New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1886-12-08
a WABASH DECISION.
JUDGE GRESHAM ON THE RECEIVERS
CRIrsING MEssRs. GOULD. SAGE, DILLON AND
HUMPHREYS NEW RECEIVERS TO BIZ AP-

CHICAGO Dec. Judge Gresham In the United statss
Circuit Court for the Northern District Of Illinois, to-day
gave adecision in the Wabash Railway Recevershp case
He was severe the receivers and the methods they
had employed In the management OF the system as well
as upon various other prominent owners Of the road
after viewing the history OF the and the action
taken In the court in St. Louis in appointing Scion Hum
phreys and Thomas f. Tut receivers. he said
Bs. IN behalf Of himself and other Dondnodsr; % Ss Of & the
IcSs sns & A. S SnS1 q s e1hS ssrg Sa ali the
awav property in this state was taken into custody Of
ts court The mortgages 1857 and 1879 aud The Chicago
amounting sS7 900 Ooo upon which nearly and
% &usns a"s Tn %
%s sss mas "'
- o whS6 dS left after making far dsusoR os
ncnremuneratve system In the two suits
which have been brought here the Court asse to remoSe
Trustworthy person in their place.
Judge Gresham severely criticised the procedure under
which the receivers were appointed. He said:
II was claimed that the Missouri Pacific was not ab'e to
clause the as s' notice a. sTsn to Ito
, @ t6e 5 esse nd ssaned loss In the h
gsgsT oang
Sidney Dillon and Russell ssre we're liable as norserS on
al THIS All With the eIsspoD psThaSRs Ss SI H%m
Pacific or the Iron Mountain Company and AL including
as on the "utsan%ing notes They resolved
TSr a oGf @ s %ds stda a @ % iii
that Che Wabash operated nnter the lease to
pany filed ITS petition renresentng that ITS promlsoiy notes.
which would soon matnfe that these note, by
suniry individuals OF high credit and financial standing
Judge Gresham said the name OF soOn Humphreys was
disclosed OF the ndOrser but the names OF Could
Dillon and Sage the three other ndorsers were withhed
becanse Of the personal Inconvenience and injury which
might result 10 them from the publicity thereby gwen 10
their business affairs"
Judge Gresham reviewed efforts Of the purchasing
committee to reorganize the company and place 1t on
basis and indicated that the committee had signaly
failed in all of its and that there was now no
probability of its succeeding in putting the corpora
ton foundation. He severely criticised the
of the purchasing committee in obtaining certain
orders from the st. Louis court authorizing tne receivers
the earnings the paw coupons of such
bonds. the holders OF assented to the plan pursued
by the committee for the reorganization OF the oa whe
coupons of other bonds were ignored and lett unpaid
The said that the order advcrted to- taken with the
S400O000 floating Indebtedness OF the Wabash Company
had been held s menace over the heads OF honsssens
ing bondholders measure OF coercion by the purchs
ing committee. He added:
The orders were obtained by the purchasing committee
orders so far chanre the terms Of the sale and me orders o
crver. which The underlying MORTGAGES 10
who asseDted to the funng scheme; whe the same night
esed TO m M aa amount
Ing to sl,OO0OoO against the nonsssentng OonlhodeT,
denying equal bondholers secue by the same
y M pescrs e" S R IN court q equity
to lSe the earnings of road coveIe by mortgage ana pay
coupons by and falling Se
orders not frank 10 ayowng TO the court at at
has been GHs ' IN hi. pT
safe to That no one knew better at OF before the s @
ossers Tepressstea s Sy the purchasing
Day Ie % @ GSe % pSRsSs %Rs 81 Rwa7 sS Te
, my va, t 600 which S ws dS ss mops IL &
Charles Raseey TcOr % in d1, hs NSaSsnv %aSsn Cont
Soes Say NOT %s'' appear rom the
Ss sis n paid SS the to o
~ to wnen sTs %Ss s" Ss eens to Si &o
or aaS sS fs 5 a sppe "1 was too o%
~ % @ tons n d'a9s reo. :, e esGh the
benefit that
T int s 5 s eS%t's s az 81 and Ios s0 a"S T
appointed receivers it acquired paramount
jurisdiction the Wabash property and throqshout
ing crgitor. whose bonds are secured by senior
% %sSa G %u PSSy s 70 at Rat'
rights and n. AMI that no her court can re1pre o co ns
st Louis aGgre LEGAL % " ,o s WaSas s on o c
1% M, tnGt h eSp od IN e e6St ,a lake * m ew Is
duty and the law Eases may be found which English
courts have appointed receivers over properly & or e @ 81,
done only when the partrs ters;ted IN the property were
Judge Gresham decided that he had jurisdiction for the
that the bulk of the property covered by the mort
cages In question chiefly in this district and that
proper showing had been made benaf of the mort
cages for which foreclosure was asked lie hclu thaU
they should be forecosed and the present receivers
moved. Leave therefore given TO the m0rtgagn
bondholders OF 1862 and $40 Tile u hill IN the United
states District Court at Springfield asking for receiver
for the property Ii was heo that the application Tor the
appointment OF receiver for the Chicago division OF hc
system could be filed here and would be entertained.
They were it was held entitled such receiver and their
case from the showing made was good
The decision a complete surprise to Wall Street ana
at the Stock Exchange prices Of the Wabash stocks
.ell AMI per with precipitation There was
partial recovery before the close but the declines were
substantial soon Humphreys one Of the receivers OF
| the Wabash Company who are deposed by the decision
from the OF the lines east or the MISSISSIPPI
River. said that had in ornation beyond essaSe
from the companvs counsel giving the result OF the decs
ion lie opinion that the REORGANIZATION OF
the company would not be hndered seriously Dy tne a
ton of Judge Gresham, for the general mortgage pond
holders had plain right TO buy the separate property
1t sold under foreclosure or to discharge the claims
by payment of the interest which the bondholders nai
been trying in this In regard 10 tne per
sonal illusions which stated had been made III the
opinion Mr. Humphreys said that the Judge ad mate It
serious blunder.