The sun. [volume] (New York [N.Y.]) 1833-1916, 1877-11-25
MolIENRY FIGHTING JEWETT
SUING To SECURE HIs i.EWOvdL FROM
THE RECEfyERSHIP or ERIE

Also that the Farincrs' Loan md Trust COM
pnny shall Not he the Trustees Progress
of the New Plan of Reorganization.
James McHenry struck his first legal blow
Mt Receiver Jewett and tho English plan for
rcorganizing Erie yesterday by insttutng n
suit to secure tho removal OF Mr.. Jcwct. and
tho appointment OF n new Board OF Trustees In
place OF the Farmers Loan and Trust Company.
Joined with Mr.. McHcnry are John II. Brown
and Charles Frederic Evans. tho three plain
tfs holding bonds to the amount OF t9l 900
under the first consolidated mortgage.
Tho complaint sets forth that the annual in
tcrcst on bonds under this mortgage is
81. 100000. and. Notwithstanding the exccp-
tonally low transportation charges. which. to-
ecthcr with the incompetent and extravagant
management Of said railway. have occasloncd
grcatly diminished receipts and net income.
these plaintiffs believe and aver that the rove
nuo Of the mortgngcd property since tho de-
fault In payment Of interest. II il had been lcgit-
imntey applied according TO the trusts Of tho
rortgnge, and If the said railway hnd been
honestly managed and administered. hna been
ample TO- pay all expenses. incluliny interest
upon prior mortgngo-. But the said railway
and all ia affairs have been wast"lully and cor
rupty mismnungcd. and IT, in -onle and enru-
ines ~ ,snprlioi gni wasted by the person hp-
The Farmers loan md Trust Company, It Ia
alleged. trustee. bound tn TfufNrf the
interests Of all th" bondhold"rs. but. although
the said company WIS iully advised ~ the sue
ccs-ivo interest defaults. the m,sHppli niOn pf
revenue. and the misfnnnngcm"nt 81 the rail-
way. u has been wholly unmnifu of lis duty.
ana has permitted the misnpplicntiou of the
pledged Income of the r1nd t0 the amount of
several million dollars md has not int riorod
!" prevent ~" W. -lcnnd acknowledgement oi the
corpornt. property"
oud MORTGAGE bond loders hnVe combined with
Nr y 'WNt - co'r'' ~" r'siiue oi th"ir co.
boudholdcrs into assent to what they designate
= s,'hrmr oi rtorsamN,tion Of the said Erie
Railway Company: TINT one Of the principal
conditions oi such urop.srd reconsirur'ion
under the first consolidated mortgage bonds.
which have been held by these plaintiffs for
forty yours. And such schemes are i'm other
respects wrong. unfnir and Oppressive to the
ylaintils ana the other first mortgage bond
Tho Farmers Toan and Trust Company
has entered into such combination. and is add
ing and ah"ttins the pnr'ios engaged in 81 n
Dlnn. ana in pursuance ~ this plan. the sNil
parties hnvc procured various orders of court
In particular an order direct nG the receiver a.
pay ii" interest or coupons upon tho hon!s ol
un'y such holders rs would assent to tn" plan
of reorganization. Sufn orders were obtained
with tho know 'dgr nui ns-'ut of th" Farmers
/ duty as tru-ine for nlltie bonds secured hy the
first consolidated mortgage. ant were obtained
from mo court cN pate. The sai J.w' II
has diverted the revenues uf the railway
company from 'h"ir lawful purpose. 10 pay iho
/ cNp"nsrs ~ carrying ont this s'hcmn, 70 which
Loan and Trust Company has advertised itself
/ aa the agent II curry cut such h"nbr-4. re"on-
s'rnii9n IN hostility 10 thc Interests OF ihe
| llaintiiiS. For thesn, and other r"nsons, the
| Farmers Lnnn and Trust Company Is wholly
| unit 10 protect the interests Of the plaintiffs and
| other hondholdcrs, or 10 have any charge over
| the railway property Ii has violated its duty
h. trustee. l. hostile to the plaintiffs, and its
| action has boon preindirial To- their interests"
| The plaintiffs ask that the Farmers Loan and
! Trust Company hc cnloincd from any proceed
ings 10 forerlosc the first consolidated mort
hon. lla..l.l
! TO any plan Of organization. and that new re-
| cever bc appointed under order of the court.
The complaint Is TO be iiled In Monroe county
Mr.. Jewett said last evening that he had bcen
| expecting an attack OF this kind. and he at-
! Moh'l no importance 10 il what 'Ver. " II was
simply ridiculous" he said. to attack the Loan
and Tru-t Company in the matter; as to my;
can only Say that hay" done the best | could
/ for the interests %; the road"
In collation. g the plan q .orSGni2atiqn. Mr.
! sl5o00uoo out of $40 ooo,u0o Of stock. He had
/ gone 20 London at the r'Inest of the Eng n
| bondholdcrs. learned their plan. submitted II
IT, t had i Gecn "' approycd. '9 " and q hal then a
N woTS to who eyS TySo it wer 9a nom IN s6nl E32a n at
/ organization held less than 100000 in stock
| Behind this movement against the present man,
! Hfnm@nl were tl' men, who hnd robbed nne
( runl"rsi the road. They had b,rn driven
9m. Al wore trl M to get back. The reasY,r
Jcwrtf did not Enow but he thought the plain
tiil- had weak ease and were afraid tu ~ I,
I trlal "a this county. Wnrrr sumr Of the mon bc
! hlnl ih' : on - w,r' too wnll known.
! Fletcher Mrstray. - agent and attorney fnl
| " liam l'lt 'hcr and others. living in Englnnd
| vino, rriorto l~hl, " re- owners OF Eric Hallway
stock anl bonds. applied 10 judge Lawrence
| yesterday for an nr."r directing Receiver jew
1T to execute "a r'las, 81 an claims against th'
United Stut.- Government for tax lli g0ily as
sc-s I'd upon et''ks AMI bonds n non-rosi
| dent aliou-. Mr.. M"siray in his AFFIDAVIT sHy'
! tnat alter the Suprnm" Court OF the Untel
States had decided that the Revenue H.
! dil not Impose tax on III" income of non resi-
dcntaiions. uu I thnt the Il duotipn Of such Ia
from ilyilcni- ON stocks of corporations AN.
interest on bond. WAS Illegal, tho S"rrDtary o
tAr 7 s-piy iralr r'su'nt,o for the rrfunl
/ iug II sNrh u iur,luns There WIS reason L
believe Mat upon the prolu'tlon II prop'rl,
! cNcrut"I release by the proper un'cii vi ia
din-reni eeIr3rglons- wE9 hat paid such de
durtiCnS he Treasury n"l lartmrnt would at one
pay over 10 the hoid' - OF stock and bonds tn
amount ui income tUN that had boon re'cNcd
Neither Mr. JyWt u, hs says. nor the conpuny
are inter strd III the in '"me tax 50 aS-"-sr'
and paid. hut arr entitled To recniNc ~ from Ia
UntDd States Treasury. III" order uskod fo
IL. therefore. Mr. Mc-traS says. % an .lir tn
non resident alien holi'r9 of stock and bon y
whom hr r. presents. 80 rrcelNr back tine iaN Il
legally taken from them. judge Lawrence dc
c4deI hat tll" matter should he referred.