The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1893-05-12
THE CABLE ROAD CASES DECIDED,
The Alvord Mortgage Fore
closed and Sale Ordered.
The California Stockholders Held
Not to Be Liable.
Judges Van Dyke and Wade Hand Down
Three voluminous Opinfons-Way
Clearing for Consolidation
with the Electric Road.


Judges Walter Van Dyke and W. P.
Wade of the superior court Of this
county, in accordance with three elab-
crate opinions handed down.
The result of the decisions will be the
sale OF the Pacific Railway company's
property, embracing the extensive sys-
tenn in operation in this city, at fore
closure sale.
After that will follow, If the plans
heretofore outlined are carried out, the
consolidation of the cable and electric
railroad systems OF the city.
The cases involved many intricate
questions of law, and at one time and
another the array of local and foreign
legal talent was larger than in almost
any cases ever tried in the county.
The case of the Illinois Trust and
Savings bank OF Chicago Va. The Pacific
Railway company was tried before Judge
Van DYKE, and his opinion in it covers
81 type written pages. 1t was the pro.
ceeding to foreclos ca trust deed or mort
gage executed by the defendant to the
plaintiff, as trustee for certain creditors
and boEdholders OF the company.
Among the defendants brought in were
William Alvord and Thomas Brown,
who held trust deed or mortgage ex-
ecuted by the Los Angeles Gable Rail-
way company to them in trust, to secure
certain creditors or bondholders of the
latter corporation, and they filed cross
complaint in this suit to foreclose their
mortgage, as being prior in right to the
mortgage held by the plaintiff. This
latter mortgage was the first mortgage.
The court in starting reviews the his
tory OF the companies, stating that the
Los Angeles Gable Railway company
was organized July ID. 1887, absorbing a
number Of horse-car lines. September
10Th following it executed trust deed
TO Messrs. Alvord and Brown, trustees,
to secure 1900 bondSof $1,000 each, pay
able 30 years from date, with per cent
interest, payable quarterly. Only 1886
OF the bonds were issued and sold, 224
originally pledged and afterwards sold,
and 80 pledged as collateral.
On the 18th OF May, 1888, the Los An
geles Gable Railway company acquired
all the stock OF the horse-car roads mem
toned, and October 81 transferred to
Alvord and Brown a large number of
shares of the stock of these roads as
The Pacific Railway company was or
ganized after the construction of the
cable system, and August "a, 1899, in
anticipation OF purchasing the system
built and operated by the Los Angeles
Gable company, mortgaged to the plain
tiff, the Illinois Trust and Savings bank,
as trustee, TO secure $500 bonds Of $1,000
each. with per cent interest, payable
semi-annuAlly, all its property, fran
chiees, shares of stock, the capital stock
of the Los Angeles Gable company
which might be sold or assigned to It. OF
these bonds 1856 were set apart to be
substituted for those issued by the cable
company and secured by the Alvord and
Brown mortgage, and of the rest some
we're sold and some were pledged.
October 8, 1888, the Los Angeles Gable
company by deed, purported TO convey
to the Pacific Railway company, subject
to its indebtedness, all it's franchises
and property, and the Pacific company
took possession May l, 1890, and oper-
ated the road to February 20, 1891. The
Gable company conveyed its property to
the Illinois Trust and Savings bank, on
July Is, 1890, in accordance with its
trust deed to the Pacific company, of
August "a, 1889.
By the failure to pay interest on the
bonds on the part of the street railway
companies, the trustees under the mort
gage or trust deeds, availed themselves
of the provisions Of the instruments to
place said companies in default 80 as to
authorize the bringing of suit to fore
close.
There we're a number of intervenors.
and they with the Illinois Trust and
Savings bank, and Peabody, Houghtel-
ing & Co. are holders OF bonds Sc
cured by the trust deed to Alvord and
Brown. A number of judgment credit
ors were also made defendants as claim
ing liens ON the property to be fore
closed.
The first question discussed by the
court is the contention on the part of
the judgment creditors as we'll as the
plaintiff, that the trust deed to Alvord
and Brown does not include the horse
car lines. 1t is held on this point that
it is plain that it was intended to cover
all the property owned and operated by
the Gable company, including the prop
erty purch and leased from the
horse car companies, and in case of
doubt the instrument is to be inter-
preted in favor OF the trustees.
The court holds that the intervenors,
the Illinois Trust and Savings bank and
Peabody, Houghteling & Co., who hold
bonds, secured by the Alvord and Brown
trust deed, on which no interest has
been paid. are entitled to be placed on
the same footing as to payment of inter
est as the other bondholders secured by
the same deed.
The question of the attack of the
judgment creditors as to the appoint.
ment of Receiver Crank is discussed at
length, and the appointment is held to
be correct; also that the court appoint
ing him WAS justified in preferring a
number of claims incurred by him in
the operation of the road to the claims
of bondbolders.
1t is also held that none of the iudg-
ment creditors have any liens entitled
to priority over that of the mortgagors.
Finally, the court in conclusion, says I:
Findings and decree will be prepared
by said attorneys in accordance with the
foregoing opinion of the court, for the
foreclosure and sale of the property un-
der the trust deed or mortgage executed
to Alvord and Brown, and also the stock
held by them as such trustees, and the
application of the proceeds of the sale,
after the payment Of the expenses OF the
same, including the compensation to be
allowed the trustees and the attorneys,
as follows: