The New York herald., 1878-01-10
THE ERIE SUITS.
Applications to Open the Decree
of Foreclosure.
MOTIONS SUPPORTED.
Tits Between the Lawyers Ar
rayed on Both Sides.

OF large oundes OF Drtefs ana pampncts appertauhs
TO "Erie literature" when Judge Daniels appeared In
Supreme Court, Chambers, yesterday. Mr. A. J.
vandorpoel presented a petition motion to open
the decree OF foreclosure behalf Of Charles Ger
main, guardian nd litem Tor William Zaggel, an infant
defendant, who It set forth has q judgment
against the Eric Railway Company, which it is alleged
is prior lien on some Of Its property In Niagara
county, and which is advertised sold under the
foreclosure.
Ex-Judgo Comstock representing the Farmers
Loan and Trust Company trustee proceeded 10 argue
in opposition to the motion. He claimed that the
ceiver practically the place OF the trustee Of tho
mortgage to be forecosed IN carrying out it's condt
tions; that the lien OF the petitioner was not prior
lien, senior, but junior Iicn that II the peti
tiouer should be found to really have senior lien
then his interests would not DO cudced by the SALE
because the property which ho such lien would
not be covered by the decree But even II By any
microscopic examination he should be found to have
lien which was not cut of by the Decree
no (the counseD would assent to additional clause
being inserted In the Decree draft Of which he then
read TO the Court This clause provides, In substance
that any lien which tho petitioner may have against
the property OF tho company not included in the de-
cree shall not bo prcjudced or affected by tho sale
under its provisions.
Mr.. vanderpoei, in reply, asked how 1t is possible
that any creditor know under what circumstances
his interests placed In such tho pres-
en before the Court asked TO upon the matter
By looking ut the bill OF foreclosure II would
be found that Mr. Gcrmain only has lien on
mortgage or some paft thereof II ho has
lien, then he has rights to protect but having
this right think bars him from the mortgaged prem
scs II might be found by 'microscopic examina-
tion" that whereas he has SENIORS right he Is cut
of by this decree and his rights turned into juniors
injury let him to his rgh,fu position. Tho
decree ingeniousy drawn that what the creditors
will get depe nds the caprice OF the receiver in the
Wo are not told whether the property on which
mortgage or otherwise. There Is no inventory
tho decree. We know this by the records
OF this Court aud by the affidavit of Mr. Turner,
OF the counsel IN the case In regard to an inventory
transferred 10 Mr. Jewett amounting TO $l5 900,
counsel said there was also another schedule OF Sc
curtes amounting to $19376 u, and 1t appears nc
held all OF these SECURITIES late as March ID, 1875.
1t set forth BY the receiver that portion Of these
securities was IN possession OF the Farmers Loan
and Trust Company, trustee under tue mortgage.
Now, when the purchaser comes to that sale Is he
gong to bid TO pay our claim not? It. is impossi-
Dle that the Court should allow the decrcc to
stand. Counsel tho other side cannot tell whether
the property in Niagara county Is covered by
the only action in which the inventory is Aed This
there default and they have the suit along
from that Time up 70 december, 1877, to mix
accounts win rcnts and profits In such way that
IN conclusion, sad that 1t did not require
to discover that the decroo oil foreclosure
In this Is defective IN not specifying what prop
erty II 1t irregular ard should therefore
aside in order that the infant mght suffer-
OTHER QUESTION.
Ex-senator Laning, associate counsel Tor the peti-
tioner, followed IN an argument IN which he urged
thai his hrm In Buffalo, as COUNSEL for the infant had
received notice oil the proceedings 10 forcose the
mortgage until October, 1877. The Erle had filed
lis pendcns in Niagara county, but no copy or de-
entered or submitted TO his firm before the
former had attempted 10 scoop In q branch ruiroad
he believes the decree covers everything owned by
the Erie Railway Company IN Erie and Niagara coun
ties.
Ex-Judge Comstock--If the Court entertains tho
same opinion wiling to exempt the property
IN Erie county from the decree.
