The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1898-05-26


Held A Decision Which Means
Much to the Business Interests of
North Carolina.
The people of North Carolina es-
pecially those resident in that section
OF the State traversed by the Cape
Fear and Yadkin Valley Railway,
must receive with great satisfaction
the recent decision of the United
States Circuit Court of Appeals, for
the Fourth Circuit, in the case of
Charles Adolphe Low and others VS..
William H. Blackford and others,
which ailirms the decision Of Judge
SimOntOn, of the Circuit Court, and
holds that sale Of said Railway, by
division, under the circumstances in
the case, would be inequitable, and
decreeding that the property must
be sold in its entirety. This decision
means much to the business interest
of North Carolina, as hastv review
Of the facts involved must demon
strate. For some years the Cape
Fear and Yadkin Valley Railway has
been in the hands of a Receiver.
pending a contest in the Courts be
tween the holders of several series
of bonds. The First Mortgage covers
all the Railroad Lines. except the
branches, and was executed to
secure three separate series of bonds.
designated Series A." ..Series B.
and Series c." each series of bonds
being first lien upon a certain des-
ignated division of the Railway, and
second lien upon the other two
Divisions. The main line from Will
mington to Mount Airy is two humid
red and forty-eight and one quarter
miles. The bonds in ..Scries a. are
first lien on that portion Of the
road which lies between Greensboro
and Fayetteville and Fayetteville and
the South Carolina Line, about one
hundred and forty-four miles in all,
known as ..Division A" The bonds
in Series b. are first lien on that
portion of the road situated between
Greensboro and Mount Airy. about
seventy miles in length, known as
s'Division b. The bonds of Series
CO. are a first lien on that portion Of
the road between Fayetteville and
Wilmington, about eighty-one miles
in length, known as .'Division c."
The bonds of each Of these several
series are also subordinate liens
upon each of the other Divisions,
respectively. The Second or Con-
solidated Mortgage embraces all the
lines in the First and also the
branches.
The contention is between the
plaintiffs, Charles Adolphe Low and
others, claiming to be the Commit
tee representing Series AZ bond
holders, and the defendants, William
H. Blackford and others, a Commit
tee of the holders of the bonds of the
three different series. The first are
known as the New York Commit
tee and the last as the baltimore
Committce;' the New York Commit
tee, claiming that the Railway should
be offered for sale by the Divisions
and as an entirety, while the claim
of the Baltimore Committee, is, that
it should be sold as an entirety.
Judge Simonton, in most able
and carefully prepared opinion, re-
views the facts, discusses fully the
equities, and applies the law. The
Circuit Court of Appeals quotes, with
approval, from his opinion where he
says: This Railway Company
derives all its powers and privileges
from the State which created it, and
the bondholders enjoy the security
of the mortgage, because the act of
the Legislature granted this power
to the Railway Company. The pur-
pose and intent of the State was to
secure an entire line of railway from
its principal seaport to the Virginia
line. 1t granted the franchise to the
| company as an entirety, ONE IN
DIVISIBLE FRANCHISE, granite d
for the purpose of constructing and
continuing an ENTIRE CONTINU-
Gus LINE of road If,
therefore, the property were offered
for sale at auction in separte di-
visions, it could, probably would,
result in disruption of the entire
| System, against the purpose Of, and
defeat the end sought by the State,
for which the corporation was crea-
ted. and to which it owes its existence
and its powers-will be inconsistent
with the general tenor of the mort
gage itself; and will utterly destroy
an important incident in the value
Of each division"
| Judge SimOnton, further elabo-
rates the injurious effects to result,
to the State and its business interest,
in defeating the object and purposes
for which the franchise of this com
panv was granted. The New York
| bOndholders seek to divide the fran
chise: the Court holds sale by divis.
ion, would destroy it entirely The
Court, it its opinion provides for al
equitable division, of the proceeds o.
sale among the bondholders. of the
respective series, and the Circui,
Court of Appeals, in the elaborate
opinion of Judge Golf, approves tn,
| conclusions reached, and aiiirms the
decision in its entirety.
This means much for the people OF
| North Carolina. 1t is a distinct
recognition on the part of the Fed
eral Judiciary. of a duty to enforc,
| lne iaWS OF the state, IN dealing VIII
corporations chartered under thos,
laws. and as such we hail and ap-
plaud it. 1t is useless to 90 into
any details as to the disastrous re
suit which would inevitably follow
the sale of the Cape Fear and Yad
kin Valley Railway in divisions
disintegration would inevitably fol
! low. The great purpose for which i
was incorporated. to-wit:-a Tailwa,
from our great seaport on the Allan
tic to the Virginia line would be de
feated. the benefits of competition
would be lost. and these separated
divisions would be absorbed by riva
corporations. indifferent to the vel
fare Of the people. and looking only
to corporate ACKNOWLEDGEMENT and tn,