The Portland daily press., 1885-07-10
THE GREAT BOND CASE.
The Court Refuses to Reopen the
Case.

Case.
The Press yesterday morning referred to
the case in the Circuit Court, known as the
great bond case. A description of the case
was published some two years ago, but as it
may have faded from the memory of many
of our readers, we review it here with the
additional points made by Mr.. A. McNichol
in his opening argument yesterday.
The European & North American road
was originally in two sections. The road
from Bangor to Vanceboro was known as
the State of Maine line, ana from Vancebo-
boro to st. John was the Province line. A
mortgage was given ON each section of the
line. On the section from Bangor to Vance
boro, two mortgages were given. One was
for $1,000,000 which was upon the road from
Bangor to Winn. This mortgage was to the
city of Bangor, and is known as "the city of
Bangor mortgage" Then there was a sec
ond mortgage given subsequently, for $2,-
100000, covering the road from Bangor to
Vanceboro. This mortgage is known as
''the land grant mortgage" The two sec
tions, while forming one road, were run by
two separate sets of officers down to 1872,
when the two sections were consolidated,
and the road was known as the Consolidated
European q North American Railway Com
pany. Articles of agreement were drawn
up and signed by the directors of both sec
tions, and this agreement of consolidation
was ratified by the legislature of New Bruns-
wick
About the 1st day of December 1S73 the
Of -
whole line, under the consolidation agree
ment and act, and continued in possession
until Oct. 9th, 1875. Under the act of con-
soiidation, the company was authorized to
issue bonds to the amount of $6,000,O0o, to be
secured by the road-bed, stock and fixtures,
and upon one million acres of land granted
to the company, this covering the entire line
from Bangor to st. John. They issued but
$1,000,OO0 of bonds and these bonds were Sc
cured by mortgage. The bonds were
known as ''The Consolidated European &
North American Railway Company 6per
cent gold consolidated first mortgage sinking
fund bonds" The company sold these
bonds to various parties in England and the
United States The mortgage to secure the
payment of these bonds ran to Samuel f.
Hersey and Benjamin E. Smith as trustees
Mr.. Hersey died in February, 1875, which
left Mr.. Smith the only trustee
The Consolidated Railway Company took
| possession of the road December, 1872, and
managed it under their act of incorporation
until Oct. 27, 1875. Then Mr.. Smith, as trus-
tee, took possession of the road and manag-
ed the whole road from Bangor to st. john
down to Oct. 3 1876.
Oct. 3, 1877, Hamlin and Hayford who
were trustees of the So, 100000 ''land grant
mortgage gave notice of the foreclosure of
that mortgage. The bondholders, under the
consolidated mortgage, it is claimed were
ignorant of this foreclosure, as complainant
claims. The Consolidated Railway Compa-
ny, when organized, decided all this property
to Smith and Hersey, to float the bonds. The
mortgage was for Sc, GOO
Mr.. Smith left the State and made Noah
Woods his agent. Mr.. Woods had, as com
plainant claims, acted as Smiths agent dur
ing all the time of his trusteeship. After
the death of Mr.. Hersey an application was
made to have co-trustee appointed, but the
application was opposed by Mr.. Smith. The
application was granted, and Hon. Edward
Cushing of Camden was appointed co-trus-
Jet, DuG OlnlbL, lOI several nlODLlS, refused
to recognize him in his official capacity
Hamlin and Hayford took possession of the
road in 1876, under the "land grant mort
gage" They then negotiated for the pur-
chase Of Smiths rights as trustee. He re-
fused to enter INTO any negotiation, it is
was paid over to him. Mr.. Smith afterward
sold out his interest as trustee for $4,000, all
of which, it is claimed, the bondholders I'M
der the consolidated mortgage were ignorant
of.
This bill in equity alleges that these par
ties acted in collusion, and that the fore
closure made by Hamlin and Hayford is
void, and ask to have the same set aside
After Mr.. Norton brought his bill, Edward
B. Pillsbury, who was the owner Of some of
the bonds, filed a petition, asking to be al
lowed to join as complainant, and Mr. Nor
ton not objecting, the request was granted
In the United States Circuit Court yester-
day morning the suit came up, brought by
Marcus +. Norton Of Boston, trustee, COM
plainant, against the European & North
American railway, the Consolidated Eu-
ropean u North American Railway Com
pany, the Maine Central Railroad COmpany.
Hon. Hannibal Hamlin, William B.Hayf ford,
Noah Woods, Edward Cushing and Benja-
min E. Smith, defendants. The complain
ants counsel were Hon. Wilbur f. Lunt and
Clarence Hale, solicitors of record A. Nc
Nichol, of counsel, and Fl. d. Hadlock, of
senior counsel.
tOs
355 is to recover possession of the European
q North American railroad under the first
mortgage bond; bill BOG is to recover the
damages for the alleged unlawful possession
and use of the road, and damages upon the
real estate covered by the mortgage. The
first motion presented yesterday morning
was to have the bills taken pro confessO by
Benjamin E. Smith, one of the defendants.
After Mr.. McNichol had concluded his
argument, Hon. ]. H. Drummond argued in
opposition to granting time to Mr. Norton
for the purpose of taking testimony or other
WISE He said that the time had been eX-
tended over and over again at the request of
Mr.. Norton. Hon. w. l.. Putnam followed,
opposing any extension of time. Mr. Had
lock argued that time should be given He
| asked for extension at least to the next rule
| day, with right for more time if necessary,
in which to take testimony by affidavit or
otherwise.
Judges Colt and Webb ordered that the
motion to reopen the case be denied unless
complainant by affidavit shall show good
cause.
Mr.. Pillsbury is now represented by his
solicitors, Walker & Brandeis of Boston
The respondents are represented by Hon.
! William L. Putnam and G. P. Stetson, who
! appear for the European & North American
| railway, and Hamlin, Hayford and Woods
and by Drummond & Drummond for all the
| parties, except Smith and Cushing Mr..
| Smith has been served with a subpoena, but
| has not responded. Mr.. Cushing appears
| per Sc. The Maine Central is made party
| by reason of being lessee of the European
| d North American railway
|