New-York tribune., 1876-08-21
THE COURTS.
RAPID TRAESIT'S EARLY OBSTACLES.
yogMgg FINANCIAL DIFFICULTIES or The ELEVATED
RAILROAD COMPANY.

RAPID TRAESIT'S EARLY OBSTACLES.
YoRMER FINANCIAL DIFFICULTIES or TIE ELEVATED
RAILROAD COMPANY.
The suit of Frederick p. James against tho
New York Elevated Railroad Company and James A.
Cowing has heen decided by Judge Laemore In favorm
the Elevated Railway Company, but against Mr. Cowrs e
This suit though not attacking the franchise OF the fe-
waited road assed the right OF the present company to
that franchise IL his long opinion judge Larrenoro
states tnat the plaintiff hed $4,000 in bonds secured by
a r,t morg, 20 of the westsde Elevated Railroad Ccm
pany-te o. ginal rapid transit rOador ali It's road mp
TO Thrteth-st The Gboe amount Of this mortgage was
s75O00O Under this mortgage IN case OF fofocioSlre
sale the stees 20 purchase the premises ior 'he
use ana benefit o. the bondhoders, upon the Written re
quest Of a majority OF thom On such puf has' iho rght
and title TO tie premises were TO yos in the trustees fhu
no Dondholder was tO have any claim to the premises OF
The proceeds there; except for his PRO rata faro o te
proceeds as rcpresanted in $ neY company OF corpoTa
n TO be formed for tie use and benIh OF the bondho'd
ers The trustees gI'en pOwer to form sdjh ne"
CORPORATION the majority o; Dondh0Ideis,lh WI NJ
should dc clare tor and to recOnrcy TIE proper 20 siS
corporation when formed.
This mortgage was dated Aug /, 1868 The old COZ
pany embarrassed, TWO Judgments OF thf egse-
gate amount OF S2l 500 obtained aalDst H. thc
under them the property OF the company, or at cst
such rights as were eft 20 IT, Jan. u, ISL Wefo Oa
ont y the sheriR fer %, and fell Hto Tbs hands ~
the present company. Tna old company made s. cohd
mortgage OF its road including, in addition - th3 read
below ThIrtiethst its rights tc sixtietist rs mort
% ge had only days TO rGn and was proOhD III Hd
of the judgments mentioned ~ fore r,1seC, ana
the New-York Elcyatel Railroad Company WAS the
purchaser.
In the mean tlro Nr. Cawing trustee began fore
closure suit under the arsrnOctgage, and ac the SAFE
ha, ing been buv In the moriga property
bid Tor it S75OOCO and received the decd for IT,
trustee he acknowledged the receipt OF $7I5ls 81 te
net proceeds OF The sale. This in October ls'i'
Ge under tie foreclosure OF the second mortgage
vas not until the following December
In November, 1871 Mr. CoWinc sent circular to tbe
bondholders under the lst mortgage which the Court
holds reached tho planb inviting suggestions for tbe
disposition Of the property majority oL the bend
holders asseuted TO scheme under which sale was
made OF their ri;s 30 the Newyorf Elevated Railroad
neI s,s gave a Gig Gcrd each $5c0bOnd Of SOB 62.
Iae b0nGholdcrs allowed 10 tax" STOCK In riace Of
this dividend with certain prlFic@es ih pldl,n ~
fused 10 become party To this arfaigeI a' scu W
set aside this sae t % have the prOpS ty IN te
hands Of WHOM evec It might have coue saLJec 10 INC
Ieu rf tn b1nGhOld5r7.
Judge Larren;ore iuds that the purchase by tie Ee-
yatcC RaSay Company so far ~ they "c'e cV'e'le,,
vas absolute ard valid. They had acqufed Dy 0Iher
purchases IN absolute title 80 al the ioad norh o. ih
tetst, elh title TO .ho part OF me road south ci aV
street ciy suDcct tine lien " the hrSt mortgage,
which WAS force osGd IN tbe apsere OF lraud Ok cou %
held title under the OreC!osure was Vd, alr e heie
gnaluC3s Of tbs under hll tlr evidence
court Judge Ia'renoro sad BE- could not declare 10 ce
PROOF Of maui 49,. ,..-
As 10 the question between THE pi2int and Mr. Cowing,
tho matter was different. l. not necessary 10 I'M
pUte bad faJh to Nh COwjrg but ~ trustee n receipt
compensation tor his services fe Was SOhu to es
c,sa ordinary diligence in the management O cue IuS
prnIrrty Thou h not responsible fol loss Nnle act ~
IN good faith and without fraud, he was never ls
personally liable fGT breach or neglect or duty As tLc
plainif moreover, rrfGstd to acknowledge me com
uaiv defendant as the corporation contemplated " me
must deed Judge ] Jsrrcmore holds ne was not coa-
,Iied by tire sale ami conveyance Of the corporate
pIuparty on Jan. >, 1872. Such a dhed Should
have had the consent OF ali tho ccStut qus irUst
or have been clearly arth rized by the UorlgaSo.
The trsi deed did not Authorize or contemplate sucn
sale aud in such IL was Indispensable that the
trustee shoulG have sought the AID and direction vi lio
Court. without any saihg necessity nc assumed re-
sguHsibity IN direct violation %, becau9e rot author
i2a y, cue trts ai Therefore liable To maize s0od
the sustained. judgment is tLe4erof1 rch"oIeu ID
favor Of the NcwIOi Elevated Railroad company iOl
dismissal of tG0 complaint aud IA favor o' tno pint1s
against the defendant, CDYinS individually ana as LiGs-
tee for The p!o sEPrc dividend or the sj sht OF
-,I jl3 ULe tptl payment 10 COEiLg az irstee on
,ac .ait D. uuon lbe - bonds he'd BY him, town,
lie su Ji ~2Z,G3J - and interest That payasnt OF
SAID suu he luado oS ,a.d trust funds, OF IL deiaut
tlcrcof by said defendant, COwinS, personally.