The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-05-02
L. E. & ST. L. LITIGATION
ARGUMENT AS TO DISTRIBUTION OF
THE ROLLING STOCK.
Contention of the Various MOrtgagees
Before Judge WoOds-An Argument
by senator Fairbanks.

Judge Woods was occupied in chambers
all day yesterday with the contentious OF
various parties in interest in the Louisville,
Evansville & St. Louis Railroad litigation.
The morning was occupied with argument
of counsel upon the question of approving
the report of Master Commissioner Fish
back upon the distribution of the rolling
stock and equipment Of the road. Mr.. Fish
back had concluded a long and intricate
report by recommending that such rolling
stock as had been purchased prior to the
execution of the consolidated mortgage
should be redistributed to the division that
originally owned it, and that all rolling
stock purchased by the consolidated COM
pany should go to the benefit of the con-
solidated mortgage after making proper de-
duction for such amounts as had been paid
upon it by the receivers out of the earn
ings of the various divisions. That is to
say, the divisional mortgages would get
credit for the equipment originally owned
by their divisions, and for the amounts
paid upon this equipments since the re-
ownership began, according to the proper
ton of earnings contributed by their divi-
sions, while the consolidated mortgages
should get the benefit Of all payments
made upon equipment from the time of the
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ownership.
The American Security and Trust Com
pany, acting for the bondholders of the
eastern division under the divisional mort
gage, objected to this apportionment, while
the New York Trust Company, acting for
the bondholders under the consolidated
mortgage, commended that it was proper.
In the argumen yesterday the New York
company was represented by Senator Fair
banks, Mr.. Byrne, of New York, and Blu
ford Wilson, of Springfield, ILL.,, while the
American Company was represented by
Judge Alex. p. Humphreys, of Louisville.
The controversy brought out a number of
interesting questions in equity. Judge
Humphreys commended that the franchise of
the old road, which afterwards became the
eastern division, did not perish with the
consolidation, but survived in the CONSOLE
dated company, and that all improvements
made under the terms of this particular
franchise by the consolidated company and
a pro rata proportion of the equipment
purchased by the consolidated company, as
well as all equipment purchased for par
ticular use upon this division should come
in under the divisional mortgage, which
contained a ACKNOWLEDGEMENTS"
clause. Mr.. Byrne confined his argument
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tate law concerning improvements or ac-
ceSSionS to m~ortgaged property could not
apply to personal, citing and discussing a
number of decisions to sustain his point.
Mr.. Wilson elaborated somewhat upon this
argument in a general way.
Senator Fairbanks set forth the main con-
tention of the consolidated bondhoiders-
that the divisional mortgages accepted
their security subject to any sale or con-
solidation that might be made by the con-
stituent companies, and that they We're en-
titled to only so much property as secured
their liens at the time of the execution of
the consolidated mortgage: He declared
that the contention of Judge Humphreys,
carried to its logical conclusion, would de-
mand that the Cannelton branch, which
was VIGOROUSLY worthless, could demand a
greater share in the division of the con-
solidated equipment than could the shorter
BelleVille branch, which earned nearly as
much as q i the rest of the road put to-
gether. Ne lrly all the attorneys made sec
ondary speeches, replying to points made
by the others, and Judge Woods asked
some rather leading questions. He asked
Judge Humphreys what was to become of
the equity Of one branch of the road, which
had no mortgage at all, II the 'future-ac-
quired-property'' clauses in the mortgag es
of other branches were to draw to them all
the equipment purchased under the CONSOLE
dation. In reply, Judge Humphreys made
somewhat clearer his theory that the diVt
sions were entitled to d division of equip
ment in proportion to the amount used uuon
them. If anything were to be inferred
from the hypothetical questions put by the
judge, it was that the apportionment will
be tentatively made and an accounting kept
in accordance with the method laid down in
the commissioners report, though it is pos
sible that in the final adjudication of the
matter these underlying mortgages can be
satisfied without disintegrating the prop
erty purchased under the consolidation.
In the afternoon the argumen was upon
an application made by Senator Fairbanks
that the Cannelton branch be cut off from
the system and surrendered to it's bond
holders. This was resisted by Floyd A.
Woods in behalf of the bondholders Of this
branch, who maintained that these bonds
were accepted upon the understanding that
this branch was to be a part of the general
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