New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-11-18
RAILROAD INTERESTS.
THE MISSOURI KANSAS AND TEXAS.


| DECISION.
The opinion of Justice Miller of the United States
| Supreme Court recently rendered, restores TO the
| Missouri Kansas and Texas Railroad Company
possession and control of the property which has
been under the management of the Union Trust
Company, Trustee, since July 1875. Applica-
ton was made to the Court to remove the property
from the hands Of the trustee company and
although no opposition made by that company
it asked the specific orders of the court. Justice
Mlller's opinion is clear and exhaustive; it Is given
! in full rs follows.
Union Trust Company agt Missouri, Kansas and Texas
Railway Company and Others.-In chancery. The
Circuit Court o; the United states, District OF Kansas
Mr.. JUSTICE MILLER.-This bill is brought by TINS
Trust Com pany. citizen OF NewYork in the Circuit
Court the United states for the District OF Kansas
against the railway company, citizen Of the latter
state and Others The primary object Of this bill Is to
obtain the direction of this Court in regard to the per-
fOrmance OF duties of the complainant trustee un
der circumstances mentioned in the BILL and it comes
before the bill, the and cross-bl OF the
defendant company and certain exhibits and adavits
time write out full the reasons govern
ing my decision and. in what have 10 say, must refer
instruments, whose consideration control ac-
tion without copying them the material parts OF
them.
The Union Company in possession of the road
OF the railway company trustee, under two mortga-
ges and agreement in writing concerning that pos
session The possession delivered under the written
agrer mrnts and an orer Of the year 1875,
and the road finances and all its affairs have been
managed by tue lrnst company ever since lne reason
for placing the OF the road in the hands OF the
Trust Company It's failure TO pay the interest on
the mortgages OF the railway company, IN which event
these mortgages contained provision iOf sucn rsnsIer
OF possession In the actual event. however the agree
men1 already mentioned to the nsture and duration
possession transferred. ana the duties ana
powers OF the Trust COnlaany While 10 possession was
the more immediate arrahgemeht uhIer which the Ist
Company toOk charge OF the road. The man purpose
extending many hundred miles through several states
and Indian Territory beng placed in the Trust Com
company especially OF the first mortgage bonds, IN
/ regard 10 which the Trust Company was tne rus
| tee. The railway company which was then
much IN debt, and had FOR some time failed
/ to pay its interest now comes forward and
tenders all due aud unpaid IN any OF its funded
alleges Ito ability IN future meet all It's OOgl
they mature, aud demands to be restored to the
possession ana control of il property II there exists
no special The contrary this would t0 be
which the Trust company Is trustee
tnan twenty and the railroad company is ready
10 pay all the iStere-t tha Is due aG ~ IN condition 70
III future instruments IL is dcdlt TO see why It's
property should kept out OF ts control and IN the
bands OF another corporation Tor tese tWcGy years
Tie points rIsed by the Trust company are ~ hat the
OF the first mortgage under when they hold
requires TINS ana t2) hat the written 2g.eemen hhder
which they took requires that they should
TIE morgag. or deed OF trust contains two distinct
provisions as powers Of the Trust Company In
ease OF default OF payment by the railroad company
found Ia articles twelve and thirteen OF the conditions
II me instrument Article twelve begins as follows:
default shall be made IN OF inter-
est mon either II said bonds when the same becomes
Gue and payable or IN payment Of any sun OF
money herein before provided TO be made Tor the ere
alton Of said sinking fund, ana such default shall con-
rinUe for x mon ihs after tie same has been demanded
the whole principal mentioned 10 each and all OF
| said bonds tnen outstanding, sAau ~ cue option or
holders of majority in interest OF sad bonds become
forthwith due aud payable. Aud IN such case II snail
be Lawful for said party OF the second par the Trust
Company is successor OF successors 20 en-
! ter upon al Hnd singular the railroads.
