The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1893-11-09

The hearing in the suit in eq uity be-
tween the Somerset raj way and Lewis
Pierce and Others, trustees, wassresumed
court room yesterday morning. 1t was
decided to report the whole question to
the Law court for determination in such
form as to settle the rights of tie parties
not only in the present suit but also in q
writ of entry brought by the trustees
against the plaintiff company to obtain
possession of the road, q suit which is
now pending in Kennebec and Somerset
counties. The case then proceeded, and
had not been concluded at tho hour of
adjournment.
AS the case is one OF great Importance,
a brief history of the litigation will be
of interest.
In 1871. under charter obtained from
the legislature, the Somerset Railroad
company commenced to build railroad
from Oakland to Scion. The road was
built as far as North Arson, a distance
of twenty-five miles, where the company
was obliged to suspend it's work for the
want of funds. In the same year the
company issued it's bonds to the amount
of $4,000, secured by mortgage upon the
road and its franchises, to Lewis Pierce
and others as trustees. The interest up
on these bonds was paid for period of
about two years when, for lack of funds,
the coupons went to default. The bond
holders and trustees took no action upon
the matter, the road being apparently in
weak condition financially. In 1883 a
large amount of coupons had matured
and no payment of interest was made by
the railroad, a large amount of outstand-
ing debts against the company having
matured which the company were unable
to meet, the bondholders deemed it
advisable to take possession of the road
and form new corporation under the
statute, and they attempted to form such
corporation in that year.
The amount of outstanding bonds and
coupons at that time was about SIS, 1000.
All of the bondholders came into the
arrangement except the holders of $110,-
900. OF this $4,000, it is claimed by the
plaintiff that the holders of about $50, 600
voted Tor the organization of the new
surrender their bonds and take out stock
in the new corporation. The holders of
this $50, 900 now claim that the new or
ganization is invalid, and also claim that
the old bonds which were surrendered to
the new company for it's stock have lost
their protection under the mortgage, and
that the holders of the $4,000 are the
only ones now protected by that
mortgage.
OF the $3.50, 600 in bonds issued by the
company IN 1871, the towns of Norridge-
wock and Arson each took from $50. 600
to $40, 900, and subsequently, disposed of
them at prices ranging from 20 to rs
cents on dollar. The. bonds brought a
low price for the reason that the coupons
had not been paid, and the holders could
see no prospect that the railroad would
ever be able to meet its obligations.
After the formation of the new com
pany, it was deemed advisable to extend
the road from North Arson to Bingham,
a distance Of sixteen miles, to secure the
business of the upper Kennebec, and for
that purpose the new corporation issued
1925, 600 i'll bonds and mortgaged the en-
! tire road from Oakland to Bingham, a
distance of forty-two miles, to secure the
payment of the new bonds. These bonds
| were put upJn the market and sold. The
trustees under the mortgage of 1871, for
the benefit of the bondholders under that
mortgage who had not surrendered their
bonds and taken stock in the new com
pany, then brought a writ of entry
against the general officers of the new
company and all it's station agents sto
obtain possession of the road. Thereupon
the new company, in order to settle all
these controversies, brought this bill in
equity against the trustees, claiming to
have the old mortgage declared void and
ordered to be cancelled, and also askise
that the holders of the $40, Oon in bonds
be required to surrender their bonds to
the new company and take It's stock as
they claim the statute directs.
| The trustees of the new mortgage
made by the new corporation to secure
the 1925, 900 in bonds contend that their
mortgage is valid and that it should be
protected, and also contend that the new
organization is valid and that the trus-
tees under the old mortgage have nc
right to maintain their action at law,
and that the claimssof the holders Of said
| S110, 200 in bonds stands as a menace to
the title and possession of the new COM
pany, and they therefore ask the court
to.remove this cloud from their title. The
new company admits that it's outstand-
ing bonds under the mortgage of 1871 are
dissenting minority, and ask the court
to determine and establish the
rights of the minority and majority
| bondholders.
| The hearing will be resumed at 6
| o'clock this morning.
Hon. E. F. Webb, Hon. Joseph W.
Symonds and Hon. J. H. Drummond fol
the plaintiff, and Hon. D. D. Stewart and
| Hon. H. B. Cleaves for the defendants.