Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1878-05-24

huty miles was compile ted, the State was eX-
pressly declared to be invested with hen
and mortgage on said section, without deed
from the company for the payment of said
bonds and interest as they may fall due. On
completion OF the road the lien on the whole
was expressly vested in the State and given
| priority over any hen, lncumbrance or mort
gage of any kind. This act was afterward
several times amended as to the amount to
| be loaned to the railroads. Under these diff
| ferent statutes the Mobile and Ohio railroad
| received from the State one million two hun
| bred and ninety-six thousand dollars OF
| bonds The State by loan provided for the
creation of a sinking fund to hquidate the
| principal and interest OF the bonds. During
| the period of the war the railroads were una
| BILE to comply with the requirements of the
sinking fund law, and this inability contin-
ued after the war. In 1869 the State owed
over twenty-nin million dollars on its bonds
issued to railroads and other inter-
| nal improvement enterprises. Both
the State and the railroads claimed
| that they We're unable to pay the
interest The State had a first lien on the
! property Of the railroads, and it was thought
| by the transfer of this lien to those who would
| take up the State bonds scheme of relief
| would be assured which, while it relieved and
| unidentified the State, would, without in
| creasing the debt Of the companies. yield
| them additional means to pay other debts
| therefore, February %, 1869, passed an act
which authorized the liquidation of the in
! debtedness Of the railroad companies to the
| State Tor the amount of State bonds which it
| had advanced to them, as well as the prlncl-
| pal not yet due as the interest, which was In
arrears, by the delivery into the treasury OF
| the bonds of the State equal to the amount
| of such Indebtedness by the railroad compa-
nv itself and in case the railroad company
should acquire and deliver to the State the
| necessary amount of State bonds for the can
| collation. of its Indebtedness, 1T should be en-
titled to issue It's own bonds 70 an equivalent
amount which should be a inst mortgage
| lien upon the read of equal validity and effect
with the original lien Oh the State. and to take
the place pro tdRtO of the state lien.
On the twenty ninth of January,
1870, the legislature passed an
amendatory act repeating a condition
in the first act which provided that railroad
companies availing themselves of the benefits
of the act which had issued second-mort gage
bonds, should file with the comptroller bonds
of She same series as those loaned to such
company for which the State held first
mortgage lien. In order to accomplish the
purposes contemplated by the acts, the board
Of directors of the Mobile and OHIO railroad
executed deed of trust to William Butler
Duncan, Adrian Irelin and Richard Il. Will
son, as trustees, TO liquidate the Indebtedness
of the company to the State by paying In the
State bonds authorized by the above-men-
toned acts. AS trustees for the parties who
were to advance the money to procure the
State bonds, Duncan, Irelin and Wilson were
vested with the same liens as held by the
State and the same right to enforce them.
To make provision for REINFORCEMENT the
company made a new issue of Its so-called
first mortgage substitution bonds" to the
extent of one million six hundred and
eighty-fve thousand dollars, which was
about the amount of the Indebtedness of
the company to the State, and the State
bonds for which were paid into the State
treasury by the said trustees. The company
| for a short time paid interest upon those
| substitution bonds, but then defaulted
| and became wholly insolvent. There was
| mortgage lien upon the entire line of the
road executed in 1853 to the amount of five
million dollars, commonly called first mort
gage, but the bonds issued under this deed
were expressly made secondary, as so
claimed, to the lien of the State of Tennessee
over that portion of the line situated in said
State. The case at issue is presented by GER
tain of the bondholders under this mortgage
Of 1853, claiming to represent six hundred
thousand dollars, disputing the validity of the
lien claimed by Duncan, Irelin and Wilson,
as trustees. The courts below decided that
the lien of Duncan, Irelin and Wilson has
priority, and from this the appeal is made to
the supreme court. A decree has already
been entered IN the circuit court of the United
States for Alabama ordering the sale of the
road at the instance of the mortgages of
1858, but the sale is suspended pending the
decision of the supreme court.
THE TEXAS AND PACIFIC TITLE,
which was questioned in the proceedings had
before the Judiciary committee of the house
full reports of which were made a part of
this correspondence-wi not be reported up
on for some time, perhaps weeks. The sub
committee to whom the finding Of a verdict
was committed has agreed to report that the
title is good to that part between Fort Worth
and Ell Paso, with an intimatlOn that the
committee has some doubts about the title to
the finished part east of Fort Worth. But
as the resolution inStructing the Judiciary
committee to make the inquiry confined its
investigation to that part west of Fort Worth,
the subcommittee does not feel called upon
to go into the question of the title to the east
ern end of the line. This report will not, |
understand, be accepted by the committee
On the contrary, it is more than likely that
the committee will ask for an enlargement OF
the Hewitt resolution, by virtue of which the
investigation of title was conducted, so that a
report can be made to the effect that the title
to the completed line obtained from the re-
ceiver of the Memphis and El Paso railroad
company is questionable: The purpose of
this movement is not merely to defeat the
Texas and Pacific company In their request
for subsidy of th,rty-eight million dollars
to build their road from Fort Smith to San
Diego, but to force upon the attention of the
house the good grounds that exist for the I'M
parchment of Judge Joe Bradley. 1t is i'm
possible to read Campbell's speeches, the
substance of which gave in two lengthy let
tiers, without reaching the conclusion that be-
sides his guilt in the matter OF the legal-ten-
der decisions, the eXtrd-judicial conduct of
which he was guilty in connection with the
sale of the Memphis and Ell Paso railroad, ia
something for which he should be impeached
and degraded, in order that respect and con-
tidence for our highest court may be main
tanned.
MISCELLANEOUS.
The bill for the establishment Of United
States court for Memphis, to sit alternately
in that city and in Jackson, will, [ am relia-
bly, informed, pass. The gelection of eau
didate for the new judicial seat is now in
order. Only Hayes men opposed to investl-
cation need apply.