Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1889-04-12
COUPLE OF MILLIONS.
RAILROAD cAsys TO THIS AMOUNT DE.
cInRD YESTERDAY.
Judgments Of the Supreme csurt OF Ap.
psals Ia tho shsnandoah-vsllsy
suits

The Court OF Appeals yesterday rendered
ns decision in what Is known as the Fideli-
ty Insursucc. Trust. aud Saie.Deposh Com
many against the Shenandosh.v Valley Rail.
road Company 81 oiS., upon an appeal from
The Circuit Court Of the city OF Roanoke.
This case involves three distinct branches,
and is one Of great importance. not only
from ibe msgniiude OF the interests involved,
hrt tiiom the questions arising.
THE COMPANY.
The eshensndosh-Vsle Railroad Company
wssipcorporaied by the Legislature, Of Viz.
e1nis. Wee, Virginia. aud Maryland The first
branch Of tsc road extended from Hsgers.
foWa. in Nary land, 10 Wsypesboro', IN Au-
glsfq county, Va. That portion OF the road
va comp,cted ab0ut the month 81 March
1851. tn0cr mortgage executed 10y the
company. dated April |, 1880, bonds 10 the
smcuni of S2270, 600 bad been iSssed and
sod, the proceeds Of which were used IN the
construction OF The said branch OF the rosd
from HaeerNoWn 10 WsyDesboro. This
mortgage provided by is terms that the is
sue Of bonds should not exceed $4,000 per
mile. and that the mOrig ige Should cover
any extensions OF the road that might there
slier be made. After ibe completion OF the
road TO WaVnes0or0' the company deter
mined 70 exleod Is 10 the city Of Roanoke, so
~ 10 mske a connection with the South and
Southwest. ana the great mineral interests
ol that region. Accordingly, on April 3.
1881, smother mortgage was executed.
known IN the proceedings as the "General
Mortgage Under tins mortgage bonds TO
the amount OF about $4,000. 600 were issued
and sold In the market, the proceeds
og which were used IN the cOnstr0c-
ton Of the road from Wavnesboro' 10
Eosnoke CITY, distance OF 90 miles. IL
il 10 he noted, however, that the Shcnan-
dosh.Nalev Railroad Company. uBder the
authority o. TIE fr-t mortgage OF April /,
1880, was empowered 10 issue iis bonds
from time 10 time as each mile Of road was
clmpletcd, the only Limitation being that
tDe issue should not exceed $4,000 per
mile. At The tine ihst the company exc.
c,1tod the general moFtgsge 81 ADril D. 1881,
II determined 70 issue a i.560 900 of bonds
under the MORTGAGE OF April ], 1850,
and 40 part thereof, and 10 deposit The
some as 0llatersl sccu-ity with the Fidelity
Trust Company of Philadelphia for the
benefit OF The purchasers OF the general
mortgage bonds issued under the mortgage
Of April .. ISL the 'biect OF this pro-
ceeding was 10 bold out inducements 10
pcrsons 90 invest IN the general mortgage
bonds. The shenandoab-Vsi Railroad
COMPANY ~ 1SsJ. belug unable TO meet
It's accruing and accrued interest on
this indebtedness, bin WAS tled
IL the Circuit Court az Roanoke Cty con-
VcBlug the various mortEage creditors ask
ing tor the appointment Of receiver and
the sale OF the rold. IN that suit contro-
ycrsy rose bebaeen the creditors claiming
under the mortgage Oi Apru !, 1880, aud
the creditors claiming under the mortgage
oi April 3, 1881, touching The right OF the
COMPANY 10 issue the 81, $50, 600 OF bonds Al
ready stated and 10 deposit Tire same as col
lateral security for the general mortgage
creditors. IDss was matter cf very great
importance. for II the fret mortgage credl'
tors could obtain 8 decree declaring the H.
sue Of Sl,j6O,0oO of bonds invalid ultra
t1re- Il would give them practically control
OF The ROAD and imp9rt The highest value 10
the bonds held boy them. II, on the other
hand the general mortgage creditors could
succeed ia maintaining The validity OF
the Sf5C0,OOO Of b0nds il would
rive them trust security pan
paSstt with the trsl-mortgage creditors
over the entire line Oi road and, 10 that ex-
tent give great value TO the general mott
gage bonds.
