Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1880-10-30
DELrNQUENr RAILROADS..

DELINQUENT RAILROADS.
HOW the state Parted with its I'm.
teresf i'm Them-The Decree Tn
der Which They Were Sold.
The following decree is published
for the information of those who
desire to know the exact conditions
under which the delinquent rail-
roads were sold to satisfy the states
lien:
State of Tennessee VS.. the E. & K. R. r. Co.
ct ais.
This cause was further heard on
this, the 9th day of July, 1871, be-
fore Hon. E. III. East, Chancellor,
upon the pleadings, previous pro-
ceedings and proof, and it appear
ing to the satisfaction of the court
that DEGREES have heretofore been
entered in the case of all the rail-
road companies made defendants,
except the Memphis, Clarksville &
Louisville railroad company and
the Nashville and Northwestern
railroad company, ascertaining and
declaring the amount of the state
debt against each of the said several
companies for state bonds issued to
such roads under the internal inn
provement act of 1872, and SUBJ
sequent acts amendatory thereof,
and that said companies are each
and all wholly unable to pay the
said several debts to the state or to
keep down the semi-annual interest
accruing thereon, or to payany sink
ing fund to meet the principal of
said debt at the maturity of the state
bonds issued to them as aforesaid
that said several companies are, in
fact, insOlvent and unable to COM
ply with the provisions of the said
internal improvement laws designed
to secure the payment of said debt,
principal and interest, and have no
prospect of ever being able to COM
ply with said provisions. 1t further
appearing that of the roads whose
debts have thus been ascertained,
the East Tennessee & Western
North Carolina railroad company
has declined contest with the state
in regard to the sale of the states
interest in its road, and decree has
been rendered accordingly for a
sale of such interest by the COM
missioners at once; that all the
residue of said companies, except
the Southwestern railroad company,
have consented to a sale of their
said several roads, with all their
rights, privileges and franchises,
and DEGREES have been entered ac-
cOrdingly, preference for a limited
time being by such DEGREES conceded |
to the said companies respectively,
and then to their stockholders, or
such of them as choose to join in
the purchase, to become purchasers
of their said several roads at the |
minimum price fixed by the court |
in accordance with the act of the |
2lst December, 1870, ch. %, and |
that a decree has been made for
sale of the Southwestern railroad.
1t further appearing that it is |
made the duty of this court by said |
act to adjudicate and determine all |
questions of law and matters of |
controversy of whatever nature,
whether of law or fact, that have |
arisen or may arise touching the |
rights and interest of the state, and
also of fthestockholders, ,bondh0lders,
creditors and others in said road ;
and likewise to define as may be
thought proper, what shall be the
rights, duties and liabilities of a
purchaser in the states interest in
said roads, or either of them, and |
what shall be the reserved rights of
said companies, stockholders and |
others espectively, as against said
purchasers after such sale under the |
existing laws of the state. And it !
further appearing to the satisfaction
of the court that the holders of the |
state bonds issued by the state to
the said several companies are |
properly made defendants to this |
suit, and are sufficiently represented |
by the holders of such bonds as are |
made defendants by name, or have |
come in and answered.
1t further appearing that the |
holders of bonds issued by said sew
eral companies, and secured by |
mortgage of the road on its income |
or without any security, by mort
gage, lien or otherwise, are also |
properly made defendants and rep
resented, that the general creditors
of said companies, the stockholders,
and all other persons interested in
also made defendants and repre- |
sented, including the creditors
whose claims were created by, or |
while the roads were being held and |
managed under receivers appointed |
under the act of 1872 and acts
amendatory thereto. And the court |
being Of opinion. that the statutory
lien or mortgage secured by the said !
internal Improvement laws under |
which state bonds were issued to |
the said several companies was in |
tended to enure, and does enure only |
tO the benefit of the state, and that |
the holders of said bonds have no |
right now, and will have none at |
the maturity of said bonds, by way
of subrogation or otherwise, under |
and by virtue of the said several |
acts and the lien or mortgage re- |
served and secured by them, to go |
upon the said several companies or
their road or property for the pay
ment of either the principal or in
terest of their said several state |
bonds, but must look exclusively to I
the state for payment.
The court is further of the opinion |
that neither the state of Tennessee,
nor any one claiming by, through |
or under it, will have any right to
enforce the collection of the princi- !
pal or interest of the state bonds so
issued as aforesaid against any pur-
Ghaseps who may purchase any OF
said roads, its franchises, etQ., under /
the DEGREES in this cause, either di-
reetly or through the commissioners
of such purchasers, fully complies
with the terms of sale, as fixed by /
the DEGREES and the acts of assembly |
or agreed upon with the commits
sioners. The court is further Of
opinion that the lien of the state to-
the full extent of the debt of the /
said several companies for the state /
bonds issued to them severally as
Aforesaid and the unpaid Interest |
thereon, as asceFtained by the de- |
crees in this cause, Is prior and SUI
perior to the claim of all other cred
itors of said several companies of
every nature and kind whatsoever, |
and whether secured by mortgage, |
pledge, judgment or otherwise, or
without any security. The court is
further OF opinion that the state debt /
as ascertained as aforesaid largely |
exceeds, In every instance, the full |
value Of the several roads upon
which it is a lien, its rolling stock