The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-07-24
B. AND 0. R~ECEIyERSHIPS.
AN ORDER PERMITTING APPOINT
MENTs IN THREE WESTERN sTATES.

This Action IL Preliminary TO the Foreclosure
: or n Collateral Mortgage on the Chicago
Branch or tho R~Riiroad-Tho Union Trust
Company Asks TO share In n Dividend.
BALTIMORE. July 23.-Judges Goff and Nor
ris. sitting in the United States Circuit Court,
decided to-day to allow the trustees under the
collateral mortgage bonds of 81 GOO, 900 on the
fillmore and Ohio and Chicago Railroad TO
ask in the courts of Indiana, Illinois, and Ohio
for tho appointment Of receivers for that d.
vision of tho road, preliminary to the fore
closure OF the mortgages. The decision was the
result OF n compromise reached during the prog
ress OF the argumen of the case. The Judges
passed an order that the petition filed here for
authority to sue should stand over in this court;
that the mortgage trustees should ask for the
appointment OF receivers for the Chicago d.
vision, and should proceed as advised by the
courts, but that no application for the physical
possession of the property of tho Chicago d.
vision should be made without first applying to
this court, which was the court Of primary juris-
diction in the matter. and that the present re-
ccivers OF the Baltimore and Ohio should not DO
made parties to the suit.
This was all readily agreed to by the attorneys
for the trustees under the mortgage. The result
will DO that receivers for the Chicago division
of the Baltimore and Ohio will DO appointed by
the western courts and they will come to Balti-
more to ask for possession of the property. As
explained in court, there are two mortgages in
volved in tho suit. The Baltimore and Ohio
Company, which owned the stock. placed n
mortgage OF $4,000 900 on the Chicago di.
vision on May 2, 1877. On May 81 of that year
they made another mortgage. pledging the
original bond and the stock of tho road as col.
lateral. This is the mortgage the interest on
which was defaulted on June /. 1t is the origi-
nal mortgage which is about to DO foreclosed.
The trustees are the same in both matters.
John n. Steele OF Messrs. Steele, Semmes
Carey & Bond filed in the United States Court
on behalf Of the Union Trust Company OF New
York, a petition asking that the court direct tho
holders of tho Baltimore and Ohio TO pay the
receivers OF the bonds issued under the mort
gage of $4,000, 600 Of Feb. l, 1855, the inter-
est accruing and falling due Aug. 1, 1897. and
to afford TO them tho benefit of all the security
given under tho consolidated mortgages of 1887,
for $29. 900, 600. held by the Mercantile Trust
Company OF New York. The Union Trust Com
pany is trustee under the second mortgage bond
of 1885 OF the Pittsburg and Connellsville
Railroad. 1t is asserted in the petition
that an agreement was made at the
time with the Baltimore and Ohio Com
pany that these bonds would DO included
in any later consolidated mortgages. and that
no later obligations would be included in such
mortgages: 1t is alleged that since then a mort.
gage has been given and included within the
consolidated mortgage of 1887 for s., 800. 900.
1t is further alleged that the receivers have de-
ciared their intention. of paying interest on Aug.
l on Sl2. 200, 900 OF the consolidated mortgage
bonds. The receivers have also declared their
intention of defaulting on Aug. l as to the in
terest on tho second mortgage bonds of 1885 TO
the value OF $40, ZOO. o
Mr.. Steele asked the court that a day be set
before Aug. l for hearing argument on this Pc
tition. Lawyers Johnson. Bond. and Whyte all
objected to this. and wanted the matter put of
until after the middle OF September. Judge Gof
said that II could not possibly be heard before
Aug. l. Then Mr.. steele said he would ask for
an injunction restraining the receivers from
paying interest on the consolidated mortgage
bond on Aug. unless they paid interest on the
other BONDS also. OBJ ection 10 thus was mace,
amended so as to ask AN injunction restraining
the receivers from paying the August interest
and the whole matter went over until Septcm.
Der.