The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1876-04-07
a- = n {, 1lIIAll.flLRoAD COMPANx.
IMPORTANT sVEsTIoNs.

a.. 81. s III ~ Y = & $50 - :
1s1poRTANl!T QUESTIONS:
The foliswfug comnnnicatlon originate
some very impd rsant auestions which merit
the attention OF all parties TO thae tangled
skein the corporate existence Of the Altar
tic, Miss.ssippi and Ohio Railroad Company:
The A., d. q o. $4,000 900 MortxaEos
The bills fled in the Circuit Courts OF the
rrn;sed states ut Richmond and Lsnchburg
charge that the Atlantic, Mississippi ana
Ohio Raiiroad Company had educ authority
of law to execute q mort gage on its said line
~ railroad property and franchises for the
snm Of a15. 600 900 to secure the bonds OF the
said company, to be issned, negotlsteu, anu
sold for the purpose OF raising no.ey ,os
Tho nae and benefit OF said company and
.hst ON the 9th day of September, 49,, It
Ala arecnte and deliver to the plaintiffs, as
trns,ass q deed Of trust and mortgage upon
its franchises and line OF railway cons.iuo'-
ed aud to be constructed, DC:
Az the bill seeks the appointment OF re-
coiyer for the entire line of railroad from
Norfolt to Bristol, and the sale OF the road;
froncisss &c. it becomes q question OF I'M.
nortance TO ascertaiB what Is the extent ana
effect of the deed OF trust ana mortgage
,b;ch was executed. BY, the charter OF
the eco compaDy-Acts 1859 ITO, page 1Sl--the
organization of the company was autnolizsu
whenever ga majority ct the STOCK, as 70
shares, held in the Norfolk and petersburg,
Southside. Virginia and Tennessee, ana var,
ginia and Kentucky railroads, or that nelo
In a majority of the said companies by otners
than the State" was subscribed to Inc capi,
tai of the proposed company. The satd
company, by section Z, was authorized 10
arrange with the four companies napeo,
q by lease or otherwise, for the use OF Inc
franchise and property OF. the same upon
such terms as may be agreed upon
by their stockholders acting 10 any
general meeting";; and by section .
The new company was authorized to repre-:
sent id all meetings Of the stockholders of
the old compapies-so long as they existed
as distinct organizations-all hestock there:
of that had been subscribed to the capital
stock of the new company, Section pro;
yides for the sale of the States stock IN the
old companies to the new company, and for
its representation by the said company in all
meetings of the stockholders of the old com
panies; and section 10 provides for second
mortgage to secure to the State its own
bonds to. the extent OF four millions, the
price at which its stock vas to be sold, SUI
bordiDate to first mortgage, not to- exceed
the sum of fifteen millions of dollars.
By section 10 it was provided, ''That
it shall be lawful for the said At
lautc, Mississippi and Ohio Railroad Com.
pany to issue bonds, or other evidences OF
debt, at rate Of interest not exceeding the
maximum prescribed by law, and to secure
the payment of principal and interest by
mortgage or otherwise. This provision.
with the restriction contained in section 10.
contains all provisions for the first or sl5,-
600, 900 mortgage. The charter provides for
the continuation of each of the old compa-
mics as long as there remain any stock therein
not subscribed to the new company, and
does not vest the latter with "the rights OF
franchise and of property" Of the old com.
panies respectively until all of the stock
therein shall be absorbed by the new COM
pauy. So that until the stock of said old
companies was absorbed the new COM
pany was to be merely stock
holder therein to- the extent of the
stock subscribed to its capital stock, or
sold to it by the State. The whole Of the
stock in neither of the old companies, 1t is
believed, has been absorbed, except, perhaps,
in. the Virginia and Kentucky Railroad
Company, which is mere myth. Certainly
all of the stock in the Virginia and Tennes-
see Railroad Company has not been absorbed,
for there, is landing in the hands OF indi-
yiduals over $4,000 of the stock of that
ompapy guaranteed by the city Of Lynch
burg, and considerable amount besides
which is not guaranteed; andfa question
nay arise whether the city Of Lyncbburg is
not still the owner of over four hundred
thousand dollars of stock In the said COM
papy, which was subscribed tothe new COM
pany after its organization by atVote OF the
Council without su Emitting the question to
the popular vote, 80 provided for by section
II of the charter of the latter company and
the general provision in the Code. So that
the new company is still but mere stock.
holder in the old companies, or, at any rate,
in the Virginia and Tennessee Company, and
any mortgage or deed Of trust given by IL
can only bind its stock in said companies
and any property it may own in it's own
right. Neither has the new company ever
legally acquired the right to the use Of the
franchises and property of the old compa-
pies by lease or otherwise, as provided for
by sectien Of its charter, for, since the
joint meeting Of those companies pre-
Iiminary to the organization Of the new
company, there has been no general meeting
of the stockholders of either OF the said
companies, and hence no lease or other
agreement for the use Of their franchises or
property has been sanctioned by them. The
fact is that the franchises and property OF the
said companies have been used by the new
company without authority of law because
it happened to be the largest stockholder in
each Of them. Indeed. 50 little regard has
been paid to the provisions Of the charter, OF
the new company that the amendment al,
thorizing the extension Of the term of Office
of the president and directors to five years,
provided that amendment was accepted by
the stockholders at their nert annual meet.
ina, has never been submitted to the decision
of the stockholders at any annual meeting,
but was submitted to. and adopted by spe.
cial meeting called soon after the passage of
the amendment. All of the, foregoing facts
can be verified by the examination OF the
records OIL, the company.
Now, the question arises, What should be
done by the court in the premises : There
can be DO sale, under the mortgage of Sep;
tember, 1871" Of the franchises, road-beda,
&C., of the whole road, but only Of the stock
of the new company in the several old COM.
paDies, and of is personal property; and
then there is large account to settle be,
tween the new company and the old ones.
1t is submitted whether ia this state of
things 1t is not proper that the old COM
panies should be made, parties TO the pro.
ceedings. and q receiver appointed Tor
each one of them, SO that the re-
ceipts of each shalt be applied drst
to the liquidation of its own debt; and, II a