The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1898-05-05
CAPE FEAR AND
YADKIN VALLEY
The Road Will be Sold as
An Entirety.
IN COURT OF APPEALS
TIE OPINION is WRITTEN by
JUDGE GOFF
JUDGE THOMAS R. PURNELL DISSENTS
Past Due interest Coupons are TO be Paid
Before the Principal Of The Bonds. The
Case Began in 1894 and Was
Argued Last November.
Argued Last November.


kin Valley Railroad case has ut last
been decided by the United States Cir
cult Court of Appeals.
The opinion is a very long one and was
written by Judge Golf, Judge Purncll
dissenting. There are two points deci-
ded in the opinion:
/. That the past due interest coupons
are to be paid before the principal of the
bonds
.. That the road shall be sold as an
entirety.
Concluding as we do that Il sale by
divisions would under the circumstances
of this case be inequitable, it follows, we
think. that the double method insisted
upon by the appellants would be improp-
er for the reason among others. that as
the court would not confirm divisional
sale, the bids could only be used as II
mode of ascertaining the relative values
OF the different interests, for which pur-
pose they would, in our opinion, for the
reasons given be useless
The duty of the court in directing the
method of sale in n case like this is both
difficult and delicate. The interests APP
pealing to it, each and all of them en-
titled to the same careful consideration
are many and conflicting. Here is a
struggle between the holders of the three
series of bonds, q contest as to a part of
the property between those claiming I'M
der the first mortgage and those under
the consolidated mortgage, an effort by
the bondholders under the latter to save
from the general wreck some little part,
if possible, of their unfortunate invest
ments, and here also in submission to the
courts decree are the interests of the
mortgagor and the rights of the public"
Mercantile Trust Company, of Balti-
more, the trustee in the second mortgage,
known as the consolidated mortgage"
dated October j, 1889, was made party
defendant, and subsequently when it re-
signed its trust, William A. Lash was
substituted as trustee under the mort
gage, and as defndant in the suit. A
cross-bill was filed by said Lash as trus-
tee of the second or consolidated mort
gage, in which he prayed that it also
might be foreclosed. The first mort
gage covers all of the railroad lines, ex
cept the branches, while the second or
the lines in the first, and also includes
the branch lines. The first mortgage is
given to secure three separate series of
bonds, designated, respectively, as ''Se-
ries A, Series b." and Series c."
bonds. Each series of bonds has "A first
lien upon certain designated division
of the railroad, and second lien upon
the other two divisions. The main line
from Wilmington to Mount Airy is two
hundred and forty-eight and one-quarter
miles line. Division A" is that portion
Of the road which lies between Greens
boro and Fayetteville and Fayetteville
and the South Carolina line. about IA
miles in all, of which 463l miles is made
up of the line from Fayetteville to the
South Carolina line; on this division "Se-
ries AZ bonds are first lien, and they
are also n lien in common with Series
c. bonds, but subordinate TO Series II"
bonds, upon that portion of the road sit
mated between Greensboro and Mount
Airy, and also n lien in common with
Series b. bonds, but subordinate to
Series CO. bonds, on that portion of the
road between Fayetteville and Whining
ton.
division Il" is that portion of the
road situated between Greensboro and
Mount Airy, about 20 miles in length;
on this division Series B. bonds are a
first lien, and they are also lien in
common with ''Series G" bonds, but sub
ordinate to Series Az bonds upon that
portion of the road which lies between
Greensboro and Fayetteville, and Fay
etteyille and the South Carolina
line. and also lien in common
with ''Series A" bonds, but subordinate
to Series CO bonds on that portion of
the road between Fayetteville and Will
mington.
division G." is that portion of the
road between Fayetteville and Winning
ton, about 81 miles in length; on TINS
division Series G." bonds are first lien,
and they are also a lien in common with
Series By bonds, but subordinate to
Series A" bonds, on that portion which
lies between Greensboro and Fayetteville
and Fayetteville and the South Carolina
line, and also a lien in common with Sc
ries b" bonds, on that portion Of the
road located between Greensboro and
Mount Airy.
The Cape Fear and Yadkin Valley
Railway Company is the successor TO the
Western Railroad Company, a corpora-
ton created by the act of December "a.
1852, passed by the General Assembly
of North Carolina. That portion of the
Cape Fear and Yadkin Valley Railway
now known rs division AZ had been
constructed and operated by the Western
Railroad Company. Those parts of the
road now called divisions 3D. and ''C''
were built by the Cape Fear and Yad-
kin Valley Railway Company, whose cor
porate existence dates from March i
1879. 1t also constructed a number OF
branch lines, in aid of both its local and
through business, now known as the
Factory branch, the Madison branch, the
Granite branch, the Furnace branch, tho
Aldrich Quarry branch, and the Buff
Quarry branch. The South Carolina Pa
cifc Railway, which is ten one-half miles
long. running from Bennettsvile to the
North Carolina line, has been leased anG