The Portland daily press., 1884-03-25


Supreme Judicial Court--In CHancery-Be-
fore Judge Walton.
Weston f. Milliken and others In equity vs..
The Portland & Ogdensburg Railroad Compa-
ny and Philip Henry Brown and Luke p.
Poland.
The hearing on the bill in equity praying for
the appointment of receiver for the Portland
q Ogdensburg railroad, wa begun in the SUI
preme court, before Judge Walton, this morn
ing. Hon William L. Putnam appeared as
counsel for the trustees, the complainants in the
bill. Hon 7. FL. Haskell appeared for the cor
poration and City Solicitor Looney in behalf Of
the city. Mayor King was also present. In
the court room were number of prominent
railroad men and AL the principal officers Of
the Portland and Ogdensburg road.
Mr.. Putnam in his opening remarks, said
that the construction OF the road was begun in
the summer OF 1858; that it was chartered for
the purpose of securing through line be-
tween Poit an.i aud the West. The legisls-
ture of New Hampshire passed an act author
izing this corporation to construct its line
through the State of New Hampshire to the
Vermont line The decisions show that this
court, exercising jurisdiction over the domicile
of the corporation, may appoint receiver for
the whole road although it runs through a
State out of the jurisdiction of 'he court.
Having secured these charters the road was
constructed from Portland to North Conway
and perhaps to the Bartlett line, distance Of
81 miles, and on November 1, 1870, the COM
pany executed NOR tgsge to trustees upon the
81 To-
cure bonds to the amount of $SO0,O00 arc
that is known as the first mortgage. In 1876
or 1877 the corporation defaulted on its con-
pons on the first mortgage and an arrangement
was made by which the coupons on that mort
gage for two years amounting to $4,000, were
funded into scrip, payable by installments.
The last installment on that scrip has become
due and has been paid, except about $1,000; SO
that since 1877, this corporation has paid out
Of its earnings, at least SS7 900 of that scrip,
besides the interest upon it and that is one i'm
portant fact which tends to account for the
condition of things today.
After completing the division to the Bartlett
line, the corporation was desirous of building
the road through the mountains to the easterly
line OF the State of Vermont, there to connect
with Western roads. To accomplish that pur-
pose they put upon the road the second mort
gage nominally of So, 100000. 1t is called the
second mortgage, although it is o first mortgage
on large part of the road. OF this mortgage
$500 900 of bonds we're reserved for the pur-
pose of taking care of the first mortgage. The
remaining bonde, amounting to $2,000,0O0,
have been disposed Of S1,350,0Oo being now
owned by the city Of Portland.
With the aid of these bonds the road was
constructed from the Bartlett line to the East
hue of Vermont, except the gap from the Fab
yam Honse to SCOTS mills, whore the Boston,
Concord s. Montreal track is used.
To 1877. after the track was thus constructed
and put in operation, the City Council made an
investigation Of the affairs of the road and
sent Colonel Wildes over the line to report
upon its condition. A copy of his report will
be exhibited to the court, and he will say that
since that report was made he can see that
improvements to the extent of $150000 have
been put on the road. There is no doubt that
the corporation has spent upon the road more
than that amount, but that is what the trus-
tAas can show has been expended and what IS
plainly visible to-day.
brought by the trustees under the second
mortgage, and Weston f. Milliken and Samuel
e. Spring being trustees under this mortgage
aud also under the first mortgage, it left the
first mortgages represented by Philip III.
Brown alone. Before any decree appointing
receiver was made he should require Mr.. Mil
liken and Mr.. Spring to sign paper 10 their
capacity as trustees under the first mortgage
together with Mr.. Brown, consenLing to The
appointment OF such receiver.
Mr. Putnam continued, saying that he
should show by testimony that il was expected
repairs to a considerable amount would be re-
quired the coming season, but that nothing
Was apprehended like that which has since oc-
Cured; that on account OF the peculiar seas
on be past winter and of the unusually heavy
traffic over the road over twenty miles of the
road have completely broken down and require
immediate attention and care. Mr. Putnam
read a list of the accidents which have occurr-
ed since February g. about dozen in all, oc-
casioned by the breaking of rails. The track
for twenty miles is worthless. A speck ap-
pears upon rail in the morning, and the next
day the rail crumbles to pieces. These rails
have been laid for dozen years, but their con-
dition is the result of some unsuspected fault
in the iron, developed by the protracted cold
of the last winter, To put the track in safe
and economical condition it should be relaid
with steel with the exception of about fifteen
miles now laid with STEEL To do this at the
present price of stee rails which is very favor
able, will require an Outlay OF about one hum
dred and forty OF fifty thousand dollars. In
addition to THAI, some of the bridges require
rebuilding the coming season, requiring an ex-
peuditure of thirty-tive thousand dollars. 1t is
also necessary that the road should have two
aew locomotives aud that the company should
be provided with Car and repair shops upon
the ground the company has purchased for
that purpose, which will involve an expendi-
ture of thirty-fve thousand dollars.
The whole amount now due on the first
mortgage coupons is thirty-tbree thousand dol
lars and the amount coming due the first of
July will be twenty-four thousand dollars,
making fifty seven thousand dollars. The
principal is $500 900, no portion OF which is
due. Then there are some car lien notes per-
haps to the amount of ten thousand dollars
which should be provided for the coming seas
on.
The net floating debt, and the pay roll of
the corporation, after deducting the available
assets of tue corporation We ask shall be paid
from the earnings of the corporation when
they can so be paid; that the matter of the
Car shops shall stand until the further order
ot the court although it should be provided
for.
In other words We propose to ask the court
TO make a decree only for SO much as is neces-
sary with reference 10 the interest OF the prop
cry; and so far as the issuing of certificates is
concerned which can affect the title of the
first mortgage bondholders we ask the court to
issue certificates onlv for what will 60 to in
crease the value of the property they hold as
security for their debt, and the whole will
amount to about two hundred aud fifty thou
sand dollars. So far as the floating debt is con-
cerned think the earnings of the road will
amnlv and fully take care of that.
Now there are two other points to which /
desire IT, call your Honor's attention. / have
tilsd In Jno CIrouiJ Court for tho disJrfcJ or
New Hampshire where a bill is now pending
flied by some OF the bondholders under this
mortgage motion for that court to confirm
the action of this court, and l propose in the
decree to make such reservation touching
that point as your Honor will think courteous
to the court sitting in that jurisdiction.
Mr.. Putnam then read the proposed decree
which the court would be asked to sign, pro-
viding that the receiver shall from the earn
Jugs make only the ordinary repairs on the
road, and if anything remains he may apply
the same to the payment of interest on the
mortgages The receiver to issue certificates
Of indebtedness not exceeding certain sum
TO be fixed by the court. The certificates to be
a first lien upon the road In the States of
Maine aud New Hampshire.
Judge Walton said: have no doubt of the
propriety of giving the road credit, and of
ontting it into good, safe, running condition.
suppose no one will claim that it is road to
be sbandoued therefore it must be put in
good, safe, running condition. 1t is duty due
to the public, as we'll as TO those who own the
rad, Such credit would supersede all other
credits. 1t would be 10 the nature of perma-
neut repairs upon the road and keeping up the
value of the property, but beyond that, in an
interlocutory proceeding like this, l doubt
whether it would be proper to provide for the