New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1886-10-25
FORCED To SELL ITS LANDS.
HOUSTON AND TEXAS CENTRAL's GRANT,
SEEKING TO AVOID FORFEITURE AND CoMPLICA-
IInxs XIIH LILLE


SEEKING TO AVOID FORFEITURE AND coMPLIcA
TIoSs WITH THE STATE OF TEXAS.
An important legal step has lust been taken in the
| tangled affairs of the Houston and Texas Central
Railroad Company. The company is now in the hands
of three receivers Charles Dillingham;, ~ s. Easton
and J. Rnoul the two latter being trustees of the
first mortgage. Various attempts have been made ia
reorCanze the property but they have failed because
OF the refusal of the bondholders to meet the demands
of the stockholders The bulk of the stock is in the
hands of C. p. Huntington and his friends The
bondholders refuse to scale down the interest to within
what the stockholders regard the earning capacity
| Of the road
| The company has a valuable land grant from the
State of Texas, covering over 100000 acres. by
the terms of the grant it provided that part of the
lands should be aienated in fourteen years from the
date the grants and part twenty-one years alter
The bondholders have supposed that the placing Of
the bonds in the hands Of trustees lawful and
proper alienation but recently the Attorney General,
under the direction of the Governor of Texas. has
investigated the matter and taken the ground that
442 sections of land in the possession of the receivers
must be sold before November 90 else they will revert
to the State Unwilling the risk OF the forfeiture
the trustees and the company have pettoned d. A.
Pardee United States Circuit Judge for the Fifth
Judicial District TO order forced sale prior to the
date fixed the limit of the holding of the lands
private dispatch received here Saturday announced
that the court had granted the petition
G. Clarke president Of the Thomas Iron Com
pany formerly OF the receivers of the Houston
and Texas Central Railroad. He said yesterday to
TRIBUNE reporter that he was ont OF the
property and knew little of its affairs. He believed
that tho conditions of the land grants required the
actual sale for settlement and occupancy within
certain limits which for part of the grants were now
nearly due. II this news to the bondholders u
should not have BEEN He had heard that sale Of
the lands had been ordered to protect the cOmpanys
title to them and he supposed there would be CON
test it between the boudhoders and the stock
holders. " | wish you would say for me-" added Mr.
Clarke emphatcalv, that If these parties keep on
their litigation there will be nothins lett in a few
years but what the lawyers get. tried hard last
year to bring about compromise. Mr. Huntington
put his interests in my hands and offered to the
bondholder 8, IL and IL per cent interest, ac,
years of the first mortgage bonds, which are due IN
1891. The bondholders wanted 6, 5 and per cent.
When they assured that they would get the assent
OF all holders accepted their Offer They seemed
nightly pleased. but the first thing that followed was
demand by the second mortgage bondhoders OF
per cent believe only half Of the bondhoders have
ccpted the scheme Of compromise l am through
with it,"
Here is the text of the petition of the Houston and
Texas Central Company In which Trustees Easton
and Rntoul have joined
The petition, ETC., respectfully shows:
That under order OF this Honorable Court rem
dered in the above the trustees against the
Houston AMI Texas Centrall all the unsold lands
granted by the Stae OF Texas your petitioner have
been placed in possession of the receivers appointed
by your Honors in this cause That the State OF
Texas claims that under and by virtue OF the prOv
OF the laws unde: which the grants were
made and accrued, your petitioner is under the
obligation to ALLEVIATE one half OF the lands acquired
fourteen years from the date OF acquisition and the
other half OF said auds in twenty-one years from the
date OF acquisition and that ii these lands he uot
aenatcd otherwise than by the trust deeds already
made respect of them and by absolute sale OF the
title OF the company within the periods. aforesaid that
they immediately forfeited TO the Stale oil Texas
and are open survey and location ~ other lands.
That your petitioner is informed and believes that
the officials Of said State claim that 442 ~ sections
u land now in the possession of saii receivers n
aforesaid mnst be sold before the Goth day OF Novem
bcr 1856 that foreituIes said state will accrue
under the provisions OF said acts aforesaid That
petitioner is advised by counsel that said Chains Of
said officials unfOunded and cannot bc maintained,
but that your petitioner has been notified by tue Gov
of the State OF leIas and by the htorneyGcne
raj thereof that 1t il their intention to insist
said claims and to take such proceedings NAV be
forcing such rights the State may hav- III the
premises and that the ale ged claim of the State has
become and made waiter of public notoriety and
any adverse action which it may in future take based
upon such claims will throw cloud upon the title OF
the lands after said 10Th day OF Novem
bcr and will materially affect the sale value of the
same unless the title of the company thereto shall
Iave been sold before said date and that your petit
toner ia advised that the sale of oil its ri shts, title
and interest in to said lands before SAID date will
avoid grave com plicaton> with the State of Texas
That is therefore of CHEST Importance your
petitioner that sale OF all its rights, title interest
and said lands be made ioIthw tn, and suggests
that the same should be made subject to all existing
trust deeds, mortgages. judgments and ncumbrances
thercupOn.
Wherefore your petitioner submits the premises to
your lonoIs and prays that your HnnOrs will author
lze and direct such alienation OF said lands make
such other further order in the premises Justice
and equity mny Ieauirc