The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-09-30
THE NEW JERSEY CENTRAL
PETITION FOR AN INJUNCTION
AND a RECETyER

the company Alleged to be Insolvcnt-Ac-
cusnttons Against the Umcers- Chancellor
Runyou Refuses to Grant the Petition.
In Trenton. before Chancellor Runyon,
on Thursday last, bill was nled d. claring the
Central Railroad Company Of New Jersey to be
msolvent 1t further petitioned for the ap-
pointment Of a receiver Of all property aud
assets OF the company, and for an injunction re-
straning the conte nplaied issue OF S50O0.0OO Of
additional mortgage bonds. The petitioner
urges that by its charter the company. In endors-
ing the paper of the Lehigh and wilkesharre
Coal Company, has exceeded lite powers.
The petitioner Is Obed n. Sanderson Of Jersey
City,. holder Of ten shares of Jersey Central
stock. In view of the importance OF the case,
the Chancellor refused to take action In IL until
the railroad company had been Informed what
was fixing pl ce, ana a hearing granted them.
| The case was therefore postponed until yester-
day, when a he airing was had at the Chancellor's
Chambers 10 Newark.
Tho petition for relief sets forth that on
Feb. 20, 1s4T. by an act Of the New Jersey Leeis-
lature, the scmerville and Easton Railroad
| Company was incorporated, with the power Of
| purchasing, holding, and ENJOYING any lands,
| tenements, goods and chattels whatsoever neces-
| saty or expedient for the objects Of the cor
poration. That on Feb. %, 1si9. this company
purchased the Eizabetown aud somerviIe Rail-
ROAD, and tbenceforth became known as tho
Central Railroad Company OF New Jersey. That
| In March. 1874, II was made lawful by the Legis-
| lature Of the State OF New Jersey for this COM
pany, the majority Of the stockholders consent
| ing, to guarantee the payment OF the bonds Of
any coal company or companies owning or work
ing coal lands along the line OF or adjoining
| to any OF the branches or works IN the
State Of PENNSYLVANIA, held by lease by the said
| cOuptnv. That the President and directors
| of said company hive for a long time past been
using the funds and pledging the assets Of tho
company, for purposes and uses foreign to
| those contemplated by the act OF It's iucorpora-
uon and its supplements. That they have en-
gagged. ana still continue to engage, and will
continue To engsge said company IN the mining
aud selling Of cuul and other Enterprises, and
| have purchased and now hold stock IN and
! and all this without any warrant of law
aud 10 the injury Of the sto- kneldcrs OF the
! sntd corporation. That the said resident aud
| director, have. without warrant OF law. Gwen
the endorse nent or guarantee OF SAT- company
| to about S2,COuu0O uf the floating debt OF
foreign COOPERATION, called the Lehisn aud
| Wiikesbarr- Coal Con pany, and have loaned
| large amounts of the bonds u said last nan ed
| company, owned by the Central Railroad Com
! rauy ~ New Jersey, rs collateral security for
other portions OF such floating debt, which
amounts ia the whole - upward OF co.
| $4,000. That It Is the purpose Of the Presl-
| dent and directors to ssue the bonds
Of said company ana TO dispose thereof.
said floating debt Of the said foreign corpora
| tiou or souie pant thereof. aud tn secure said
II the Central Railroad Company Of New jersey,
and b, the hypot hecatiOn " the stock which II
owns In various other corporations. That the
| said resident and directors are now ondeaVor-
tng TO merket and dispose of said bonds Tor the
purpose aforesaid. anu that said corporation
has no power TO borrow money fJr such
purpOss; That tney have caused tue
| central Railroad Company 20 guarantee
the mortgage bonds Of the LehiGh ana wilAes-
barre Coal Company to tue extent OF Sl5.U.0.-
to pay the Interest on its bonded debt from ITS
net carnt -. End ~. in fact. insOlvent That the
| course OF the President and directors. IN enghg-
| ing the central Railroad Company IN enterprises
| foreign to the OBJECTS OF Its incorporation, has
been ircatIy TO tue MARY 81 the stocAholiers
| thereof, and has increased the nOnued deht OF
| sad company from about $l.jDO.OuO to $2j.OVU.-
VOO; besides causing large floating deot, and
| tue assumption uy said company Of the deUt Of
| other corporations.
That the E rninRs OF the said Central Railroad
| Company OF New Jersey above its operating ex-
| penscs are insufficient to pay the interest u on
it bonded Debt md upon tue debts Of other
corporations for which 1t mas become liable, aud
that said company has no available a sets FRO a.
which I, can ray its Own past due debts or the
| come hAOie, and tue SAID COMPANY las Ia fact
| OecOme n-oivrnt.
Tue petitioner prayed tARt as the COMPANY
| luu become in~ulNcut.A Receiver might ue az
lointed and that It's onicvr- nj M Toe euJoined
| from negotiating thc new sJVou,OOO NOR, aage,
| and from further engaging IA ny eAternrse
toreisn 10 tue objects of Il. ucuipOI4tiOn.
The hearing in Chancellor kunN on's Chambers
ye tet0hN afternoon was a LONG Due. l. was
| conducted luvatcN M the presence u the
Chancellor and the ATTORNEYS . Fl her
eide. lac ilpDrtauce II tno Stake 4 as le
was shown ~ the Appearance, Oh the part Of
he defence. OF eN-tnunceilor iIlamsOn Of
| lilLlbeth, a director OF tue road. hr. Thomas
| y. Aot after II Newark, aud Air. Abram Brown
ing OF { mden. lie otnrr side wac represented
| by Mr. Collins OF Collins a CDroin. ) Jersey Iity.
ihe defence maintained that lat from being
untt lie To paN the interest on It's deUs, tue road
in a. gOOd "a condition to 90 30 To-Day
a. IL ever was, aud perfectly solvent. Nr
| RunyOn was called ny to consider
the disastrous effect which his granting
| OF this petition must have upon the vast
and the injustice that must ne done the other
Stockholders, merely TO gratty the wln Of the
| comparatively Insignificant holder OF ten shares.
| lucy argued that all of the trans sctiODs meu-
| toned In the com laiut were PERFECTLY iegiti.
mate, FREQ from asuspicion OF fraud, ana confined
| strictly within TIE charter limits VI the corpora
| ton.
Mr.. Collins urged that the road was not sol
| vent. and that should the application enJoning
| the company from issuing the new m urtgage Oe
| refused, ~ would only be prolonging the sus-
| pense Nth which the Enal and Unavoidable
| or sh Is awaited. lie also maintained, AS the
Lee lgh and Nhkesb IRE Coat Company was
u S5,UOU,UUO Wus ia real " only stealing 50 mucn
money from the stockholders Of tue New Jer-
sly Central ana thtO WING " away.
| After long and Exhaustive arguments on
either side, the Cnancel or briefly summarized
| tie c-se and saying that lie was fully conscious
| Of the imp 1rtance Of immediate action on the
| part Of the Court In case Of this matter. pro
grant tue petition on. the ground tlat The allie
cations Of the complaint were not accom- .anied
| with proof suincisnt to convince him that the
Central Railroad COMPANY were exceeding the
powers vested In them y tueir charter.