New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-04-16
THE FITCHBURG MUST PAY THE INTEREST
LONG AND BITTER SUIT OVER RAILROAD
BONDS HNDFD BY TIE COURT OF APpENI.s.

bONO> iN'rD Di Inn '''i ~ ~ ~ +-''---
The Court of Appeals gave important decision
yesterday in which has been I'm litigation for
nearly two wears in which the court of last resort
has placed its emphatic veto upon The attempt Of a
railroad company to scale down its Indebtedness and
defraud It's bonGhOlders by If cOllusve agree
ment with another company. The case j. known A.
that OF ElimghaSt against the Troy and Boston Rail
road Company. and began on July >. 15-s, when The
law firm Of Mascn Nichols. OF 80. 146 Broadway.
asked from Judge Andrews Of The supreme Court. an
order granting leave James Il. plnm and other bond
holders to bring suits against the ttchsug Railroad
Company 10 recover interest due sI.5OO.Ooo per
cent bonds issued by the Troy and Boston Company.
running fifty years from July |, 1874, ana
therefore not due until 1924. These long
time bonds amply secured and bearing a high
rate % interest. and being substantially d
FIRST mortgage upon all the property and franchises 81
Inc Troy and Boston Railroad. were regarded a. de
srable investments and sold at high premium.
Estates Of widows and orphans were PIT into 'en and
other holders were Nermilye q Co., the banker h. j.
Denning Of T. J. Dcnuing ~ Co; Leland rarbanhs,
Of the Fairbanks scale Company, and President Burden
Of the Burden Iron Works.
Trouble began when the Troy and Boston Road
absorbed by the litch2urg Railroad Company ia
April, l--7 In the consolidation agreement Of the
Troy ard go,ton with lie Fitchhurs company The
Troy and Eoston valued At s1,50o,Oo0, and ia
payment Of this sum .e rlclbur, company agreed 10
give 900 900 in cash or IN per cent t"elty-Fcar
deDenturc bonds and tie balance In stock. II was
also arranged tnai tho itchburs company shond de-
vote - 800 900 Of these per cent Gcbcture bonds 70
the payment Of the consolidated per cent mortgage
Of the Troy and Boston. not due until 1874
The hondhoiders refused 70 exchange their per
cent bonds havTs thirty seven years to run and
amply secured. fo~ per cent deb .ntuTc
bonds unsecured by mortgage and having only twenty
Years to run. Ihercapon the Fitchbuls company
Undertook 70 coerce them, and in April, 1897, began
freclo~ure suit in Rensselaer, County based on tech
neal grounds. The plaintiff ID ,Ai, -uit Charles
". nlhnehast. one OF the two trustees Of the mort
fsse' Dni tle other trustee John Is. Gale, refused u
ION IN s9lt 80 maniestK against the interest u
VIC oonuhOllcrs James K. Plum had himself made
one Oh 'e oeendan!s and successfully defended ihe
s.11, Suose Learned deciding that the foreclosure
P'Decc".no, mus he stopped. I.ut the Fcbburc
Unpty sun refused 10 pay the interest and allowed
my ih>tdiWchtN 10 become dgc. The motion 81 July
~ 100, vas heneI a. the special Term. TN" General
Urn reversed The decision, and the Court OF APP
poais a'nrins tlc de'. lon ~ the Gc.rlaI FERN AMI
t s,c1, u,r sun 81 the 'crfhoid-rs cnrr'''
f a. company 10 pay the interest the per
II ~ TIE u"e bros Na~t"I = NIchOi. ana Char,~
f. w. trraissFson OF Troy, represented Plum and JIc
,uunViocFs' ana Esek COwcn. Of Troy, Tilnrhst and
ue railroad company.