Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1882-07-19
Decision In the Central Railroad Case.


The following Is the full text OF the decision in
the case
J. r. Ldngdon ct al Us. Vermont Canada rail
road company ct a.
The decree Of the court OF chancery Is reversed
and remanded to that court, with directions to
cause the accounts OF the managers OF the trust
property, from the time the trust was created by
decree OF the court In 1861 until the present time
to be settled, and all equitable assets ascertained
and applied also that the managers in possession
Of the property be required TO file and settle their
accounts at frequent stated times 80 that the
dition OF the trust may be readily ascertained at
any given time. II Is adjudged that all debts
and liabilities OF the receivers and managers that
accrued in the legitimate administration OF said
trust and Indebtedness OF the managers that ac-
crued in transactions that were requested, sane
toned or agreed to by the primary parties, az the
proper debt or duty OF said management are
lien and should be made charge in the nature Of
an equitable mortgage upon the whole property
which Is the subject Of the trust, including the
Vermont Central railroad and the Vermont 4
Canada railroad, their privileges and appurte-
nances, also including the franchise to operate
said railroads. and all property, claims and assets
pertaining thereto, in the hands or possession Of
said managers, superior to the claims Of the YER
mont Central railroad company, its mortgage
bondholders and the Vermont & Canada railroad
company, and In consideration of the fact that in
case the defendants redeem the said property by
the payment OF the aforesaid indebtedness, con-
tlllullUR u lien OF charge thereon, rs IN
this decree is established there may then exist no
occasion necessity for the enforcement OF the
rights, liens and prorities, az between themselves,
OF the holders of said Indebtedness 1t is deemed
unnecessary to ascertain such rights and prorities
at the present stage Of the cause; but the same
are reserved without prejudice for future ascer-
tainment and enforcement in this cause in case
there should be occasion therefor by failure of
defendants to redeem or otherwise; and this
cause Is to be retained and continued on the
docket OF the court for that purpose, and any
person interested in said rights, liens and priori
ties, also the Rutland railroad company, shall be
at liberty at any time thereafter to move the
court for the ascertainment and enforcement
thereof in this cause The court will at once adj
Indicate the exceptions to the masters report
upon the receivers and managers account prior
to the appointment OF the Central Vermont rail-
road company manager in 1873, and cause the ac-
counts of the Central Vermont railroad company,
as manager, to be settled at an carly day, and
cause all sums that are, or in equity should be- in
the hands or possession of said manager, to be
first applied in extinguishment Of the indebted
ness Of said recevership; and as this cause has
been long In court the court IL required by strn-
gent orders to exact the utmost diligence of
| the parties in settling and bringing to final de-
termination all disputed claims, and all equta-
BILE offsets growing out OF the administration
and management of said property. And when
said accounts are settled and all equitable offsets,
II any, are ascertaned and applied, the court will
pass decree for the orators for the residue Of the
| Indebtedness Of said receivers and managers, de-
claring the bonded debt, enumerated in the de-
cree OF the court of chancery in this cause, and
the floating debt" so called, and the Central
Vermont claim and the Grand Trunk claim as
found by the masters, and any and all debts that
| are found to have accrued In the legitimate adj
minstration OF the property, by the receivers and
managers, to be an equitable lien, or charge In
the nature of an equitable mortgage, upon the
Central Vermont railroad and the Vermont
| Canada railroad, their privileges and appurten-
| ances, including the franchises to operate said
rood and all In pntp a1air
and assets appertaining thereto, and to the re-
| ownership and management thereof, superior to
| the claims Of the Vermont Il Canada railroad
company, the Vermont Central railroad company,
and its first and second mortgage bondholders.
In settling the accounts Of the managers the court
will follow the rule that obtains in equity in re-
gard to receivers and managers of such property.
| The expenditure of funds for a reading room,
though proper charity, IL not legal accounting
for trust funds; also expenditures for the tram
way road in Canada, and perhaps the Missis-
| quot railroad and Northern transportation
company II allowed as charge against the
property, must find warrant for 1t in the consent
and agreement Of the primary parties, and is pur-
posely left open until all the facts shall be made
| to appear in the masters report. And the court
will further decree that the said several sums SO
ascertaned by the courts shall be paid by the de-
PENDANTS to the clerk of this court, for the benefit
of the respective parties who are creditors, with
interest, on a day fixed by the court as reason
able time; and that upon failure Of said defend
/ ants W lHdhe payment Ol shlu seNeTdl
above ordered to be paid, or any of them, at the
| time fixed, then the Vermont Central railroad
| company and the bondholders under the first and
second mortgages of the Vermont Central railroad
| and Of the Vermont & Canada railroad company,
and all the defendants shall be decreed to be for
| ever foreclosed and barred OF all right and title,
| interest and estate In the Vermont Central rail-
| road and the Vermont & Canada railroad, the
privileges and appurtenances perte lining thereto
| and to each Of them including the franchises to
operate said roads, and in all the equipment,
claims assets and property appertaining or be-
longing to said roads, or either of them as well as
| the receivershp and management thereof; and on
such failure the court will order all the defend
| ants to release all interest which they may have
| in such property to some suitable trustee, to be
appointed by the court, to hold the same in trust
for such trust creditors. The court will in its de-
cree give additional time for redemption to the
mortgage bondholders and the Vermont Can.
| ada railroad company, respectively, in the order
| named, so that each party in interest may have
opportunity to redeem in case of failure OF the
preceding party to do so. And as the court sees
no good reason why a final decree In the premises
| may not be made at or before the next regular
session of the supreme court in this county, to as
sure that end the court will make orders to the
| times of taking and filing testimony and making
report and the taking as confessed - matters OF
fact against parties at fault as to the court may
| seem Just and reasonable.
This cause is remanded to the adjourned term
OF the court of chanceIy of Franklin county to be
held at St. Adams on the 10Th of July, 1882
TIMOTHY Z. REDFIELD, for the court