Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1895-07-31
THE COMPANY BOUND
Judge Sim0nton Holds That Mr. Fisher
Was Acting for Il.
MUST CARRY OUT THE CONTRACT.
Judge Atkins Appointed to Sec Th"t
the Manchester Railway Company
Ixsrc. The Hands and the Eiec-
trio Company Guarantees Them'


Jpdce Charles II. simonton. OF the
Uni'ed States Circuit Court, mas SeHt "
Clerk Peasants his opinion In 'he case
OF Joshua q. Harvey. and o'ners' ana
the baltimore Trust and Guarantee COM
Many "a the Richmond Railway and
r,ec,,,c conpany and the Richmond and
us,chcstcr Railway Company, which was
argued before him some months ago.
Harvey and others. according to the
All nic5 in the case. own all the first and
second mortgage bonds Of the Richmond
and Manchester Railway Company and
the Trust and Guarantee Company Is
trustee under the two mortgages by
which these bonds are secured. In the
oplnion. which is very long. the Rich
mond and Manchester Railway Company
is designated as the Manchester COM
pany and the Richmond Railway and
Electric Company as the electric COM
pany. The former company executed two
mortgages. securing its bonds, aggregat-
Ing 5000. The holders OF these bonds,
desiring 10 make some arrangement with
tho electric company whereby the value
Of their securities would be increased, and
the competition between the two en-
terprises removed. formed a committee
representing both bondholders and stock
holders 20 conduct negotiations with Mr.
George L. Fisher, Of the electric COM
pany.
NEGOTIATIONS WITH MR.. FISHER.
The committee supposed that they were
Nfraaa T.ata .
sentative Of the electric company, and
agreed with him on satisfactory terms:
but when the formal memorandum was
presented to Mr.. Fisher he refused to
execute II until his name had been sub
stituted for that Of the electric company.
be assuring them that he would get
meeting of the Board OF Directors and
that they would adopt and ratify the
contract The memorandum of agree
ment was signed February 10, 1898. and
the electric company's directors met the
same day and took action.
The contract. the details OF which have
already been printed is quoted I'm full in
Judge SimOntOn's decision. The paper is
sgned by G. T. Fisher, William A. Mar
burg. Charles GoldsboroUgh, and John
J.. Semmes. Under the agreement the
electric company was TO guarantee the
payment Of the principal and interest Of
the bonded Indebtedness Of the Man
chester company. amounting TO $4,000.
There IS no evidence whatever" the
opinion says, "of any action on the part
OF the Manchester company or Of any one,
but these cOmplainants interested in II;
certainly no corporate action booking TO
any issue Of new bonds or TO any ar
rangement. contract. or understanding
with the electric company. This memo
Nit &c h. Hvr
evidence Of such contemplated action l
WERE TO ISSUE BONDS.
The preamble to the resolutions adopt
Ell by the electric company's directory
sets forth that the Manchester company
was about TO issue 10000 in 5-per-cent.
gold bonds. and that the company was
20 pay all Of its outstanding floating debts
before the contract went into effect. II
was upon this assumption that the cleo
trio company agreed to guarantee the
Manchester bonds The lease was for
ninety-nine years. renewable forever.
IL IS further shown IN Judge Simonton's
review that the compliments have paid
the floating debts OF the Manchester COM
pany: that the bonds have been called IN,
ready for cancellation; that the majority
Of the stock has been delivered to the
Atlantic Trust Company for final settle
been prepared ready for execution when
tho new bonds are ready for delivery;
that the $4,000 Of new bonds have bevn
engraved and are on deposit ready Nor
execution by the Manchester company,
and for guarantee by the electric COM
pany. and that the bondholders have
submitted a draft OF the deed OF trust
20 the Atlantic Trust Company intended
70 secure this new issue of bonds, and
guarantee. which has been approved by
he solicitor Of the trust company.
Having done these things, the bond
holders demand that the covenant Of the
electric company be fulfilled, averring
that the new bonds have not been eXecu-
ted by the Manchester company; that the
Heed Of trust TO secure them has not been
executed: that the guarantee OF the
electric company has not been executed.
and that this company has not paid any
money for the use. occupation, and en-
iovment OF the Manchester company,
toward liquldatlng any Of its bonds. nor
aas il kept in proper repair the leased
property. The result, the Court says, Is
hat the bondhollers Of the Manchester
company have delivered themselves into
he hands Of the electric company.
WHAT THE CONDITIONS ARE.
The Court reviews the case at great
length. holds that the contract Hldle
by the bOndholders with George +.
Fisher. was not made with him person.
ally but as the representative or the
electric company. declares II 20 be mani
fest that throughout the compliments
believed they were dealing with the cleo
trio company, and that the electric com
pany by its action ratifying the acts OF
Fisher. and deriving the whole beneii:
therefr0m. have confirmed this belief
cites many authorities 70 bear out this
position. and says: ''The compliments
have put the property In the hands Of the
electric company. for whose benefit Fisher
Was acting. and il has been accepted
They have deposited the majority OF the
stock with the Atlantic Trust Company
they have procured the surrender of all
tn mortgage bonds 20 n common agent
ready for cancellation. This attitude
they were compelled TO assume under
their contract. and this attitude they
must maintain in order 90 compel the
fulhlment OF the contract. IL they
depart from IL in any partiular,
they lose the right TO demand
the performance Of the contract SO II
they retake possession Of the stock and
control OF the Manchester company they
at once abandon their cause and open
up new ground Of refusal But is not
the electric company responsible for the
non action OF the Manchester company?
IL is in possession OF the whole property
Of this company. and in receipt OF ali
its income and profits by virtue OF a lease
the sole consideration Of which IS that
Il should guarantee the interest Of the
complainanJs.