The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1894-03-30

OMAHA, March 29-Judges Caldwell and
Sanborn, in the United States court today
decided the famous Union Pacific-Gulf
case against the Gulf road
The court holds that the Union Pacific
is not compelled to operate the Julesburg
branch to Denver, bus says the receivers
must take into consideration the demands
of the public and by conference agree on
some basis by which the people may be
properly served. On the great bone of
contention, the interest question. the court
holds that special findings are necessary
before decision can he reached. Accord
ingly William c. Cornish of st. Paul. is
appointed a special master in chancery 70
hear the matters in dispute, make account
ings and report the findings to the circuit
court of Nebraska. The judges also hold
that the federal court for the Nebraska
district is the court of primary jurisdiction
in matters pertaining to the Union Pacific,
aud that instead OF applying to Judge
Hallett Receiver Trumbull, of the Gulf
road, should come before Judge Dnndy.
Continuing The court says: 1.-The court
is not bound 10 pay the debts nor 10 per-
form the obligations of the Insolvent, nor
are its receivers The only difference be-
tween the liability of such receivers to pay
the debts and TO perform the eXecutory
contracts of an insolvent corporation is
that the consideration of the former is
generally received by the insolvent, while
The consideration of the latter may be OBJ
tanned by the receivers, and ii after al un-
reasonable length of time they accept the
benefit they may thereby assume the liza
bilities of such contracts.
''Ihe possibility of such an assumption
of liability has imposed upon these re-
ceivers a corresponding duty. This duty
was to carefully examine every lease, traf-
flc or other executory contract OF the Un-
ion Pacific company. and TO determine in
each case whether or not lt was for the
best interests of all the creditors and
stockholders of the insolvent corporation,
for whose ultimate benefit they held its
property. that they should accept the ben.
efits and assume the burdens of such
lease or contract They were
entitled 10 reasonable time
after their appointment to make
this examination and determination. They
were appointed October 10. 1892; they re-
nOunced these contracts January Is, 1894.
In view Of the great number of eXecUtory
contracts the Pacific company was party
to- and the heavy interests involved in
this recelvership, this was not AN unreas-
onabie time, in our opinion, to use in the
examination and determination of this
question.
Moreover, we think the chief consider.
alton for the assumption by the Pacific
company of its liabilities under these con-
tracts was that the Gulf company should
be operated in harmony with and practi-
cally under the supervision and control of
the Pacific company itself"
After reviewing in detail the progress of
the litigation, Judge Sanborn said. In
accordance with these views the order
directing the receivers To operate the
j ulesburg branch will be rescinded and
the receivers of both companies will agree
upon fair and just traffic arrangements.
carefully considering the wants and inter
ests of the public as well as the parties
they represent, and if they are unable so
10 agree they will submit their differences
TO this court and they will be at once
settled
SO far as the Gulf compaEy's or its re-
ceiver's claim to the amount of interest
which accrued on its bonds prior to the
appointment of the receivers OF the Pacific
company is concerned, we are aware of no
principle of law or Of equitable consldera-
lion that will take this claim out of the
category of the simple contract liabilities
of the Pacific company of like date and
character. or relieve from the effect !
of any valid offsets or counter claims the |
Pacific company may have against the |
Gulf company. This claim must be con-
sidered hn a general accounting between |
these corporations.
But the receiver of the Gulf company |
insists that by operating the railroad of |
that company from Oct. I3 TO Dec. 10, 1895, |
and by various acts and statements dur
ing that time, the receivers of the Pacific /
accepted the benefits aud as |
sumed the Liabilities of these contracts for |
that period and they ought TO be directed
to pay at once and in preference TO all /
other claims the interest on the bonds of |
the Gull company that accrued during /
that time. The authorities TO which we
have referred leave no doubt of the propo- |
sition that the burden of proof is on the !
receiver of the Gulf company to establish |
the proposition that these receivers did |
assume this liability"