Evening star., 1898-06-04
SUIT FOR AN ACCOUNTING
Action Instituted Against Receivers of the B.
and O. Railroad.
of Washington Branch
quiring Defendants to Appear.

Suit for accounting and the appoint
ment of receivers for the Washington
branch of the Baltimore and Ohio railroad
was instituted at Baltimore yesterday in
the United States court before Judge Nor
ris, as was foreshadowed in The Star sew
eral weeks ago. The court signed an or
der requiring Receivers Cowen and Murray
to show cause, by July 10, why the ac-
counting asked for should not be granted
and receiver or receivers appointed.
The suit was instituted by Messrs, Rever-
dy Johnson, one of the largest holders of
the common stock of the B. and o. COM
pany, and John ]. Donaldson, the executor
of the estate of Martha E. Gray. The ap-
plication was filed by Mr.. Bernard Carter,
in his capacity as counsel for the estate,
but who is also the principal attorney for
the Pennsylvania Railroad Company in
Baltimore.
The petition states that the Gray estate
holds seventy-siX shares of stock of the
Washington branch, of the par value of
$780, and that the suit Is in the interest of
all the other stockholders. 1t is further
stated that the entire capital stock of the
branch amounts to 49, 500 shares, of which
amount the Baltimore and Ohio Railroad
Company holds 1O,2SO shares, the state of
Maryland $500, and that the remainder,
10 shares, are held by various persons
1t is claimed by those instituting the suit
that the receivers have violated the char
ter of the company, especially that part of
the law passed by the Maryland legislature
in 1881. which provided among other
things, that the net profits, reserving not
more than 1 per cent for contingencies,
should be divided semi-annually among the
stockholders, and once in three years the
rT1 ifS chn ha ~,
like manner.
1t is further alleged that up to 1861 the
Washington branch had a rolling stock
equipment of its own, but at that time its
equipment was taken possession of by the
Baltimore and Ohio Railroad Company,
which has never accounted for the property
to the stockholders of the Washington
branch. 1t is further asserted that the
baltimore and Ohio Company has arbi-
trarily divided the net revenue of the
Washington branch in the proportion of
four-sevenths to the company and three
sevenths to the branch, after deducting
outlays for maintenance of the physical
structure of the branch road.
Ihe petitioner asserts that "eyen after
this arbitrary division the net revenues
were not divided among the stockholders,
as required by the act of assembly The
report of the president and directors of the
BaItimore and Ohio made November g.
1895, states that SS41, ,62S. IA of the net reye-
nue. of the Washington branch had been
retained In the hands of the Baltimore and
Ohio up to June 30, 1895, and credited to
the profit and loss account of the branch
IL the revenues had been fairly divided
among the stockholders a much larger sum
would be shown to be due from the COM
pany to the Washington branch.
No Dividend Declared.
Since November 1, 1896" 1t Is contended
no dividends have been declared from the
stock of the Washington branch on the
pretense that the earnings would be need
ed for permanent improvements. When
the dividend was first passed the company
had, by its own showing, a large undivided
surplus. 1t is claimed that none of the
mortgages or deeds of trust executed by
the company in any way affect the prop
erty or revenues of the Washington branch
ON December 10, 1887. the O,2SO shares of
washington branch stock held by the COM
pany were conveyed to the Mercantile
Trust and Deposit Company of Baltimore,
with other property, to secure the issue of
certain bonds"
In view of the above alleged facts the
counsel for the estate ask that the receiy-
ers or the Baltimore and Ohio should ac-
count to the stockholders of the Washing
ton branch for the rolling stock of the
branch claimed to have been taken and for
the revenues of the branch said to have
been withheld. 1t is further claimed that
whatever may be found due the stockhold-
ers should have priority over the claims
OF other creditors of the COMPANY