The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1896-12-27
A RAIL ROAD
WILL Be SOLD
Final Foreclosure of At
lantic & Pacific Mort
cages.
Judge Ross Decree Will Throw
a Big Property On the
Market.
The Action Was by the United States
Trust Co. TO Recover Debts
Long Overdue.

The decree of foreclosure and sale OF
the Atlantic and Pacific Railroad made
recently by Judge Ross in Los Angeles
was filed in the United States Circuit
Court yesterday. This is an action in
equity brought by the United States
Trust Company against the Atlantic and
Pacific, the Atchison. Topeka and Santa
Fe, the st. Louis and San Francisco and
Aldace F. Walker and John J. McCook as
receivers of the st. Louis and San Fran
cisco and Atchison. Topeka and Santa Fe
and against the Boston Safe Deposit Com
pany, holder in trust of the secondary
mortgages Of 1880 and 1887.
AS all of the property of the defendants
does not lie within the jurisdiction of any
one United States Circuit Court it was
necessary to bring action in every district
in which the railroad owned pro perty.
The Circuit Court of New Mexico was the
court of primary decree, and last April it
decreed the foreclosure and sale of the
property within its Jurisdictions. Similar
DEGREES have been made in the Arizona
and northern and southern districts OF
California. The sale will take place in
Gallup New Mexico. All of the legal pro-
ceedings since the New Mexico decree
have been pro lorna.
Judge Ross in his decree tells the his
tory of the defendant corporation, which
formed by an act of Congress IN July,
1866 On the Goth of April, 1871, Congress
authorized the corporation to mortgage its
property and franchise, in order to pro-
cure advances for the purpose Of complet-
ing the road. On July l, 1880. the Atlantic
and Pacific, acting under the power given
it by Congress IN 1871, issued bonds to the
amount OF $l6000,000, and secured the
debt thus contracted by mortgage or
deed OF trust Of its franchise and all its
property. This is known as the Western
Division mortgage, and is first lien upon
the property of the railroad. Tue deed
was delivered to the plaintiff, namely, the
United States Trust Company of New
York, as trustee for the holders of the
bonds.
The bonds are nearly all for $1,000, bear
ing per cent interest. Prior to the issu-
ance of the bonds the Atchison, Topeka
and Santa Fe Railroad had acquired con-
troll of the Atlantic and Pacific by pur-
chase of the ma jor portion OF its capital
stock. The bonds were, in TACT, issued by
the two controlling corporations to raise
funds for the completion OF the line from
Albuquerque to Needles. The Atchison,
Topeka and Santa Fe and tie ST. Louis
and San Francisco entered into compac ct
with the Atlantic and Pacific and with
the complainant trustees, the United
States Trust Company OF New YORK, by
which thew agreed that if the earnings
from the Western Division should prove
insufficient to pay the coupons as they
matured they, the Atchison and Topeka
and the ST. Louis and San Francisco,
would make good the deficit pro rata.
In 1880 and 1887 more bonds were issued
and mortgages given, but those liens
were secondary to the Western Division
mortgage. The 6-per cent interest cou-
pons became due in 1894-95-96 were not
paid, apd the total interest unpaid now
amounts to $2.666 CSC C., less $S3, 1923 81
paid to the trust company.
JUDGE Ross decree orders the Atlantic
and Pacific Railroad to pay the entire
amount of interest accrued, So, 5S2 S43 16,
within thirty days from date. In DEFAULT
of such payment the property of the At
lantic and Pacific will be sold to the high
est bidder.