The Emporia weekly news. [volume] (Emporia, Kan.) 1881-1889, 1889-12-05
NOT YET FROzE OUT.
Judge Brewer Allows Kansas
Townships, Etc, to Become
PARTIES TO THE FORECLOSURE SUIT.
Al Inportant Success on the First
Stage OF the Proceedings
Status OF the
Suit

/: topeka, Kan, Nov. 27.-Yesterdsy
morning Judge Brewer, of the United
States Circuit Court ordered that the
Kansas counties, municipalities and
townships and private citizens holding
stock Of the Chicago, Kansas s. Ne
braska Railway Company should be
permitted to become defendants in the
action entitled THE Metropolitan
Trust Company of New York against
the Chicago, Kansas & Nebraska and
the Chicago, Rock Island s. St. Paul
Railway Companies" and that the
complainants be given twenty days In
which to file their answer and cross
bill.
This action was brought in the United
States Court here about three months
ago to foreclose mortgage of over $685.
000, 900 on the Chicago, Kansas s. Ne
braska railway. All but about s., 5OO,-
0OO OF the capital stock of that railway
is held by the Chicago, Rock Island &
Pacific railway, and if the suit for fore
closure were successful the Kansas
stockholders would naturally be frozen
out.
Rossington, Smith s. Dallas, of To
| peka, represent the compliments who
comprise the following: The commits
sioners Of Jackson, Dickinson, Marion,
Meade, Kiowa, Riley, Reno, Sedgwick,
Thomas, Saline, Sumner and Ford
Counties; the township of Walnut, in
Brown County; townships of Grant,
| Liberty, Center, Lincoln and Lyon,
in Dickinson County; the mayor
and Council of Abilene; townships
of Grant, EzbOn, Washington,
Limestone, Center, in Jewell County;
townships of Clarks, Creek, Rolling
Prairie, Highland, in Morris County;
townships of Empire, Groveland, Su-
perior and MCPHERSON, in Mcpherson
County; mayor and Council of Canton,
MCPHERSON County; townships WASH
ingtOn, Rock Greek, Nemaha County;
Center and Emmett, in Norton County;
mayor and Council of Norton; town
ships Center, Richland and Banner,
in Pratt County; mayor and Council Of
Pratt City; township Prairie View and
Mound, in Phillips County; township
CORTLAND and Scandal in Republic
County, mayor and Council of Hutch
inSOn; Cimarrpn townships, Seward
County; mayor and Council of Wichita;
townships Of Washington, Maple Hill,
Alma and Newbury, Wabaunsee
County.
The petition filed with the court sets
forth that prior to 1884 the Chicago,
Rock Island & Pacific railway was
bound by an agreement with certain
rival lines not to build west of the Mis-
souri, river; that the Chicago, Burling-
ton s. Quincy broke the agreement by
building into Nebraska, and the Rock
Island at once began the construction
of lines into Kansas under the
name of the Chicago, Kansas s.
Nebraska and other auxiliary lines
that were at all times under the control
of the Chicago, Rock Island & Pacific;
that upon surveying and locating the
new lines it caused to be issued all
their capital stock in solid blocks and
caused it to be transferred in solid
blocks to itself, the Chicago, Rock ISL
and & Pacific, save what went to coun-
ties, cities and townships voting aid.
That on March 81, 1889, the pretended
Kansas & Nebraska railway
was s27, 6s7 800, of which the
Chicago, Rock Island s. Pacific claimed
to own S25, Isl, 900, the residue having
been sold to certain subscribers in st.
structiOn was commenced the line was
leased perpetually to the st. Joseph &
Iowa railway, short line controlled
by the Rock Island in Missouri and
Iowa, and the amount of rental was
fraudulently fixed at thirty per
cent. of the earnings; that later
the Chicago, Rock Island s. Pacific
bought the st. Joseph & Iowa and with
it the lease of the Chicago, Kansas s.
Nebraska; that the latter road made
large profits and as no true or just ac-
counting had been made and the Rock
Island took thirty per cent. of the
earnings, there was not enough left to
pay operating expenses and interest on
the $25, las, 600 which had been Dor
rowed from the Metropolitan Trust
Company to pay for the construction
of the Chicago, Kansas & Nebraska.
The sum of $25, 149, 600 borrowed to
pay for the construction of the road,
the compliments say, was grossly ex-
cessive. The complaining stockholders
claim to have had no notice of stock
holders meetings. They say that coun-
sci for the Rock Island s. Chicago,
Kansas & Nebraska railways agreed
and consented to the sale of the
their answers filed in court. A
sale at foreclosure would neces-
sarily deprive all smaller stockholders
of their interest in the road. They
claim that the earning capacity of the
road is sufficient to pay interest and all
operating expenses; that NJ. A. Low,
president and all directors and officers
of the Chicago, Kansas & Nebraska,
har NJ oil
of the Chicago, Rock Island & Pacific
Company and were servants of that
company before their connection with
the Chicago, Kansas s. Nebraska.
The petitioners asked in conclusion
that they be made parties to the suit,
with leave to file an answer and cross
bill against the Chicago, Rock Island
8 Pacific; they demanded a Just &C
counting with reference to the receipts
of the Chicago, Kansas & Nebraska
manded the cancellation of the present
pretended lease by which the Chicago,
Kansas g Nebraska was operated
by the Chicago, Rock Island s. Pa
cific and the formation of lease, If
necessary, by which the Chicago, Kan
sas & Nebraska would be enabled to
receive fair sum for rental sufficient
to pay existing indebtedness and inter
est on its bonds, thus preventing a
foreclosure sale; that the earnings be
made applicable to payment of interest.
that the true Indebtedness of the Chi
cage, Kansas 3 Nebraska be made the
only incumbrance upon its property.
The lawyers interested in the case
are Judge Thomas WinthrOw, of Chi
cage, for the Chicago, Rock Island g
Pacific; n. A. Low, of Topeka, for the
Chicago, Kansas s. Nebraska; Thomas
G.. Hillhouse, of New York, and A. L.
Williams, of Topeka, for the Metropol-
itan Trust Company and Rossington,
Smith g Dallas.
The representatives of the Kansas