The herald., 1897-10-27
On Mount Lowe Railroad
FOreClOsed
OPINION BY JUDGE VAN DYKE
MIXED UP EVIDENCE IN A SAN
PEDRO BATTERY CASE
An octogenarian Who Has Lost His
Mind-The Divorce Mill-New
Citizens-Court Calendar


posit and Trust company VS.. the Pasa-
dena and Mount Wilson Railway COM
pany ct al. was brought to a close yes
terday by Judge Van Dyke, who or
dered the foreclosure of the mortgage
held by the plaintiff as trustee for the
bondholders and the payment of ex-
penses incidental to the trusteeship.
In his opinion and decree the court
found "that the bonds in question were
issued by the defendant corporation in
regular form, and the trust deed to Sc
cure the bonds covers all the property
of the defendant, together with the fran
chises. 1t will be seen by reference to
the resolution embodied in the mortgage,
or deed of trust it says all of the prop
erty, real and personal, belonging to
said corporation or that may be here
after acquired All and sin
gular, the railroad and property afore-
said of the said party of the first part.
1t is conceded that this would cover all
the property. l view the object of the
clause, commencing with the word be-
ing to be to say where the property is
located. 1t will be observed the resolu-
tion does not show that the property is
even in Los Angeles county, and the
added portion is simply saying that the
property is located on the Sierra Madre
range of mountains in Los Angeles
county, California, but l don't think It
restricts at all the foregoing description.
I think that the mortgage is sufficient
as it is acknowledged and recorded, to
create a lien and security upon all the
property of the corporation, together
with it's franchise.
'By the civil code. section 456, the
power is conferred upon such corpora
tions to borrow upon the credit of the
corporation and to issue bonds and
notes and to secure the payment of
such bonds or notes they may mort
gage their corporate property and fran
chses, or may secure the payment of
such bonds or notes by deed of trust
of their corporate property and fran
chises.'
1.-THE demand for the bringing of the
suit in this case was on the written
request of the holders of the majority
of the said bonds in amount then out
standing and that the suit is main
tainable in their favor.
"In reference to the claims of the in
tervenor, Regan, and others standing
in like attitude, representing what is
called the labor claims, If there were
no statutory provisions in this state on
the subject 1 should be very much in
clined to follow the rule of the United
States supreme court, that is, that en-
ployes and laborers for a railroad COM
pany who keep the concern going. using
the expression in that case are entitled
to lien for their services in so keeping
it going. But l don't feel inclined to
overrule the statutes Of the state in
matter where it is within the power and
province of the legislature to enact
law.
1.-The court is not at liberty in interpret
ing the law to except therefrom mort
cages and trust deeds in the case of
railroad corporation. The act covers
every corporation doing business in this
state and the language is too plain to
be misunderstood. The so called labor
liens will, however, be preferred to all
claims, excepting those secured by this
trust deed.
I'm reference to the claim of the inter-
venor Brownback, 1 am forced to the
conclusion that there is no considera-
ton whatever for that judgment, and
that the whole thing is scheme to try
to defeat the claims of these bondhold-
ers. 1t is true the testimony shows that
the whole business of the corporation
was managed mostly by Prof. Lowe,
that he had the largest interest in it and
in carrying out the scheme. According
to my view there is no foundation at all
for the Brownback claim. To begin
WITH the railroad company had no pow
er to buy the bonds. The law gives a
railroad company the right to issue
bonds to raise money for legitimate pur-
poses, and to mortgage and pledge it's
property to secure the same. 1t can not
enter the market to buy up bonds, and
this railroad corporation as a corpora
ton never did do it, Prof. Lowe may
have done it, although the bonds have
not been produced and we have not seen
the receipts that were given for them.
1t is shown in evidence that the notes
exchanged for the receipts) on which
this judgment was confessed were is
sued as late as July of this year, year
after the road was in the hands of re-
ceivers and being operated by them;
further there was no minute on the
books of the company in reference to
the transaction at all until about the
time of the confession of Judgment in
fact, everything goes to show it was
gotten up recently for the purpose of
defeating these bond creditors.
"Ihave been handed a memorandum on
the part of the bond holders of what they
are willing to allow for expenses and
inasmuch as the expenses will in effect
be so much deducted from their claim
I suppose their wishes should be con-
suited. On the application for the re-
moval of the former trustee it was
found that such trustee was under the
control of influences hostile to the in
terests of the beneficiaries under the
trust and hostile to the foreclosure suit
under the trust deed, and said trustee
was removed for failure to perform his
duty and bad faith in reference to the
beneficiaries of the trust, and as 4 re-
suit no compensation will be allowed to
such trustee SO removed. A decree of
foreclosure and sale will be ordered,
and from the proceeds thereof will be
paid.
First, the expenses of the suit incud-
ing the sum of $3.50 to P. NJ. Green. as
trustee, and $4,000 to plaintiff as attor-
neys' fees in this action.
Second, Intervenor Westinghouse s
claim of $3223.69, with interest at seven
per cent per annum from March 49, 1897.