Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-12-18

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matter Of the issue of debentures in payment
for the construction of the extension lines OF
the st. Paul & Pacific Railroad company came
up in the United States circuit court, Judges
Dillon and Nelson on the bench. The report of
the master in chancery { H. E. Mann ESQ., was
submitted as to the additional evidence in re.
gard to the actual cost of the extensions, taken
by order of the court during the present term.
The suit is entitled John s. Kennedy ct al VS..
The First Division st. Paul & Pacific railroad
company.
The main question was the issue of deben-
lures in payment of the ST. Vincent and other
extensions on application of Receiver Farley in
behalf Of Stephens, Smith. Hill, Kittson and
others. Involved in the matter were the addi-
tional issues of a suit on coupons, the same
parties plaintiff and defendant, and also the
foreclosure of what is known as the SIS, 600
mortgage
Opposition to Issue of debentures on the
part of the St. Paul & Pacific and Northern
Pacific road was withdrawn by counsel, Gen.
Sanborn. Thus the fight was narrowed down
between the receiver for Kittson, ct AL Judge
Young counsel, and the First Division compa-
ny, Hon. Fl. R. Bigelow, counsel.
Judge Young opened the case. He began by
reciting the order made by the court May 3lst,
1878 relating to the construction of the extern
sion lines. He referred at length to all the
provisions of the order. He averred that under
and in compliance with the above referred to
order, that 127 miles of road had been con-
structed. Every mile of it, and the entire
length of the line had been completed in &C
cordance with the terms of the order. Counsel
related the history of the construction, and
dwclt upon the means employed to finish the
line. The construction was held to be neces-
sity, two-fod in its nature, to secure land
grants, and by this to add to the Sc
curity of all parties in interest.
Money had been advanced to construct
the road, and within the time specified and to
advance the whole interests of the company,
the extension lines were built. Counsel con-
tended that under the provisions of the order,
the bondholders who had advanced the money
were entitled to the debentures. In substance,
counsel argued from these points. The road
was constructed under the order of the court
the road was completed, and fulfilled all re-
quirements of he order; had been accepted.
From these general propositions, he held that
the issue Of debentures was due in equity and
justice.
Mr.. Bgelow argued at length in opposition
to the claims set up by petitioners. The main
point of the opposition based upon the
declaration that the order Of the court had not
been complied with, out of this grew the
averments that the amount of debentures
asked for had not in actual money been ex-
pended in the constructions. Further it was
argued from the evidence in the case, that the
road was not completed as intended and de-
fined by the terms of the order. Referring to
the allegation, that the road had not cost, what
was claimed, counsel mentioned and discussed
at len, tn the evidence of Mr.. Robbins, con-
tractor.
In this connection, counsel referred to the
contract under which Robbins operated. He
stated it had never been submitted to the
court. had only been entered into on the part
of the receiver and Robbins without the courts
approval. This was one point, and an lmpart-
ant one, counsel claimed why the debentures
should not be issued. In further alluding to
the cost, counsel intimated that the expendi-
ture claimed was in excess of the actual cost.
His interpre- alton that the order only de-
elared debentures should issue for the actual
disbursement.
At this point counsel was interrupted by the
court, who stated that the two important ques-
tiOns at issue we1> Vas Robbins, the con-
tractor, acting under bona ffde contract or q
sham one?
As TO the question of the cost. the court be-
ieved that the question was: We're legitimate
or excessive profits charged?
Counsel resumed and addressed him
self to these questions. In substance
the opposition claimed that the o der not
complied with: in the manner of the contract;
in reference to the comp letiOn of the same and
as to cost of the construction as alleged.
The court, after the conclusion of the argu-
ment. stated that the case would be taken un-
der advisement.
The case was further continued, in collat-
eral issue, on the application of counsel, Hon.
G. l.. Otis, to take up and hear the cause in the
foreclosure of the $l5.O000 900 mortgage. Coun-
sci stated as, reason for this action. that de-
cree would grant increased security to bond
holders. A foreclosure would be followed by
the organization of new company, and after
all foreclosures had been made. the several COM
panies would be consolidated, and one company
assume the responsibilities. In no other
way could he see how the difficult matter could
be solved. The substance of counsel's remarks
that the evidence all in; that the case
had best be brought to conclusion, and that
unless decree granted that bondholders
were only secured by incomplete lines and frag-
ments Of land, etc.
Mr.. Bigelow opposed the application. His
principle reason being that he was not prepared
to submit argument, because not acquainted
with the evidence. The evidence had only
been completed within few days, and he had
not had even time to read it over.
Taken under advisemeut.
In the matter of the coupon suit. the same
line of argument was advanced pro and con.
Mr.. Bigelow asked for a continuance mainly on
the same grounds as above related.