TIE LOWER COURT.
Judge Henry r. Blair, ot the Cir
cut court ot The city OF Roanoke, was OF
o0inion and so decrecd that the general
mortgage llf aNl0 N'lf 'itlAtNA ~ AHN "
curitv of the a 100000 bonds From that
decree an apDcal WAS taken TO the supreme
Court Of Appaais At Wytheyiile, aud the case
was removed from WyihcYillc to the city OF
Richmond and was argued ON the ION OF
January, the fifst mortgage bcndhoiders
being represented bY Nh. Lshariluc, OF New
York. MIR. LceGam, Of Philadelphia. aud
judge Wilhsm aud BeVcries Crump, OF the
ctv OF RlchmOsd; the general mortgage
handholder- being represented by Judge
waiter Il. staples and MIR. Frank Is. Clark,
Of Baltimore, and tue Fidelity Trust lnsu-
rance COMPANY being represented by Judge
William T. Robertson and Mr.. Buiiii, OF
Phlsdcphia.
II wa, maintained on the one hand by the
INT m3rgace creuttoi> thst their mortgage
hv lis very terms covered the entire line OF
road from bsserstown 10 Roanoke tity and
wss the first aud prior lieu on that road snd
that the general mortgage cre6lters, having
taken their mortgage with notice OF the first
mortgage. hold Ia subofdination the rights
of the first mortgage creditors. On the
hearing II wa cOn'eDded by the general
fnortesge creditors hat by The very terms OF
the htst mortgage the $l,jGG,00 Of bonds
constituted a valid issue and the proper se~
curitv IA tse hands OF the general mortgage
creditors; that no right or lien OF The hrst-
mortgage creditors was interiered win IA
aay manner; that they hRd the security they
lsd siipulsiei; that the general mortgage
c,.di,or, didu't SEEK to interfere with them.
tut only TO share pro rata IN the benefit OF
the road TO the extent il was constructed aud
completed out OF the Teans furnished by
thsm.
Yesterdays DECISION.
The opinion Of the court was delivered
lv Judge Richardson, who entered verS
largely aud very q isborstey into the conHde-
rauon OF the " hole natter, reviewing at
great lengih all The points iuvoived.
Judge Richardson, after di'poslng OF
several preliminary questions relating 10 Tue
pieadlng and TO the admissiOihty OF certain
testimony taken IN the progress OF the cause,
addressed himself 10 the main question in-
VOWED. aud that IS the validity OF The
& $50. 900 OF bonds.
lie aid that the issue OF these bonds was
clearly authorized by the terms OF the first
mortgage; that the only limitation upon the
uoyger OF the comoauy under The first mOrt-
eaee was th4t the issue should not exceed
$4,000 per mile, wblch limihtiOn was FAITH
fully complied With 10 this case; that the
Si.5GO, 900 Of bonds by the yery terms OF the
Irst mortgage constituted lieu on tue eA-
tension Of the road from WayuesbOro' TO
Fo,n0ke City TO the same eXiept that the
Ss.27O, 900 did, and by the terms Of the geu'
In
20 issue bonds under the hrst mortgage, and
20 pledge those bOnds ~ collateral security
Tor the general mortgage creditors, and that
The genor -mortxSgc creditors mad lent
their money aud made their investment
upon tho condition and w7l0 the full under.
,tandiuz that they were TO have the benefit
OF the security OF the Sl560,OO0 OF bonds.
judge Richardson further said that the faii-
ure Of the trustee 70 certify the Sl.560,OOO Of
bonds, a. required by the terms OF the mort
Rsge, cannot prejudice the rights OF the
mortgage creditors; that trust could never
be effected or prej0diced by any act or
omission Of tue trustee, and that court oil
equity would, upon It's general principles
of Jurisprudence. regard that as done
which ought 70 have oeen done, aud that
the court could therefore treat the bonds, 80
far a. IL was necessary n their validity, as
hsvlng beeu certified by the trustee.
The Opni0n OF Juoge Richardson iully
vipdieates Messr- Kimban and Clark from