Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1881-01-07

poiRted il would not be for any merely tenn
porary purpose to keep the canal going pend
ing litigations and looking 10 a sale or other
termination of his duties, but il would be to
operate the canal until from the net income
these bonds with fifteen years Of accumulated
interest should be paid off. For some forty
years of its existence the canal earned moth
ing beyond its current expenses, and it was
not until after 1868 that it made any payment
Of interest on these bonds. Many of the diff
fculties and disasters which in former years
have stood in the way Of the pecuniary sue
cess Of the canal may at any time again oc-
cur, SO that il is manifest that the court by
its receiver, il it took possession of the canal,
might have 10 manage this artificial water
highway-in need of constant repairs sub
ject TO freshets, strikes and the difficulties of
mpetition-through period of time which
this century might not see the end of To
lead the court 10 pass such decree, the case
should be free of every question as 10 mis-
management Of the corporation and as to the
absolute right of the complainant to have
such relief, and there should be no doubt that
the appointment of a receiver would be an
efi'ectual relief. The complainant has shown
and has pressed upon the attention of the
court several considerable expenditures of the
tolls aud income, which, is alleged, are in
are wilful Interpretations of money which
should have been applied TO the payment OF
interest on the bonds. These are expendi-
lures for, first, the outlet lock above George
town second, the leasing and purchasing of
wharves at Cumberland third, The telephone
fourth, the payment of directors and their
hotel bills With regard to the outlet locks
above Georgetown and the wharf property at
Cumberland the respondent corporation has
produced great deal Of testimony to show
that the acquisition OF these terminal con-
veniences was absolutely necessary to enable
the canal to maintain itself against competi-
ton which threatened its existence, and that
the possession of them has put the canal in a
position of independence from adverse con-
troll and OF ability to economically manage its
business and earn revenue such as il has not
heretofore enjoyed aud from which the bond
holders will reap Immediate benefit. Without
now considering these questions in all their
bearings ii is sufficient for the purposes Of
this motion to consider the standing of the
complainant with regard TO these expendi-
lures These acquisitions have not been un-
dertaken secretly They have been consider
ed and discussed in the published reports made
by the president aud directors to the stock
holders for some ten years past, and commit
tees have been appointed, who have reported
on them, 1t may be fairly SAID that the com
plainant, through his representatives and
agents at stockholders meetings and other
wise, has had full notice of the intention Of
the corporators to acquire these terminal
facilities and OF the reasons for so doing. lie
never raised his voice in protest before these
acquisitions were consummated, and il does
not seem TO us that he can how be heard 10
say with any force that they were such II
wrong upon his rights under the mortgage
and evincc such reckless disregard of tAem
| that the court shoald in consequence Dust the
corporation from possession and management
The construction Of the telephone along the
line of the canal the cost OF which, it is
charged, was an unlawful diversion of reve-
nue., which should have been paid to the bond
holders, was, it appears TO US from the testi-
mony, II reasonable expenditure for great
convenience, tending directly to preserve the
existence Of the canal by alfording means of
of giving immediate notice OF breaks and
leaks, which, it not quickly repaired result
in great damage and Interruption of business
The proof fully explains the dangerous de-
lays and difficulties attending the former prac-
tice of sending notice of leaks By messengers
to the nearest superintendent, and The saving
which is accomplished by the speedier method
and the proof also shows that with the use OF
the telephone less number Of supernle end
ents is required, which results in a considera-
BILE saving of annual expense.
We come now to consider misappro 2ri-
alton Of income, which the proof does fully
sustain, aud that Is the payment from the ca
nails earnings Of extravagaut hotel bills, in
CURED by the presiden. and directors, and
charged by them TO the corporation without
warrant and authority. These bills, SO far rs
ascertained and proved, amount for the four
vaa re from 1874 N h.
items show that the charges are for the per-
sonal expenses and extravagant entertain
ments OF these officers and indicate certainly
a disposition on their part 10 use their official
position for their personal qualification in
disregard Of the creditors they were appointed
to protect--conduct in the managers OF an in-
solvent corporation well calculated to excite
suspicion aud distrust with regard to the fde-
ity OF their general management OF its con-
Germs. The excuse offered, that it had been
for years the custom OF the directors TO extend
such Inequalities" at the expense Of the ca
nal, Is, OF course, no defense of SO unwarran Ia
BILE an expenditure of creditors money, and is
. some proof OF the averment made by the com
plainant, that years OF abuse have sanctioned
methods ofconducting the affairs of the canal
which waste lis revenue and deprive them Of
money which should be paid TO Them. Bat
while it is true that these proven bills do tend
to excite distrust, they do not actually prove
anything out themselves and are not in them
selves sufficient to Justify the costly machinery
Of Il receivership. The complainant further
charges that the conduct Of the president and
directors in Obtaining the pass &c by the Leg
islature ofMaryland oflhe act of 1873, author
izing the corporation to issue $500, 900 Of re-
pair bonds was without actual necessity, and
as il endangered the security Of the complain
Of a. .l
by the corporation. The passage of this act
was procured by representing to the Leg.
islature the dismantled condition OF the canal
caused by the extraordinary food of 1877 and
the impossbity OF raising moaey on the re-
pair bonds authorized by the act Of 1874. At
torneys who were the representatives and
agents of The complainant, acting In his be-
half before the same Legislature and ia re-
speci TO the bonds he now sues upon, were
also at that time attorneysof the corporation,
employed to assist 10 procuring the passage Of
the act Of 1873. That any deceit was practiced
upon them by officers Of the corporation, as TO
the real condition of the canal or its finances
we have no reason 10 believe; and IL with
knoNledgc OF all they now know, the agents
Of the complainant were satisfied themselves
aud endeavored TO convince others that the
act OF 1873 aud the issuing Of the bonds au-
thorized by It was n WISE necessary and benz
eiicial measure, surely the complananrs pres.
enl claim to be protected from The corporation
because OF lis acceptance Of that act u hot an
argument which adds any strength TO his case.
Without more particular statement Of the
reasons which have brought US TO the conclu
sion, IL suilices TO say that after full con-
sideratiou ofiha able presentation Of the whole
case, we ind most Of tho material avorments
Of the bill unsupported by the testimony, and
those which are prored are not, In our judy
nent, such as 10 justify the exercise Of that
Judicial power Which would put into The
hands Of an officer Of the court for an indeh-
rite liule the management Of a quasi-puhlie
work attended With unusual risks aud unoer.
laiuties We do, however, find that the com
piainant and those who hold bonds similar tn