Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1885-04-30
THE FOLSOM ROAD.
Leading Points in the Decision Of the
Supreme Court.

Leading Points in the Decision OF the
Supreme Court.
The Supreme Court has decided the long
Irrigated case of McLane vs.. The Placer
vile and Sacramento Valley Railroad Com
pany, and the Sacramento and Placerville
Railroad Company. The decision occupies
nearly four columns Of nonpareil type in
the San Francisco Bulletin. The following
condensation covers all the points and
clearly sets forth the present condition Of
affairs:
An action was brought on mortgage secur-
ity, executed in 1864 by the PiaceryiIlc and
Sacramento Valley Railroad Company to
secure certain bonds. The road runs from
Folsom to Single Springs. 1t was subse-
quently purchased by the Sacramento
Valley Railroad Company, whose road runs
from Sacramento to Folsom. This latter
company resisted the action against the
iirst-named road on the ground that the
road was burdcned by the debt without due
authority. This point the Supreme
Court now oyerrules, and holds the
mortgage to. be valid. Louis Nc
Lane, as trustee for the bond
holders held the mortgage and had power,
in default of payment 1OI Il year, to take
the road and collect its revenues, and the
successors of the mortgagor were bound to
offer no resistance McLane, as such trus-
tee, sued for the road and the Superior
Court found him entitled to its possession,
and appointed him its Receiver. This
order Of Court the Supreme Court holds to
have been proper, for the suit Of McLane
was not to foreclose mortgage but to
enforce the specific execution of the terms
of the mortgage. So all the
subsequent orders of the Superior
Court relative to the Receiver were without
error, says the Supreme Court But McLune
having the road, had no cars to run on it,
nor motors to draw cars. The Superior
Court III April, 1881, authorized him to
lease the road, or to expend $4,000 in
stocking il, and to raise the money gave
him power to mortgage the road and pledge
its earnings. The Supreme Court says this
was proper order. McLane spent So
35G 26 in stocking the road ]. q. Kittle
was holder Of bonds of the road secured by
the mortgage trust to McLane. After issll-
ing the bonds, the company borrowed $500
900 of Wells, Fargo IL Co, and gave
mortgage on the road. Wells, Fargo d Co.
foreclosed, and William Alyord bought
i'll the property for $166.40o, and he
sold ii to MessIs. Huntington, Stan
sold it 20 the Sacramento and PlacervilIe
Railroad Company "a new company formed
to operate both roads,, they being the chief
stockholders. The F. and s. V. 4. r., since
the sale to Alvord has been insolvent and
had but a nominal existence II never had
any rolling stock. The Superior Court or
dered the mortgagcd road turned over to
To McLane; that he have lien upon it for
so, l56 %, money due him, and that the
road be sold, if necessary, to pay it; that
the proceeds OF the sale be used to pay the
Receiver costs, the So, 600 of bonds held by
kitle, with interest, and that any balance
be paid over to the Sacramento
and Placerviile Railroad Company.
The Supreme Court finds no error III the
superior Court allowing McLane his ex-
penses IN stocking the mortgaged road,
because to preserve any value in it, it was
necessary to operate 1t. 1t was the only
way 70 render the security effective. 1t was
proper, too, TO order 4 sale Of the property,
for the nlOrtgagor was insolvent and the
other mortgage purchaser declined to dis
charge the interest; the trustee could oper-
ate the road only at a loss, and had no
money for repairs. The only resort, there
fore, to save anything to the bondholders
was to a sale. The judgment of the Supc-
rior Court IS therefore affirmed