Montgomery County sentinel., 1890-09-26
The Latest Phase of the Canal Litiga-
tion,

Last Saturdays proceedings in the Court
at Hagerstown have added q new phase to
the Chesapeake and Ohio Canal litigation
1t had been announced that on that day the
counsel for the various parties to the suit
would meet Judge Alvey for the purpose of
settling the terms of the decree for the sale
of the canal in accordance with the Judges
opinion recently given in the case, and APP
pointing trustees to make the sale. Before
the day fixed, however, the bondholders un-
der the act of 1874 filed petition for stay
of proceedings, offering to pay the claims,
principal and interest, of the bondholders
under the act OF 1878, at whose instance re-
ceivers had been appointed for the canal,
and who previously asked for decree OF
foreclosure and sale, and asking that they
may be allowed to repair and operate the
canal as waterway, and apply the tolls
and revenues as provided by the act OF 1874.
They further asked that upon payment OF
the mortgage Indebtedness secured by the
act of 1878, they may be "subrogated" in
legal phrase; that is, admitted to stand in
the shoes of the present holders of that in
debtedness, and enjoy the lien and priority
given by the act of 1878. This petition had
been set down for clearing on the 25th,
but 1t appearing on Saturday that all par
ties interested were represented in Court,
the questions presented by the petition were
taken up and argued by counsel, the con-
sideration of the decree for sale and ap-
pointment of trustees being deferred until
after the Court shall have passed upon these
questions. A similar application on the
part of the bondholders of 1874 has been
filed in Judge Cox's Court in the City of
Washington, where receivers have also been
appointed for the portion of the canal and
all property of the company at Georgetown
and within the District of Columbia.
In the course of the discussion before
Judge Alvey on Saturday it appeared that
the bondholders of 1878 had no opposition
to offer to the proposition of the bondholders
of 1874. All the former could get out of a
sale of the canal at any time would be the
principal and interest of their bonds. Ii the
bondholders of 1874 were willing to pay this
the lienors of 1878 had naturally nothing
more to ask, and no interest, as such lienors,
In the future fate of the canal. The Attor
ney General appears to have objected that
the proposed arrangement left the State
unprotected, or rather unprovided for-the
largest creditor and lienor OF all, with a
claim against the canal, principal and in
terest, Chiefly interestD amounting to $27,'
100000. II may be observed, however, that
the State will retain all the protection it
has had since the act of 1878, postponing
the States lien upon the body of the canal
TO that Of the lienors under tina, act, and
since the act of 1874 postponing the States
lien upon tolls and revenue TO that of the
bonds thereby authorized to be issued. If
the expectations of the bondholders of 1874 |
should be realized and the canal be repaired |
and operated successfully as u waterway |
the States security cannot suffer, inasmuch |
as a live canal is better than a dead ditch
Who knows but in that event the State may |
find purchaser for its entire interest in |
the canal upon better terms than the Wash
ington and Cumberland Railroad Company |
offered at the last session of the legsla-
ture 2-RuIlo Sun