The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1876-06-05
only hope OF the plaintiffs TO realize any
thing Is by running the road under the di-


only hope ,of, the plaintiffs 10 realize any
thing Is by running the road under the di-
rection of the court. s ysr.si 4 az -
This company is q quasi public corpora
4 tion, bound to the performance OF certain
| public duties in consideration of its fran
chise; and Justice to both the public and the
creditors requires that its physical con dition
should be kept UP and preserved. A. rail-
road soon becomes bad, goes to decay, and
becomes useless, when its credit has depart
ed, and seasonable repairs cannot be made.
LEGAL AND EQUITABLE RIGHTS "@
1t is sometimes thought and said that the
legal and equitable rights OF plaintiffs under
railroad mortgages are in some sense differ
ent from those acquired under other mort
gage. The authorities, thought Mr.. McF ar
land, prove the contrary, and that they are
all alike. Mr.. Mcfarland referred to- and
commented on cases reported in Wallace,
268, and Gray, 1872, and proceeding, said
No man can complain OF our enforcing our
rights. All the world had notice of our
conveyance and Of its covenants. Every
supplyman, every laborer, every lender OF
money knew that his remedy against the
company was dependent upon its faithful
performance of.its covenant with us. =,
Mr.. Mcfarland called the special atten-
tion Of the Court to the granting clause OF
the deed, which he read, to show that one
thing specially mortgaged was the tolls, in
come, rents, and profits, es nomine, granted
to the trustees.
From the day OF first default, two years
ago, these tolls, income, rents, and profits
have been the property OF these plaintiffs in
the possession and use OF other people, and
this court Of equity will not hesitate to re-
quire them to be surrendered to us.
AIsDIRECTED CASH.
The answer states that the present float
ing debt Of the company is about 5000, 900 !;
on the 18th Of February General Malone
said it was s1,076,355. 1t appears, then,
that about 100000 Of the income OF the
company has been misappropriated to pay
ment OF the floating debt, when it should
have been paid to them for interest. The
rents and profits being mortgaged, and the
company being in default, the Court must
appoint 4 receiver to collect them, andapply
them properly.
Mr.. Mcfarland read from Hyde on Re-
ceivers, section 6G6, as authority to show that
when the security has become insufficient,
no matter how or why, and the income Is
insufficient to pay expenses and interest," the
court must take possession. He said that
this corporation is not only insoyent but
destitute; it does not pretend to have any
other property besides the mortgaged pre-
misses, and that is inadequate.
Mr.. Mcfarland read other authorities to
show that when rents and profits are spe-
cially mortgaged it is not neceSsaryto prove
| insufficiency and insolvency-among them
case in New York, and The State of Ma
ryland rS. The Northern Central Railway
Company, Is Maryland Reports, 1913.
RENTS AND PROFITS.
This last case was one in which rents and
profits were not specially mortgaSed.
Nevertheless, it appearing that the company
was in financial distress, and that its rcYe-
nue. was diverted from elder to junior liens
in violation Of duty, the Court interfered
! by injunction and receiver.
The plea Of necessity proved the pres
sure;. and the necessity OF misapplyinS
funds to support credit and carry on opera
tions of the road furnished u still stronger
reason why the Court should interfere. Mr..
Mcfarland referred to Hyde on Receivers
| (page y to show that the inadequacy or
insufficiency Of the security spoken OF by
the courts referred to the particular mort
gage in question in the suit. and said, here
I the junior mortgages may we'll be content.
|
ture Of our money on the property. II the
company can now repudiatc the tiye and a
half millions it owes us, can either by
hook or by crook get away from paying us
our money which is planted on their road
to the enhancement OF the security OF the
first liens, the holders Of those liens may
doubtless be well satisfied; but we will be
| bad off.
THE QUESTION OF MIsMANAGEMENT. -.
The questions of fraud and mismanage-
ment were, Mr.. Mcfarland contended, IT.
relevant at this stage Of the case, and nave
nothing to do with the present motion. The
decay OF the property and the income, Whe-
ther wasted or not, show that there Is llnnl-
nent danger to the fund and our estate. The
perilous condition Of the plaintiffs Is plain.
| The cause is immaterial. This company may
have been afflicted with rs many plaques as
bcsct the subjects Of stiff-necked Pharaoh
but these plaques will be no bar to our right
of action, The company's calamities will
not diminish the plaintiffs equities. The
greater its embarrasSments the greater our
necessities.
Mr.. Mcfarland said he was nearly done,
and would make few remarks upon the
duties of trustees under railroad mortgages.
The bonds were sold to all sorts OF men
mostly to those who wished investments for
income for means OF support, and who
looked to their semi-annual interest as thelT
sole means Of support.
JOINT INTEREST.
People thus situated, having several rights
but>a Joint interest in the mortgaged sub
ject, especially i'll foreign countries, have q
precarious property. They are helpless
multitude whose sole reliance is upon the
honor and good faith OF the debtor com.
pany, and Of the trustees, and Of the
courts in foreign country. II the bene.
ticiaries in Europe should see some OF
the Virginia newspapers they might think
that this attempt to collect their money
was an assault upon the peace and dignity
of the Commonwealth, and q thing to be
discouraged. In the defendants answer we
are called "discontents "a good word to
describe us. We are not much to blame fol
not being entirely contented-for wishing,
in view of the financial condition OF thl:
company and the rapidity Of its going into
the jaws Of bankruptcy, to do something to
save part Of the S5,47O,OOO.
Judge RObertson's Reply.
Judge Robertson, OF counsel for the rail
road company, i'll responding to Dir. McFar.
land reviewed the history Of consolidation
showed how General Malone found the
roads after the war, and in what condition
they were when the panic came on. He de-
scribed the contract made with the English
capitalists, aud stated that Collinson took
the bonds at 6S cents in the dollar, and that
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