Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1877-11-09
The Central vermont Railroad Gaze.

An ABSTRACT OF THE DECISION OF THE SUPREME
COURT AS RECENTLY RENDERED by JUDGE
BARRETT AT MONTPELIER.
This cause has been pending in the Court
of Chancery for Franklin county since the
mandate of the Supreme Court of january.
1861. 1t came before this court by appeal
from the pro .torna decree of the Franklin
county Court of Chancery made at its last
April term. It was heard by the Supreme
Court at n special term at St. Adams. July "a.
This" said Judge Barrett, lis the first time
since that mandate (of January 1861 that
the cause or any question in it has been
before this court, or any other court in the
State, except the Court of Chancery for
Franklin county, or before any Judge except
in his office as chancellor of the Court of
Chancery for that county" The case is not
before this court for the review or revision Of
questions touching the righteousness of what
has been done done in the course of the his
tory of these railroads. 1t is before the court
upon the petition Of the Central Vermont
company asking for the sale of the Vermont
and Canada and the Vermont Central, and is
to be determined by the application of the
law AS it is to the case as made up from petit
tons. answers records, etc. The decision
then stated in detail, and very elaborately,
the history of the case, the causes which led
to the mandate of 1861 creating a receiver
ship, which went ON under that mandate until
compromise decree of 1864. 1.-THE occasion
and the authority of the court for creating
and carrying forward that receivership has
never been questioned by those who were the
parties to the cause when it was created"
As to the compromise decree, the decision
says that being decree by consent and be-
yond the scope of the original bill and the
original mandate and decree, itdidno. contem-
plate or involve judicial delberation or judg-
ment as to its substantial and effective pro-
visions. 1t was devised and put in form as
the outcome of the mind and will of the par
ties and it adopted what had been created by
the court as n receivership, as known and
warranted by the law, but the administration
of it was not left to the judicial judgment and
direction of the court under the law authoriz-
ing and governing a receivership known to
the law as such. "Instead thereof the parties
enacted n code er c0Htrdctu for the admins
trtion of the property, and provided CT cOn-
tluctu that there should be the formality as of
II decree supervening thereupon. Since that
the administration has proceeded in pursuance
of that fact and if that formality practically
ms nm administration by the agreement of
leading real and representative persons and
parties" All the orders that have been made
since the decree of 1864 have been made up
on the assertion and showing that in the main
they had been agreed upon, and that it was
agreed that they should be obtained. In none
of them was there any ground or occasion for
the exercise of original and independent Judi
cial Judgment by the Chancellor. All that
can be claimed for them is that they were on
~ consent DEGREES, which became effective
only when carried into execution. Such de-
crees have been often made and are common
in this country and in England.
by the provisions of the compromise de-
cree the occasion and purpose for which the
receivership was created ceased, viz. the
payment of rent of the Vermont and Canada
road four months in arrears for all such rent
had been satisfied by funding it into new
stock. except S97, 600, for the future payment
of which provision was made for it to be af-
forwards satisfied, not by income from the
roads, but by new stock at per cent" The
decree of 1864 was designed to establish q
permanent system for the control and admin
istration of the property. Gov. Smith, in his
testimony before the Masters, said that by
the decree of 1864 the whole plan of manage
ment was entirely changed and the whole
property was to be managed Independent of
the court except as it might be necessary for
the court to exercise its general control over
it." The subsequent management such as
leasing other roads, steamboats,, etc, has
been outside the legitimate purpose of re-
ownership. 1t is fundamental in law that a
exigency and. when that is done it is to cease.
Since the close of this receivership in 1864
the petition of the Court of Chancery has
been I'm a sense ministerial and very slightly
if ut all judicial" 1t was the design of the
compromise decree that the property en-
braced in the original receivership should be
pooled, and placed in the management of
those who had been receivers under the man.
date, but have since been the managing agents
of he rfia N interest officers
the court in any but merely formal and nor
NAL sense The sanction of the court cannot
be held to control or essentially modify the
arrangements, agreements, contracts, ETC..
which have been made by the parties. Such
conditions have not existed and do not exist in
this case which give warrant for making ex-
penses of this management first lien on the
property. The cases cited by counsel for the
petition were ably received and it was shown
where expenses of administration have been
made first lien on the property they were in
receverships of necessity, and incurred I'M
der the active and affirmative direction of the
court,
The consent of parties which has been CIV
en- to the compromise decree, and its eXecu-
ton, has been acquiesced in on the supposi-
ton that it would have operation and effect nc
cording to the intent indicated by its terms and
provisions All the contracts and operations
have gone ON in that view. But it cannot be
held that the parties are concluded and bound
by acuuiesence or consent, to anything differ
ent from the real substance and fact of the
successive proceedings, etc, as they were un-
derstood and intended by all concerned II
the Canada company could have foreseen that
il would have been a possible result OF the
compromise decree that this sale as asked fol-
in the petition should be made, it would never
have been a party to the compromise con
summarized by that decree. The same may be
said of the mortgage bondholders. Nor would
the holders of the trust loans have become
such if it had not been forecast as possible
that not only the promises to pay, but the
pledges of, and specific security, were by lu
dical act and sanction to be broken to the
hope" discaimed and annulled
As the position of claimants and creditor
has become fixed in view of the compromise
decree they are entitled to have that view re
allied to themselves respectively to the fulles
extent practicable. They cannot be bound t.
the legal character of the receivership of 1861
as the essential purpose of that was changed
by the decree of 1861
1t is plain that the Canada company and TIN
mortgage bondholders hold position differ
ent from that of the creditors of the trust, AM
while the expenses properly incurred in tn
management are to be paid before the bench
Charles of the trust are entitled to partake o
the earnings, these expenses are not charg
upon the corpus of the property III priority +
other rights and interests in such sense AM
manner as to render the sale asked for Lawful
and needful
The Canada company stands upon thei
lease under the compromise decree, with tn
right to have the stipulated rent pal
out of the net earnings. Subject to this, tn
Vermont Central company stand upon thel
mortgages with the right to have the net earn
ings appropriated according to the RESPECTIVE
provisions of these mortgages. The holder