The Republican. [volume] (Oakland, Md.) 1877-current, 1896-04-30


case, argued in the Court of Appeals
last week, is one of vast impor-
lance to the State. The case is an
appeal from an order passed by
Judge Stake, in the Circuit Court
of Washington county, extending
the time of the operation of the canal
by the trustees for the bondholders
of 1914 until May, 1891, six years
longer than the time granted by
Judge Alvey in his decree of October
2, 1890. That decree ordered the
sale Of the canal to satisfy its debts,
but suspended the operation of the
decree for four years, or until May,
l, 1895. During this time the canal
was to 60 into the hands of the trus-
tees of the bondholders of 1914 to
be repaired and operated by them.
This was done upon the theory that
according to the terms of the mort
gage which was given by the canal
company to secure those bonds, it
was lien upon the revenues and
tolls of the canal and not upon the
corpus of the work. Judge Alvey
did not decide this priority but
stated in the opinion which accom-
panied his decree that IN case of
of the sale of the canal the lien of
the State would be superior to that
of the bondholders of 1914, and in
order to give them an opportunity
to save themselves the canal was
given to them to repair and operate
for four years. If they could not
show at the end of that time that
the canal could e3af'Fa enough TO pay
operating expenses, costs of repair,
etc, then the decree for sale would
be enforced,
Apparently these conditions were
not fulfilled. The cost of repairing
the damage by the great freshet was
greater and the time required to
complete them longer than was an
ticlpated. Then there was a strike
in the coal mines and long inter
ruption of traffic by a drought.
The trustees further declared that
the time allowed by Judge Alvey
was not sufficient to justify people
in investing capital in boats and
otherwise in the canal. In consid-
GRAFTON of all these things Judge
Stake extended the time and gave
the trustees authority to make a
contract with a company to engage
in the transportation business. 1t
was said at the time that it was the
purpose OF this company to apply
electricity to the movement Of boats.
1t was from this order of Judge
Stake that the State took appeal
and asked that the decree for the
sale of the canal be executed and
that the court would embody in
decree the opinion Of Judge Alvey,
in which he decided that the lien of
the State under It's mortgages is prior
to the preferred bonds under the
act of 1874, and to be paid next af-
ter the half million repair bonds of
1873. The appeal was argued on
December 10, 1892. At the present
term reargument was ordered,
and the reargument was understood
to be limited to the single question
as to the order in which the credi-
tors Of the canal company are en-
titled to receive payment out of the
net proceeds of the sale of the canal.
This would seem to have some sig
nifcance of the decision of the
court upon the main question.
If the canal should be sold it
should bring several million dollars.
The interest of the Stat in the work
is as follows
Common stock ....... ................2 7SS,723 A
Preferred stock $4,000 %
Unpaid guaranteed dividends for
So years......... . l6S9OOO 90
Mortgage under the act of lSii...... 1OOO,00Q 90
Unpaid interest for 60 years....... 100000 M |
500 052, 72i A
Other claims are the bonds of 1914 |