The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-07-02
JUST AS WAS EXPECT
HE DENIES THE PRIVILEGES OF
TRYING IN STATE COURTS.
THE RESTRAINING ORDER CONTINUED
It Will be Continued Until Special Master Kerr
Craige Makes His Report as to Fraud
This Report Will Not be
Made at Once.


The following is the full text of Judge
SimontOn's decision in the important
lease case:
The United States of America, Western
District of North Carolina-In the Cir
cult Court-Fourth Circuit-In Equity.
The Southern Railway Company VS..
the North Carolina Railroad Company
and others.
The Southern Railway Company com
plainant, because the purchaser at sundry
sales for foreclosure, under order of the
Court, of the property of the Richmond
and Danville Railroad Company. Among
other assets of the debtor company, was
a lease of the North Carolina Railroad,
dated 18th September, 1871, for the term
of thirty years. This lease was pur-
chased by and became the property of
the complainant.
In August, 1895, as the result negotia-
ton between the Southern Railway Com
pany and the North Carolina Railroad
Company, a new lease was executed by
the last named company to the Southern
Railway Company, of all its property and
franchises, for a new term of ninety
years, upon an increased rental, and GER
tain other provisions, more beneficial to
the lessor than in the former lease, and
by the provision of this new lease the
termination of the former lease was
anticipated, and it was declared to be at
an end on 31st December, 1895, the new
lease taking it's place.
The North Carolina Railroad Company
is a corporation of the State of North
Carolina. Three-fourths of its capital
stock, represented by certificate of
shares, is owned by the State. One
fourth of the capital stock is owned by
private persons. Its affairs are man
aged by a board of directors. OF these
eight represent the States interest and
they are appointed by the Governor of
the State by and with the consent of the
council, and are removable at PLEASURE
by the same method. Four of the direc-
tors are elected by the private stock
holders exclusively. Al the directors ap-
pointed or elected represent and con-
troll the corporation, subject to the APP
prevail of the stockholders in meeting as
sembled. At such meeting the shares
held by the State are represented by
proxy, appointed and removable in the
same way as the directors on the part of
the State are appointed and removed.
This lease for ninety-nine years having
been executed by the board of directors,
by the unanimous vote of the entire body,
and having been approved by the like
vote of meeting of stockholders, Great
ed a great deal of discussion in the State
of North Carolina on the hustings and
elsewhere. It's legality and expediency
both were challenged and threats were
made by men of influence and position
to break the lease. Efforts were made to
obtain action upon the part of the Leg
islature to this end. And, although these
efforts did not meet with success, it was
manifest that there was a fixed deter
mination to obtain if possible the end in
view by suit and other means.
Under the laws of North Carolina the
right to bring suits with regard to the
property and claims of property of the
State rests wholly with the Governor
and the Attorney General.
Under these circumstances the South
ern Railway Company filed its bill in this
court setting forh substantially the
this lease, declaring it to be an important
and essential link of it's line of inter
communication between the States on the
Atlantic coast and the Gulf, praying that
these be investigated and that its rights
and equities be adjusted and established
and put at rest. To this end it made the
North Carolina Railroad Company, the
corporation, defendant, as representa-
tive of it's stockholders. 1t made also
defendants, the Hon. -. L. Russell, the
Governor of North Carolina, and the
Hon. Zebulon Vance Walser, Attorney
General of North Carolina, the officers
selected and designated by the General
Assembly as in charge of all suits con-
nected with the property and right of
property of the State, the dominant stock
holder in the corporation. 1t added the
proxy of the State authorized to cast its
vote on all questions determining the ac-
ton of the corporation, and it included
as defendants S. B. Alexander and 9th
ers, who were the president and directors
under whose administration the lease was
made. The bill prayed the establishment
of the rights of complainant in its lease
and the injunction necessary to protect
them therein.
Upon the filing of the bill, recognizing
the large interests and very grave ques-
lions involved, questions the solution of
which one way or other could only be
reached by exhaustive discussion and
careful determination, requiring the aid
of learned counsel, the usual rule to show
e l'.aued on Third Page.)