Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-02-28
PLACERvILLE AND SACRAMENTO VALLEY
RAILROAD.
Suspension Of Railroad Communication
from Folsom to PlacerYiIIe.


On Friday last it was announced at the
freight depot of the Sacramento Valley Rail-
road that no more freight would be received
for Latrobe and Single Springs. Inquiry
as to the cause of this suspension of business
revealed the fact that all rolling stock would
be withdrawn from the road in question and
that hereafter the line would be operated no
farther than Folsom. Calling upon General
Superintendent Wright for an explanation of
the cause of this suspension that official per-
mitted us to copy in full his official instruc-
lions from the President of the company, as
follows:
SAN FRANCISCO, February =, 1881
Superintendent Of the Sacramento and Placer
eHle Railroad Company:
Dear Sir: Accompanying this you will
find an order requiring you on or before Feb
ruary the 18th instant to withdraw all the
rolling stock, equipments and material here
tofore in use in operating so much of the rail-
road Of the Sacramento and Placerville Rail-
road Company as lies between the town of
| Folsom, in Sacramento county, and Shingle
Springs, in Ell Dorado county (via Latrobe),
and to deliver possession of the roadbed and
Louis McLane, who has been appointed Re-
ceiver and directed to take possession thereof
by an order of Court in an action now pend
! ing in the Superior Court of this city and
county, Department No. g. in which Mr..
McLane is plaintiff and the Placerville and
Sacramento Valley Railroad Company and
the Sacramento and Placerville Railroad
Company are defendants.
Realizing the serious injury and inconveni-
ence which the execution of this order will
occasion to the travelling public and to
mechanics of this section of the
State, who have heretofore depended and
must depend upon the Sacramento and
Placerville Railroad Company for their means
| of communication with Sacramento, San
| Francisco and tide water, deem it proper,
| for your and their information, to state the
facts which have led to this interruption of
their convenient and necessary communica-
ton by rail with the points named.
The Placerville and Sacramento Valley
Railroad Company was organized in 1862.
In 1864 it undertook to issue bonds to the
amount of $780, 600, and to secure them by a
mortgage OF Its future income to Louis Nc
Lane and Danforth n Barney, as trustees
for the holders of such bonds. The COM
psny had not then, nor has it ever since had,
any rolling stock or other equipment for
operating its road or for the transportation of
passengers and freight. In the year 1869 the
company made another mortgage of all its
property to Charles L. McLane as trustee
for Wells, Fargo & Co., to secure the pay
ment of its promissory note for 5000, 600 and
interest at the rate of 10 per cent. per annum.
1t paid no interest on any of these obligations
and in the year 1871 the mortgage last named
was foreclosed, by action brought in the name
los Hhnrl oT -
| judicial sale, William Alvord became the
purchaser of the road-bed and right of way,
and continued to hold it as the trustee of all
| the creditors of the Placerville and Sacra-
mento Valley Railroad Company, until July,
1871, when, as trustee of all the creditors of
the corporation, and by their direction, he
sold and conveyed the property purchased by
him, under the foreclosure proceeding, to
MIR. Hun tington, Mr.. Hopkins and myself
for the sum of S166, 400 in gold coin of the
United States. AS we understood it, this
foreclosure and sale were had pursuant to an
arrangement entered into between Wells,
Fargo & Company and the holders of the
mortgage bonds, issued as have stated, in
| 1864 and the proceeds derived from the sale
and conveyance Of the property to us were APP
propriated to the payment pro rata of all the
creditors.
When we purchased the property, it was
| upon the assurance and distinct understand
ing that the property was thenceforth to be
| free and clear of all incumbrance and liability
by reason of any acts of the Placerville and
Sacramento Valley Railroad Company, and
especially from the lien of the first mortgage
bonds. We took the property in good faith,
and in the honest belief that we had acquired
the title to it free and clear of all incum-
| brance and that all its bonds and obliga-
tions were, with the money furnished by us,
to be retired and paid. We subsequently
conveyed this road-bed and right of way
so acquired to the Sacramento and Plac-
erville Railroad Company. which has
since operated the line from Sacramento to
Folsom, from Folsom to Single Springs, by
way of Latrobe, and making one line from
Sacramento to Single Springs. j. p Rob-
inson, who, as we understood, was provided
for in the arrangement, and who, through
his brother, l.. l.. Robinson, received his pro
rata of the money furnished by US. subse-
quently commenced suit to compel Louis
McLane to execute the trusts imposed upon
him by the first mortgage. This action was
commenced in the year 1867, and has ever
since been pending. In this action Mr.. Rob-
inson claimed to be the holder of Ill bonds.
His action was defended against by Mr. Nc
Lane upon the ground that his claim was
fully paid and discharged, and we are in
formed the evidence already taken in the case
fully demonstrates that fact
In the year 1877 Mr.. Louis McIane COM
menced an action against the Placerville and
Sacramento Valley Railroad Company and
the Sacramento and Placerville Railroad
Company, in which, as the alleged trustee for
the helder of ten first mortgage bonds, he
sought to obtain possession of the property
of the Placerville and Sacramento Valley
Railroad Company, by reason of its alleged
Iafo null in fha 49, h.
the first mortgage bonds, and obtained an or
der requiring the defendant to show cause
why Receiver should not be appointed to
take, hold and operate the road during the
tendency of the action. This application
was not decided until December the Dist.
1879, when the District Court of the Eff.
teenth Judicial District, in and for the city
and county of San Francisco made an order
appointing MIR. McLane the Receiver of the
road. unless the Sacramento and Placerville
Railroad Company should within fifty days
thereafter pay the principal and interest of
the bonds referred to in his complaint. These
bonds were ten in number, and the amount
required to be paid under this order would
then have amounted to about 5000
Under advice of our counsel, proceedings
were instituted in the Supreme Court to test
the jurisdiction and power of the District
Court to make this order. These proceed
ings resulted in the affirmance by the Su-
preme Court of the order of the Court below,
and in November, 1880, the Superior Court
of the city and county of San Francisco, De-
partment No. ), acting as the successor of
the Fifteenth District Court, made an order
requiring Mr.. McLane, as trustee and re-
ceiver, to take possession of the property of
the Placervile and Sacramento Valley Rail
road Company, and to perform the duties
devolving upon him as trustee and re-
ceiver according to the terms of the
order of the Fifteenth District Court.
Fully realizing that the execution of the or
der would involve the suspension OF travel
and the use of the road by the public, we en-
deavored 10 obtain modification of it, SO
that security might be given in some satisfac-
tory form and ample for the protection of the
parties represented by Mr.. McLane, pending
the defense of the suit, which we proposed to
make in good faith and for the purpose of
the me Pnn5 so OF payment and
other questions involved in the action, We