the property by
virtue OF his Office it was attempted by this
sale to cut Off that claim. Mr.. Brooks
further stated that the bill for which leave
had been asked to file, was based upon the
theory that this decree was still subsistni
and afforded full relief.
Col. Walker, in reply TO Judge POLAND
that the court knew that the leins were Sc
quiet as to absorb the whole value of tn,
second mortgage, said how does the cour
know about it? Nothing, outside the pc
tition. The petition says the leins are
claimed to be upon the property; so 1t Il
claimed as appears upon the record tina
they are not leins upon the property, ant
he argued that on Judge Poland's own ar
gument the petition should be dismissed