The herald., 1896-12-17
THE STREET RAILROAD.
A Supreme Court Decision Affecting the
Los Angeles Electric Railroad.

A decision in the suit of the Illinois
Trust and Savings bank. plaintiff and
respondent, VS.. Pacific Railway COM
pany ct al, defendants and respondents.
s. ]. Hendy ct al, defendants and ap-
pellants, carried on appeal from this
county, was received yesterday from
the supreme court, wherein the judg-
ment of the lower court is affirmed.
The plaintiff brought this action to
foreclose a mortgage lien upon certain
street railroad property belonging to
the defendant, the Los Angeles Gable
Railway company, and consisting of all
the franchises, roadbeds, rolling stock,
and real and personal property in this
city.
On August "a, 1889, the Pacific Rail-
way company, having acquired major
ity of the stock of the defendant COM
pany, and being desirous of securing
funds to meet certain unsecured obliga-
tions of the latter corporation, and to
complete the construction of the system
of roads projected by 1t, and also with
a view to the ultimate purchase of all
the property of TIE Los Angeles Gable
Railway company, made an issue of
50, 500, 900 in bonds, and as security for
their payment executed to plaintiff as
trustee a deed of trust, intended as
gage, CONeTiIHS ali lHe Lltl6 the
grantor then had and all it might there
after acquire to all of the property above
mentioned.
On October 9, 1889, the railway COM
pany made deed to the Pacific Rail-
way company, intended to convey to the
latter all the property, and under this
deed the possession of tide property
passed formally into the hands of the
said Pacific Railway company.
n 1yy1v vsv,~r
arisen as to the validity of the trust
deed made by the last named company
to plaintiff, the railway company itself
made to plaintiff trust deed or mort
gage confirmatory of that of the Pa
cific Railway company, endorsing all
of its provisions, as further security for
the payemnt of the bonds and in this
deed the Pacific Railway company unit
ed as grantor.
1t is under these two trust deeds that
the plaintiffs lien was claimed, and un-
der which. default having been made
in the payment of the Indebtedness
thereby secured, decree was asked for
a sale of said property in satisfaction.
Certain third persons claiming liens
upon the mortgaged property were made
defendants in the action. OF these, Will
lam Alvord and Thomas Brown held
trust deed or mortgage executed to
them as trustees by the defendant Los
Angeles Gable Railway company on
September Is. 1887 given to secure an
issue of 1500. 900 in bonds made by the
later company, and which mortgage had
not been satisfied; M. l.. Coenan and F.
]. Coenan held a judgment lien upon
the property against the defendant Los
Angeles Gable Railway company for
SIS, ,376 81; and the estate of Joshua Hen
dy, deceased. held a lien of like char
acter under judgment recovered by
1t against the same company in the sum
of 2301712.
J. F. Crank was also made a defend
ant. While acting is receiver in the ac-
tion Of f, w. Russell against the Pacific
Railway company ct al. he issued certifi-
Gates amounting to s15,200 to secure
funds required in the management of
the road. These certificates were un-
liquidated al the commencement of this
action.
The trial court declared these GER
tificates. with others issued by the re-
ceiver in the present action, the first
lien upon the property, and entitled to
priority in payment; the mortgage claim
of Alvord & Brown, trustees, amount
ing to $1,323. 1895, with certain attor-
neys' and trustees fees, the second lien
the confirmatory deed of the Los Ange-
les Cable Railway company to the
plaintiff. given to secure the bonds OF
the Pdc1f1c Railway company, the third
lien, in the sum of $1.677 .106, together
with certain attorneys and trustees
fees; the judgment of the Colnans the
fourth lien, and the Judgment of the
Hendy estate the fifth lien, and directei i
the property to be sold and the proceeds
applied, after the payment of costs and
expenses to the extinguishmen of said
liens in the order named
/ The trust deed given by the Pacifc
Railroad company to plaintiff. and the
| deed of the Los Angeles Gable Railway
company to the Pacific Railway COM
pany, purporting to convey said proper
ty to the latter, were held to be unau-
! thorized and void; but the Indebtedness
created by the bonds of the Pacific Rail
way company was held valid and SUB
sisting. and it was adjudged that should
the proceeds of the sale of the mortgaged
| property prove insufficient to satisfy
said last named Indebtedness, tht
plaintiff should have judgment for th.
| deficiency against the Pacific Railway
company.
The only parties dissatisfied with the
| decree were the representatives of tn,
estate of Hen9y, deceased, and they ap
pealed from the judgment upon tn,
judgment roll-the several objection.
urged being. it is claimed, such as arise
upon the face of that record. They con
tended that the court a. erred in de