Ex-senator Laning-Wo ask the Court to permit
the opening OF the Decree as III LIS terms 1t Is abso
lutey VOID and Intended to cut oil The rights all
otner parties, and especially the right OF this infant;
tha. he may 10 permitted to put in AN answer asking
the side by what right they propose sell all
the property owned by tho Eric Company IN Erie and
Niagara counties
Counsel then handed in their respective briefs to
the Court
Whom the Court met after recess motion peti-
tion OF James McHenry and order to show
why he should not DO mado party the suit OF
Farmers Loan ana Trust Company The Hrie Rail.
way Company; and also molion on petition of
Albert Dc Betz, Of the city OF Antwerp; of Morz
LEVIN Borchard OF the samc place. and OF Jules Le-
vita OF Paris also to snow cause why they should not
be made parties to the same suit, taken up aud
argued together. Emoti, Burnett aud Hammond ap-
pcared as attorneys Tor McHenry; Alexander and
attorneys for the Farmers Loan ana Trust Company,
with exJudge coms.ock counsel The Erie Rail.
way Company represented by their attorneys,
Shipmap, Barlow Larocquc and Mcfarland
Mr. Ashbcl Green presented the answer OF Sir Ed
Watkin Others which Is set forth that they
together constitute cominittec or body of trustees
0t the rst and second consolidated bondh0iders and
OF the holders OF the preferred ana common stock OF
tho Erie RaIway Company, and that they also
divdusy holders OF such bonds and oi sucn stock;
That carly US tho spring or summer oil the year
1876 il became known TO the hrst ana second bond
holders residing Great Britain that their
respective righ's and interests were IN i'm
Ininent peril, by the insolvency
or hopocssiy dcranged financial condition OF the ERIC
Railway Company; that Mr.. Hugh j. Jewett had
been appointed by this Court recover OF the
and property oi said company, and that crisis in the
affairs oil the company had been reached which would
render sale oil its property and franchise inevitable
Alter stating at length the manner In which tho
Farmers Loan and Trust Company tplantlG IN tho
action commenced the suit Tor The foreclosure OF the
CONCLUSION as follows -"And these dciendapts
represent to the Court that the paintln
in al nS things n fashSIy % observed p''s and pcr as
formed It's trust under the said mortgage; that
nearly all OF tho said first bondholders and all,
hcse defendants believe, except the SAID McHenry
his TWO associates, are entirely opposed tho
mov OF said trustee, aud opposed 10 tho foreclosure
and sale which the SAID McHcnrJ demands, being
tircly that he Is IN pursuit OF selfish and
sinister purposes instead Of Tue protection OF any
tcrcst winch he has or rctends 10 have as holder Of
SAID first bonds"
ASKING FOR RECEIVER JEwErr's REMOVAL.
Tho petition OF James McflcDry also prcscn ted by
Mr.. Green, prayed for the removal OF Ar. Jcwolt us
receiver, the ground that the management VI the
riiroad and It's properly by HIM has been improvi-
dent, wdstciui and dishonest IN various particulars,
and that the result Vi such management has been
coate lar amounts OF indcbtedAcss to the extent, as
tho petitioner Is informed ana believes oil more Than
x2, UOV, ,0OU, which ought not 70 nave been created
In answer 10 this pctiuon Mr Turner read voum-
inou affidavit from Receiver Jewet, In which nc set
forth he had managed the road to the ext ent Of his
ability In the best interests vi tho stockholdcrs that
he challenged any NODE OF investigation into the
affairs OF tue company that the Court may order. Ho
denies needless expense has been curing
his rcceivcrshp but the contrary asserts that lie
has materially reduced the running expenses. Mr..
mcrsi Loan and Trast Company reply To
the petition OF Dc Bciz ana others, setting
forth tnat they The agents and servants OF Nc
Henry; that they without any resources;
that an Investigation Jailed TO show that they owned
held any bonds or stocks oil the Erie Halfway Com.
n nv and as sucn entitled TO DO considered
by the Court having any pecuhary interest IN tno
Eric Railway.
THE ERIE RAILWAY coMPANy's ANSWER.
ai mn k.Il ~ Iumulux tle