The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-01-19
TION FROM CANADIAN TO
U. S. COURTS
INVOLVING RAILWAY BONDS.
MORPHY, EWING & GILBERT WILL
FILE THE ACTION IN A FEW
DAYS.
EOreign Corporation Refuses to Ac-
cept a Settlement Suggested by
the Railway Company.

In the course Of the next few days
an important suit will be filed in the
United States circuit court for the dis
trict of Minnesota against the Chicago,
st. Paul & Kansas City Railway COM
pany, the Metropolitan Trust company,
Of New York city, and Robert H. Ben
son, of London, England. The plain
tiffs are the liquidators or receivers of
the Commercial bank, of Winnipeg,
Man. Messrs. Morphy, Ewing and
Gilbert, of st. Paul, are the attorneys
for the plaintiffs.
The suit is brought to recover judg-
ment against the Chicago, st. Paul &
Kansas City Railway company on
overdue coupons amounting to about
$4,000, which the Commercial bank re-
fuses to exchange for stock of the de-
PENDANT railway company and also to
compel the Metropolitan Trust COM
pany and r. H. Benson to begin fore
closure proceedings under the mortgage
deed, and. in the event of their refus-
ing, to have new trustees appointed
and the trusts enforced. The acI1on is
the result of a series of deals, some
what complicated in their aspect.
E. F. Morphy, Of counsel for plant
ifs, outlined the history of the matter
to G o b e reporter yesterday, in
substance as follows:
In 1888, the Minnesota Northwestern
Railroad company was reorganized I'M
der the name of the Chicago, ST. Paul
& Kansas City Railway company,
which latter company took over the
franchises and all the assets of the for
mer company. On Jan. 1, 1889, the
Kansas City railway company extend
ed general mortgage to the MetropOl-
ftan Trust Company of New York, and
Robert H. Benson, of London For the
purpose of paying off and retiring all
the bonds which had been issued by the
Minnesota Northwestern Railroad COM
pany, the Kansas City company issued
certain gold mortgage bonds which
they secured by the general mortgage
mentioned. The Commercial Bank of
Winnipeg became the owner of forty
five of these gold mortgage bonds of
the par value of $1,000 each. Suisse
quently, the Commercial bank became
insolvent, and liquidators or receivers
were duly appointed to wind up its af-
fairs. Among the assets of the bank
were these gold mortgage bonds, which
the liquidators now hold with 405 in
terest coupons of the value of $40 each,
all of which are overdue.
In the fall of 1892 reorganization of the
Chicago, st. Paul & Kansas City Railway
company was effected and under the reorgan-
iZation scheme the parties who controlled the
Kansas City company. incorporated under the
laws of Illinois under the name of the Chi
cago Great Western Railway company. This
last company leased from the Kansas City
company its rolling stock and franchises and
is now operating the road as a lessee. AS
a part of the reorganization scheme, the Chi
cago Great Western agreed to assume all the
rolling stock lease warrants and all the gold
mortgage bonds, and also agreed to exchange
for those bonds stock of the Chicago Great
Western.
At the time the last reorganization scheme
was approved of, a meeting of the stock
holders CT the Chicago, st. Paul & Kansas
City company was held in London and an
assessment was levied on the holders of the
gold mortgage bonds. The holders agreed
to exchange their bonds for stock in the Chi
cago Great Western.
On Nov. 2, 1892 the Chicago Great Western
made a trust deed to the Manhattan Trust
company, OF New York, to secure the holders
of the stocA When the bonds were sur
rendered they We're not cancelled, but they
Great Western Railway company, which COM
pany now holds all the bonds of the Kansas
City company except the 40 bonds in the
possession of the liGuidators of the CONNER
cial bank of Winnipeg.
1.-The Chicago Great Western, continued Mr..
Morphy,' has offered to give its stock in ex-
change for those forty-five bonds, but the
liquidators of the bank refuse to accept it.
Accordingly. Jan. 6, last, the liquidatoTs
applied to the court of Queens Bench for in
structions as to what course to take, and the
court ordered InelH 10 commence Ine suit
against the Chicago, st. Paul & Kansas City
Railway company, the Metropolitan Trust
company, of New York; and R. H. Benson, of
London, to enforce the payment of the over
due coupons and also to enforce the provis-
ions of the trust mortgage securing the bonds
held by the liquidators.
1.-The papers in the case concluded Mr..
Morphy, have just arrived from Winnipeg,
including copies of all the trust deeds and the
report of that meeting in London. The mat
ter is receiving my close attention, and the
action will be begun at once