The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1898-03-02
Central Vermont Affairs. gT-x

nad the 1OllOWlng interesting report OF
| Central Vermont cases in United States
Circuit Court:
In the United States Circuit Court
yesterday an important hearing came
up in the Central Vermont litigation.
1t appeared that about one year ago the
American Loan aud Trust Company, of
Boston, filed bill toyforeclose the first
mortgage of the Central Vermont rail-
road. To this bill Hon. B. F. Fifeld,
counsel for the Central Vermont, inter-
posed demurrer for the defendants,
because the same was filed without
leave of court, and hearing was had
thereon last summer. The opinion of
the court was suspended until last week,
when Judge Wheeler gave his opinion
sustaining the demurrer and ordering
the bill dismissed unless the orators
chose to file bill in the case of the
Grand Trunk Railway Company against
The Central Vermont Railroad Company
within limited time. In the mean time,
about last October, the American Loan
and Trust Company filed bill to fore
close the second mortgage of the Central
Vermont Railroad company and to this
bill in November last, Mr.. Fiield also
interposed the same objection that he
had interpose to the first mortgage bill,
as before stated. The hearing came
yesterday on the objections to the sec
ond mortgage bill.
Mr.. Fi6eld insisted that the opinion
of the court announced last week on
the first mortgage bill controlled the
disposition of the case on the second
mortgage bill and that the case should
| ha
behalf of the orators by Mr.. Howe OF
Boston, and Mr.. Crawford of New
York After their argument were con-
cluded j. G. Coombs, Esq, of Boston,
presented petition on behalf Of
leading national bank of Boston, who
are judging creditors to the amount of
$l00, 900, asking leave to become de-
PENDANT in the Grand Trunk cause. On
presentation of this petition he assailed
the bondholders agreement with the
Grand Trunk Railway Company which
was ratified at a meeting of the bond
holders last autumn, insisting that it
was device gotten up by the Grand
Trunk railway to secure the entire
property to the inevitable injury or ex-
clusion of every class of creditors of the
Central Vermont. We give below
summary of his remarks, which show
the inside machinery by which the plan
OF reorganization was gotten up: The
bank was represented by j. G. Coom5s
and W. II. Leonard.
The claim is perhaps the largest unse-
cured one in the case. Mr.. Coombs said
in substance: "The motion which l
have to present might perhaps be sub
mitted as well as in chambers. On the
other hand there are those here who 1
think from what they have said would
like to hear it will adopt either course
it is suggested that I go on. The
court can stop me at any time.
My client has judgment of the
courts of Massachusetts for over $780,
900 against the Central Vermont Rail
road Company. 1t was obtained last
month. 1t cannot be levied upon prop
erty there or here without the consent
of the court. There is property of the
defendant in both states not subject to
any alleged mortgage nor necessary to
the operation of the roads. We ask for
an order on the receivers to pay the
claim or to release such property to be
lieved upon. If we obtain this and it
is sufficient that satisfies us, otherwise
we 60 further and to that end we wish
to change the position which we have
hitherto occupied in this case for rea-
sons which l will state.
Let me first call some attention to
the origin and equity of our claim. On
the 10th day of December, 1896, the
Central Vermont Railroad Company
borrowed 100000 of our bank on it's
own unsecured notes. believe though
this is not stated in the petition that it
used the money to pay the coupons on
the first mortgage bonds maturing JAN
uary l, 1896, and on the 7th of Janu-
airy, 1897, the company mortgaged it's
entire net income to the Grand Trunk
Railway Company to secure hundreds
of thousands of traffic balances, alleged
to be due to it. This mortgage of the
future was apparently all that it had
left unencumbered and within sixty
days the Grand Trunk brought this
original bill asserting its lien on the
income disclosing the insolvency of the
Central Vermont and making some
company denying the fraud admitted
all the other allegations and consented
to the appointment of receivers few
days before the maturity of the first of
our notes. 1t is said that the mort
gage of the income had been in con-
temptation for nearly year before, and
it would seem that the making of it and
the other action must have been anti
cipated when our money was taken.
Immediately after the appointment
of receiver an attorney not thereto
fore counsel for the bank, waited upon
it and said that he was associated with
other counsel who were assembling the
first mortgage bonds and would repre-
sent them in reorganization and would
thus be in position to look out for
and protect the banks claim better
than anybody else could possibly do.
The counsel were seen and they said
that while they expected to represent
the bondholders they as yet had no
standing in The case and could obtain
none unless they could represent some
unsecured claim on which they might
intervene and 30 protect the interests
| thew. renresented and that If the hank