The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-03-28
END OF AN OLD CASE
Supreme Court Rules on the Illi-
nOis Midland Certificates.
1t Decides in Favor of Warning Brothers
"A VigO County Case Reversed
OH Peculiar Grounds.

The prominence in the financial world of
the parties to the suit of Stoughton j.
Fletcher and Francis NJ. Churchman, of
this city. against William. Charles and
Henry Waring. known as the Waring
Brothers, renders it notable. 1t was dis
posed of in the Supreme Court yesterday,
that tribunal affirming the decision of the
Vigo Superior Court, which was in favor of
the Englishmen. This suit was the out
growth of the sale of the Illinois Midland
railroad receivers certificates, which were
held by Fletchers Bank. The road was
consolidation of the Peoria, Atlanta & De-
catur, the Paris & Decatur and the Paris
& Terre Haute railroads. 1t got into finan-
cial straits, and proceedings Were begun in
the Edgar county Qllinois) Circuit Court In
1875 for the appointment of receiver. In
1873 the case was removed to the federal
court, and there Joined with others involv-
ing the same subject matter. In December
of that year L. GEMS, the local agent of
Warning Brothers, was appointed receiver
of the Midland, and in 1881 the court author
lied him to issue certificates amounting to
s6S,037.9S to pay for certain improvements
He was also authorized to issue such GER
tificates as were necessary for the future
maintenance and preservation of the prop
erty. subsequently the receiver issued $780,
900 more of these certificates. Fletcher's
Bank. OF this city, purchased the entire
first lot and s5S,275 of the second issue and
the court approved these sales.
In 1885 the roads composing the Illinois
Midland were sold under foreclosure and the
proceeds distributed among the creditors by
commission appointed for that purpose.
Fletcher's share was less by nearly $4,000
t. 30
tifcates purchased by the bank. At the
time these certificates were bought Waring
Brothers held large amount of the Mid
lands stock and bonds, as we'll as heavy
claims against the road, and were very
largely interested in its successful manage
ment.
1t appears that they were very anxious the
Fletchers should purchase the certificates
and, as an inducement and guarantee OF the
payment of the certificates at any time that
the assets of the road should be distributed
by sale of property or otherwise, entered in
to the following agreement with the Fletch-
ers;
tract (Waring Brothers) hereby agree that
the same are hereby postponed and subor-
dinated to said certificates so to be issued
by said L. GEMS as receiver, and to be sold
by said receiver to the parties OF the sec
ond part FLETCHER & Coz
Warning Brothers had purchased and
owned large parts of the right of way Of
to a company. This part the United States
Court had ordered sold and the proceeds
turned over to Waring Brothers Other
parts had not been sold to the company,
and were still the undivided property OF
Waring Brothers. Regarding the right of
way Warning Brothers made the Following
agreement. I'VE hereby waive our claims
for a first lien for right of way specified in
the foregoing letter and agree that such
claims for right of way shall be postponed
to the certificates to be sold to Fletcher &
Co. by l.. GEMS, receiver.
When the road was sold Fletcher az Co.
received s27 1923 less than the amount of
their certificates They then brought suit
Brothers. claiming that the agreements en-
tered between them were such that Waring
Brothers were liable for the deficit. They
claimed that by the agreements all the right
of way and all Of the claims held by Waring
Brothers were pledged to Fletchers for the
payment of the certificates. On the other
hand. Warning Brothers contended that the
agreement regarding the certificates merely
meant that in case of the payment OF them
those of Fletcher x Co. should be paid first
and those of Waring Brothers afterward.
The lower court following the United
States Court, ordered that Waring Brothers
should pay to Fletcher & Co. the amount
of money they had received on the sale OF
that part of the right of way which had
been sold to the railroad company, but held
that the other parts OF right OF way were
In no way liable to Fletcher & Co. 1t also
held that the payment or certlncateS OF
Waring Brothers had simply been post.
poned by agreement until after those of
Fletcher & Co had been satisfied, and as
Waring Brothers had received nothing on
theirs they had carried out fully their part
of the agreement
Chief Justice Howard wrote the opinion
i'm the proceedings in the lower court, and
affirmed the Judgment in all things.