The herald., 1894-01-09
IN THE HANDS OF RECEIVERS.
The Atlantic & Pacific Falls
Into Line.
Application Made and the Petition
Granted Yesterday.
The Bill of Complaint Brought by the
Mercantile Trust Company
of New York-The
Complaint.


rumor that receiver would be appoint
cd for the Southern California Railway
company but SO far as known, there is
not the slightest truth in the statement.
The attorney of the railway is authority
for the statement that there is no like
lihood of the local branch being en-
braced in the receivershiD.
Last Sunday T.. R. Gabel, general su-
perintendent OF the Atlantic and Pa
cific; G. N. Sterry, attorney for the road;
W. w. Green, of the Mercantile Trust
company OF New York, and G. B. Smith
of Topeka, arrived in the city. Yester-
day they went before Judge Ross OF the
United States court and made applica-
tion for the appointment Of receivers.
Judge Ross granted the petition and
Immediately appointed Joseph w.
Reinhart, John McCook and j. @. Will
son receivers of the road and all its her
editaments.
The receivers are required to give
bonds in the sum of $4,000 each, and
are directed to take immediate charge
of the properties OF the Atlantic and
Pacific Railway company. Ali officers,
employees and agents of the company
are commanded to deliver all properties
of every nature to the receivers.
The complaint was brought by the
Mercantile Trust company of New York
on mortgage. The complaint alleges
That on the 1st OF September, 1887,
the defendant railway company made
and executed and delivered to the COM
plainant its certain second mortgage,
to the complainant as trustee the prop
erty in said mortgage, sill rights of
way, and machinery, rolling stock, rail-
road. telegraph, bridges and everything
pertaining to the road, known as it's
western division, beginning at Albu-
auerque.
The mortgage was made to secure an
Issue OF bonds known as second mort
gage per cent, guaranteed gold bonds
OF the Atlantic & Pacific Railway COM
pany, western division, limited to $10,-
600 mile of completed railroad OF the
western division OF the railway COM
pany. to be guaranteed severally, but
not jointly. as to payment of one-half
of the principal and interest bv the At
Gibson, Topeka & Santa Fe Railway
company and as to one-half of the prin-
cipal and interest by the St. Louis &
San Francisco Railway company, and
which two last named companies joined
in the execution of the mortgage above
set forth as guarantors of the payment
of the principal and interest, which
bonds were each for the principal sum
of $1,000, payable on September /,
1907, and to bear interest at the rate OF
8 per cent per annum; interest being
| payable eemi-annually at the agency of
the railway company III New York city.
1t is further alleged that of the bonds
authorized to be issued under and to be
secured by the mortgage or deed of
| trust, the defendant railway company
has made and iesued, and the cotnplain-
ant as trustee has certified second mort
gage per cent guaranteed gold bonds
for the principal sum of SIS SOC, 900, of
which $5. 800, 600 are now actually out
standing.
1t in further alleged that the defend
ant railway company has wholly failed
to keep and perform its covenant to pay
taxes upon its property so mortgaged as
aforesaid. and that there are now due
and unpaid large sums for taxes in the
territories of Arizona and New Mexico
which, if lawfully levied, are lien
upon the property superior and para
mount to the lien of the mortgage Of
the complainant; chat there are now
due and unpaid in the territory of New
Mexico $l5, ,440.51 of taxes in the ter
ritory of Arizona $73,379.50; that
the taxes IN both territories are
overdue and in default, and that the de-
fendant's property is now subject to
seizure, and that the defendant COM
pany is wholly without funds to pay the
taxes, and that in consequence the vari-
GUS officials of the territories may seize
and attach the property in order to pay
delinquent taxes.
1t is alleged by the Trust company
that on March l, 1894, there will become
due for interest upon the bonds issued
and outstanding and secured by the
second mortgage the sum of $165, 900,
which the defendant railway company
will be wholly unable to pay.
Therefore it is believed that the rail-
way company is wholly insolvent and
unable to meet its now-existing and
presently accruing obligations, and in
this behalf, the complainant alleges
that the railway company has at the
present time q floating indebtedness
amounting to over 100000.
The complainant alleges that unless iu-
e-ty in dispute will be dismantled, dissi-
pated and dismembered, and vast sums
OF money will be lost to the various
creditors and stockholders of eaid COM
pany and the public interests seriously
affected. 1t ia averred that the unity Of
the property constitutes one of the most
important elements OF its value, being
part of through line connecting each
OF its termini with other railways doing
large and extensive business in the
east and in the west.
1t is further averred that for MANY
years psat the railways local earnings
have been comparatively small and that
by reason of the spsrsely settled coun-
try through which it runs its local earn
ings must for many years continue to be
small in comparison with its through
earnings.
1t is averred that the complainant has
already filed similar bills in the United
States courts in the territories before
mentioned. praying for the foreclosure
q