The sun. [volume] (New York [N.Y.]) 1833-1916, 1879-04-29
THE GREAT RAILROAD CASE
Decision Against the Pennsylvania Rail-
road Co. Involving SI5,OOO,OOO.

WASHINGTON, April 2s.-Thc great railroad
case Of the Pennsylvania Railroad Company
and the Pittsburgh. Cincinnati and st. Louis
Railroad Company against the Columbus. Chi
cago and Indiana Central Railroad Company.
which has been pending in the United States
Circuit Court for the District Of Indiana since
last July. was decided by Justice Harlan OF that
circuit to-day. Tho case involved the validity
and construction Of the lease made by the Pan
Handle road Of the Chicago. Columbus and In
diana Central road from Columbus to Chicago,
and incidentally some $4,000 600 OF It's bonds.
The lessee company and its Ruarantor. tho
Pennsylvania Railroad Company. contended
that the lease was void under the laws OF Ind-
ana and Ohio. and also that the lessor company
had not kept its covenant to arrange provide
for. adjust. and classify its bonded indebted
ness in the mode and to the extent set out in tho
lease. They claimed also that the lessee had
boon evicted by the decree in the Pullan case
ordering the sale Of twenty-seven miles Of the
leased lines and 10y the foreclosure proceed
ings Of Roosevelt and Fosdick trustees in tho
FIRST consolidated mortgage. MIR. Justice Har-
Ian held:
First-That the lease was not in contraven-
tion OF the statutes Of Indiana or Ohio.
Second-Ihat neither the Pullan decree, nor
the proceedings i'm the suit Of Roosevelt and
Fosdick. constituted an eviction emitting the
WSsto 'OUlpuuy 10 TcclSlO0s Ut lulS llllO Oh mo
contract of ense.
Third-That the covenant Of tho lessor COM
pany, to arrange, provide for adjust and
classify their bonded Indebtedness TO tho ex-
tent agreed upon. was not condition prece-
dent to the performance OF the lessees cove
nant to pay the stipulated rent. but ii was n
matter Of substance. not Of mere form. 1t was
n material part OF the consideration of the cove
nant TO pny rent. and the lessee was entitled to
have the lessons covenant performed within n
reasonable time, and complainant was entitled
70 decree which should compel performance.
The Court gives the lessor company until the
LIST OF January next to make the adjustment
and class lilcntion Of its bonded Indebtedness rs
stipulated in the amended lease, and In default
thereof the com plainant has leave ON that day
TO move for decree resembling the contract Of
lease, and for u settlement Of accounts upon
such terms rs may be- equitable. What were
the rights Of mortgage bOndholders against tho
lessee corporation and against the Prnnsylva-
mia Rnilrond Company Independent OF tho
question uf RECESSION. the Court said was not in
yolyrd in this case, and no expression Of opin-
ion about IL is made.
With regard to the time whom the accrued
rental, amounting now To more than SO 100000,
should he paid 10y the lessee there WIS no de.
clsive expression " opinion. but. at the request
OF counsel ON both sides. Justice Harlan an
nounced that he would hear further argument
upon this point at Chicago on the "a Of June
next. The Hon. Stanley Matthew'S Gov Hem
bricks. and John Scott represented tho Pan
Handle and PENNSYLVANIA Companies. and
Judge Hoadley senator Mcdonald and q. L.
southmayd the c.. c. and ]. c. Railroad Co.