property and premises hereby conveyed or
! Intended to be conveyed aud nave. hold, use and
operate the same. unI the SAME 5hul nave Deen s0d
the rs ees may t en- dos very ful confcr
very But without CELEBRATING the naterI 9m
the state In the power Of entry and posses
depends. mean the case In which trere has been
| by maiorlty Of tue boudholcers that the
yboI1 of ths sums secured m the bonds ard the mort
gB1c has become due according TO thc option wnlch
ht holders have so 60 do. Ihtr ana NOT nn then 90
an these extraordinary n the trustee beg ana
the r-uiely default IN paviuS Interest IL found
in section tAlrteca l. II az fohoWs: " IN ease default
be made aud contnue1 as aijreslid tihat Is Tor
s1 mouths aterdemandl me party OF THE second part
its or successors IN trust may also ana upon
the written quest OF lle hoiIer5 OF al st Que hot'
and Of such bonds, then out5tan tHS mo ntng o one
million OF dollars shaH oieciose TINS nor gse ~ lrgi!
| In tIie CIty OF N w-York. etc.
Both these sections contain sDCcf3 dire icns for the
execution Of the powers whc1 tacy confer but these
powers under the hrst clause, Wncu rnere Is d-
whole debt due and under the secOnd clause, when
there a default and holders o thous anl bond- VI
80 H W T,r- Nei-her ~ ,r-e vents las occurrad
There has been exercise attempt 20 the
option declaring al tine bonds 10 be due nor has there
Iser any d.nl,nd by any OF the bondholbelr on the
usees % forecose the mortgage by either OF the modes
mentioned can see no Hght. under thls mortgage IN
Tho Trust Company to take hold possession of The
Xs regards the agreement the parties under which
m, lal possession taken, cannot recte il here
II wa, made mainly benent OF the railroad
pauy, prevent rne necessity OF orecosure Oh the
mortgage by either OF tue MODES pointed our IN Ihe ~
struent and the period Of six years TO when the pos
Sc. hon was linn ted, intended 20 give the company
tnat much time 10 retrieve Hs coudtoh ana resume
uayuen; Or is Interest during lLls ine the ROAD Na-
10 remain under the control OF the Trust Company ard
no foreclosure was to In had thr coLp9hy revenue
could pay the reduced rate Of interest II TINS could not
II al the end Of six years, the railroad CON-
pany could not resume ana maintain the iuture pay
urnts interest ns6dlmens. the parties were re-
mltted to their rights under the Original mortgage.
The business OF tue road conducted that.
with the aid OF the increase o. Scneral prosperity all
the secandHry or suOsl4Ilry mo! cages aud claims
against the company have been paid arranged,
tnat nothing due and unpaid oxcept parts Of the two
There hands Of the Trust Company arge sum
OF money SAY S3OOO0Ol applicable TO ther payment
and tenders the balance. Must the Trust Company keen
The possession for two years longer under These cun
sahces should they accept the money. pay oil the
vncrI Tthns tbat the condton being for the beueht
OF the railway company waive the remaining TWO
years Of tue agreement; and when all that Is due IL
paid they entitled to the possession or their prop
It is suggested that the Trust Company owes duty to
what are called the second income bond holders
which requires them 10 hold the posse sion; hut that
has provision for possession OF the road
until defau t. and there mas been no deIault It only
conveys the net income after expenses aud interest on
prior mortgage, and Its ony remedy is that no dividend
can be declared until the interest Is regularly paid
can see right OF the Trust Company hold for those
bonds
Il is also sad that there is such security that the
rail road company will be able 10 continue rhe future
payment ~ rs interest the agreement conteupates
am Of opinion that IN this, counsel II mistaken that
he admitted with TIE Written Instructions VI the
Advisory Board. which organized under the agree
men for purpose of advising IN Just such case az
TINS ore sufficient warrant for surrender OF the prop
Iet decree be drawn in accordance with this opin-
ion. cAh /. nrLl.Lit ,uuEe.
IouN r DILLON. Attorney tor Railway Company.
CuARLRs T. WHITEHEAD Attorney Tor Amsterdam
Committee.
THE BOSTON AND PROVIDENCE DIRECTORS.