Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1880-04-02
The Chesapeake and Ohio Canal Suit

The answer of the Chesapeake and Ohio
Canal Company was filed Tuesday in the
United States Circuit Court to the petition Of
Stewart, complainant in the receivership SUIT,
asking for an order OF the court TO prohibit
the company, pending the suit, from entering
into certain arrangements and contracts. The
company adopts as part OF its answer re-
port from President German 10 the company
in 1877, setting forth clearly the policy and
terms Of the contract with the Potomac and
Piedmont Coal and Railroad Company re-
ferred to ia the petition. They state that
they are satisfied the court will regard the
arrangement as wise and proper, 10 the great
advantage of the preferred bondholders and
all interested in the canal and its revenues,
and that il is within the power reserved TO
the company and its officers by the act of 1874
and the mortgage of lS48. Nevertheless the
company has not in fact adopted the arrange
ment. 1t has only been submitted 10 the
board of public works, and, if approved by
that board, it was proposed to lay it before
the stockholders at the next annual meeting,
in June, 1880. If not approved OF by the
board Of public works, it was not intended to
submit it to the stockholders meeting. Re-
spondents are advised that all contracts en-
tered into pendente lite are, in cases like the
present. su beet to the effect of such pending
litigation, and the company tenders itself
willing to abide by any restraining order of
the court in the premises. But they respect
fully protest that no such order is necessary
in view of the facts. The measure proposed
is of vital Importance to the entire future of
the canal, and no action should be taken by
the court without an opportunity having
been afforded to respondents TO demonstrate
by the evidence how suicidal the opposition
of complainant would be if successful.
The answer to the petition of d. X. Stewart
for a temporary receiver pending his appliCa-
ton for permanent receiver was also filed.
The answer states that the testimony required
10 be taken 10 determine the question Of
temporary receiver and the time when il
could be heard would bring the decision al
most up to the time when the final hearing
would probably take place, and says the
court would be most slow TO recognize the
existence Of a possible necessity for such ac-
ton when final hearing on the merits is i'm
pending, and might demonstrate TO the court
the wrong and injustice OF an introductory
order for a temporary receiver. Still less
would a court Of equity consent that com
plainant shall obtain under such circum-
stances, TO the great injury, destruction and
wrong of defendant, the very relief which
the complainant claims as final relief only.
Nor would the respondents have the remedy
of an appeal, which does not lie from an in
terlocutory order. The grounds on which
the temporary receiver is asked for are
First, that a quarterly stipend and mileage
expenses are paid TO the directors; second,
the leasing of certain works near George
town called the outlet locks for which, it is
alleged, eghtynine thousand dollars have
been expended by the canal company in three
years, and for which they are 10 pay SIS, 900
a year for twenty-five years third, the pur-
chase of the Walsh & McKaig wharf at Cum
berland for $1,000 SO far as the expen-
dtures already made on these accounts 90
they cannot affect the question. All of these
matters were covered by the original bill and
interrogations on these charges. The special
objects sought by the temporary receiyership
can as well be secured by an injunction or re-
strainng order, which the court would have
as much right to issue as to appoint tempo
rary receiver. They deny that any payments
or allowances nave been made to directors,
with single exception, since September last,
and assert that there is no purpose 10 renew
such payments. As TO the outlet locks, the
wisdom of that measure will be denied by no
one capable OF forming an opinion on it.
Walsh q Mckaig's wharf at Cumberland was
a valuable acquisition, and if in adverse
hands, would perhaps more seriously affect
the revenues Of the canal company than they
could be damaged in any other way.