The evening times., 1898-09-19
TO PREVENT FORECLOSURE.
Certain Stockholders Seek to Re-
strain the Receivers.

~ - Asxi Ian L &oAt1ISASSS ~ AsA<s
Certain Stockholders Seek to Re-
strain the Receivers.
Baltimore, Sept ia suit to restrain
the proposed sale OF the Baltimore and
Ohio Railroad. under foreclosure pro-
ceedings, in accordance with the plan Of
reorganization, was instituted Saturday
In the United States circuit court. 1t
was brought by the holders of Baltimore
and Ohio first preferred stock. whose suit
to restrain the plan of reorganization
from being carried into effect is pending
in the same court. Messrs Bernard Car
ter, John j. Donaldson and Arthur
George Brown appear as the attorneys
for the stockholders in the suits. 1t is
regarded as a curious fact by some
people in this connection that Messrs.
Carter and Donaldson have long been
recognized as attorneys for the Pennsyl-
vania Railroad in this vicinity.
The assertion is made in the petition
of the stockholders that no occasion for
the proposed foreclosure sale of the Bal
timore and Ohio Railroad would have
arisen II Receivers Cowen and Murray
had acted in accordance with the courts
orders, and the terms of the railroads S
mortgages had been complied with
There never has been a time" the
petition declares, ''since the appointment
of the receivers, February g. 1896, when
| the excess of earnings over operating ex-
penses of the Baltimore and Ohio has
not been amply sufficient to meet all fixed
charges. That such was the case for the
years ended June 80, 1885, and June 80,
1897 is shown by the reports OF the presi-
dents and directors to the stockholders
| for those years. For the year ended June
SO 1898, the excess of earnings over op-
Grating expenses was not only sufficient
to pay such fixed charges, but to leave a
surplus besides
Reference is made in the petition to the
reports for the years 1896 and 1897, which
are filed in the case to substantiate those
years Then the petition continues:
In disregard of their duty and of the
courts order. the receivers, for the first
time since their appointment. have re-
Gently suffered a large amount of mort
gage interest to remain unpaid, thus sub
jecting the property of the Baltimore and
Ohio to the risk of foreclosure and sale
at the suit of one or more mortgage
creditors
THE receivers" the petition also al
| leges have diverted n large part of the
net earnings of the Baltimore and Ohio
to the payment of liabilities of other
railroad companies, as fully appears by
| their reports, and of liabilities of the
! Baltimore and Ohio not secured by liens
on the property, but have always, until
few months past, paid the interest on
/ all bonds secured by mortgage of the
! property Of the Baltimore and Ohio. They
| have, therefore, never until now expos
! ed the property TO the risk of forecloS-
| ure sale"
Continuing the petition states that mo
| part of the principal of the Baltimore
| and Ohio bonded debt secured by mort
| cages on its property is due or will be
| due for many years, and further default
| may precipitate the maturity of the
| whole mortgage debt, amounting to
many million dollars. The company now
is and always has been able, out of the
| net earnings, to meet all interest as It
| falls due, and by payments to the several
sinking funds to make proper provision
| for the payment of the principal when
due
Two sentences are quoted in the petit
| ton from the answers of Receivers
! Cowen and Murray TO the suit for the
! appointment of separate receivers for the
| Washington branch of the Baltimore and
| Ohio. One is: THE accounts and re-
ports show that the profits of the opera
tons of the the main line and branches
gave a balance, after paying all interest
| charges thereon for each year from 1888
| to 1896, inclusive The other sentence Is:
'"These receivers could not make such
payments on account of the sum appear
| ing by the books of account of the Balti-
more and Ohio Railroad Company as due
| the Washington, because by such pay
ments these receivers would divert the
earnings of the main stem and other
| lines in their chagre from the payment of
mortgage and other claims on the re-
spective lines 0o which. under the orders
| of the court, the earnings of each line
were primarily applicable) to the pay
ment of the claims OF the Washington
| branch stockholders on open account, in
favor of which no priority has ever been
| adjudged by the court"
The petitioners ask the court to grant
the following relief:
To order Receivers Cowen and Murray
| to pay out of funds in their hands all in
terest now due on mortgage debts of the
| Baltimore and Ohio, and if such funds be
| insufficient for the purpose, TO borrow
money in anticipation of future earnings.
To issue mandatory injunction
| against the Baltimore and Ohio Railroad
| Company, the Mercantile Trust and De-
| posit Company of Baltimore trustee un-
der the consolidated mortgage, and the
| receivers, requiring them TO carry out
| the provisions of the consolidated mort
| gage and prevent further default on any
of the prior mortgages.
To issue an injunction restraining
George C. Jenkins, George F. Crane and
| James Bond trustees under the mortgage
of 1872; William Keyser and William F
| Burns, trustees under the mortgage OF
1874, and the Mercantile Trust and De
posit Company of Baltimore, trustee un-
der the consolidated mortgage of 1888, from
declaring the principal of any of these
mortgages to be due by reason of any
default of interest, and from taking any
proceedings to foreclose by reason OF
such default
The petition is supplemental TO the sui
| instituted July % by holders of first pre-
| ferred stock to restrain the carrying into
effect of the reorganization plan. In the
absence of Judge Morris no order wa.
| passed on It.
Among the petitioners are State Of
Maryland, the Johns Hopkins University
the Eutaw Savings Bank, the Saving:
Bank of Baltimore and the Johns Hop
kins Hospital. The petitioners holt
about Is, 600 shares of the total issue Of
So, 0e0, 600 of first preferred stock.
Killed n Horse With n Club.
New York, Sept. 19.-Timothy Conlin