Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1879-01-28
GIGANTIC LITIGATION.
A Combined Movement Against the
Railroads of the State.
Between Seventeen and EiQhteen Mil
lions of Dollars Involved.

The following is the full text Of the bill
filed in the United States Circuit Court IN
this city Yesterday by Edward l.. Andrews,
associate counsel with Judge Hoadly, Of
Cincinnati, with Charles O'Conner as coun-
sci and adviser in New York. The bill
asks for the appointment of Receiver, with
a view to obtaining Payment Of back inter
est on bonds issued to the East Tennessee,
Virginia and Georgia RaiIroad under the
Internal improvement Act of 1882 and
subsequent Acts. The effect of the bill is
first to collect the overdue interest, and
then, when the debt falls due, and if not
paid. to sell the road under the statute under
which the bonds were issued:
United States Circuit Court, Sixth Judicial
Circuit, Eastern District ofTennessee. In
equity. To the Honorable, the Judges Of
of the Circuit Court Of the United States
for the Sixth Judicial Circuit and Eastern
District of Tennessee.
Your orator, Calvin Amory Stevens. who
is a citizen of the State Of New York,
brings this, his bill of complaint against the
East Tennessee, Virginia and Georgia
Railroad Company, which is q citizen of the
State of Tennessee, and is a corporation
organized, existing aud transacting bust
ness in said State by virtue of, and under,
an act of the General Assembly of said
State.
And thereupOn your orator, complain
ing, shows unto your Honors that he brings
this bill of complaint, as well on behalf
of all other holderers of the Internal I'm
provement bonds loaned by the State of
Tennessee to the East Tennessee,
and Virginia Railroad Company, who may
come in and contribute to the expenses of
this litigation, as on his own behalf as
holder ofsaid bonds.
Your orator shows that the East Ten
nessee and Virginia Railroad Company was
body, polite and corporate, char
tered by acts of the General As
sembly OF the State of Tennessee, passed
on March 9th. l849.
The object and purpose Of the creation Of
said corporation by the said several charters
was the construction, completion, and,
the operation and management
ofa line of railway for the transportation of
passengers and freight from the cityof Rris-
tol, in the State of Tennessee, through the
territory of the State Of Tennessee to Knox
Vile. IL said State. e.-
For this purpose powers were granted TO
said corporation, as are declared in the sew
eraI charters and acts of incorporation. The !
said corporation was authorized to borrow
money for the purposes OF the enterprise. 1t
was likewise authorized to impose liens and !
execute mortgages upon lis property to pre-
vide ior, and insure Jbe payment of its ia |
bilit.es.
Il 1870, the said corporation was, in pur-
suance of law, consolidated with the East
Tennessee and Georgia Railroad Company, !
under the name and title of the East Ten /
n-ssee, Virginia and Georgia Railroad Com
p4nv. The latter corporation now owns, !
possesses, and operates the afore aid East
Tennessee ard Eirginia Railroad.
Your orator makes part of this, his bill of
the said several charters and .
acts, with their several amendments, passed
oy the Legislature of Tennessee, and at !
taches copies thereof, marked Exhibit A. |
Your orator shows that the General As
sembly of the State of Tennessee, by an |
act passed the llth of February, in the year |
1852, determined to lend to the railroad |
within its limits, and specified in .
Dletion of their several lines of railway.
The plan of that legislation was that each |
railroad company should procure a certain ,
amount Of bona tide subscriptions for its .
capital stock, and thatit should have graded,
byidgcd and ready for the reception of rails /
a certain number of miles of its road. BY .
means of these preliminary requirements, !
assurance was obtained that each load /
would be compe ent % iIilL the /
obligation it was to incur under The statute /
hereinafter set for,h. The per:ol of four /
years was allowed for the comple on ofea5h |
section OF road The act prccco,5 . au-
.ho.iZe and give validity to bones o. the |
State, which the Governor was required to !
ssre 20 each company. The amoCl.5 OF i
2e bonds were to he ascereained by the |
length c. each railroad within the S.ate, and |
The proceeds of the bonds were TO be eXclu- !
siveiy applied to TIE payment Of tie rail-
road iron, ana equipments Of the road to |
which they were Loaned. The President |
of each railroad company, assisted by a |
appointed by the Governor, !
was t0 negotiate the safe of the bonds |
loaned to his company. The act was made !
a public law fo- all purposes Of notice, and !
a system ofnumbering was adopted for distin-
gushing each bond, and identifying the |
to which it vas issued. The tenor
of the act which gave existence to the bonds, !
was, that each company became liable up
on, and bound to perform, the obligations
in, and represented by, the bonds
loaned TO it. Each company was to pay, |
from its own means, the interest upon the |
bonds loaned 10 it, as the same uIatured |
from time to time, and also to pay and dis !
charge the principal debt, as it was ex
pressed upon said bonds, when the same
Your orator shows that the sale of the !
said bonds was to be the means Of raising ,
the money requisite for completing the su- /
perstTucture, laying the rails, and providing /
,he equipment Of the roads. The bonds .
loaned to each company were to be payable ,
in such places in the United States as It's !
President might designate. In order to in
sure the said sale, and make market for
said bonds. and to create confidence in the .
public, and on the part Of persons to whom
said bonds might be offered for sale, and
who might become the purchasers of the
same, that each company would punctu-
ally pay he principal and interest |
Of The bords loaned to it, or, in case I
Of its failure, that ample security should be
provided therefor, which might be easily /
realized, it was provided by the statute,
.hat $50 soon as the bonds OF the State shall