The record-union., 1899-06-30
SUIT ON RAILROAD BONDS.
BROUGHT TO PROTECT HOLD
Frs RIGHTS.
u. 0. and Ogden Mills, as Trustees
for the Bondholders, Begin
the Action.

Darius o. Mills and Ogden NILS
trustees for holders of bonds on the
railroad properties Of the Central IA
caIc Railroad Company, have brought
SUIT In the Superior Court to foreclose
a mortgage against the Central Paclnc
railroad Company, the United States
or America, the Metropolitan trust
company Of New York City, and the
southern Pacific Company. The last
three corporations are named as de-
PENDANTS because, it is alleged, they
claim to have an interest in the Cen
trail Pacific Railroad Company of Cal
ifornia.
The complaint recites that on July
70, 1865, the Central Pacific Railroad
Company of California gave to the
plaintiffs, D. O. Mills and w. E. Bar
ron, as trustees, a mortgage or deeu
of trust, by which was conveyed to
them that portion of the road between
Sacramento City to the eastern boundary
of the State, then completed or in pro-
cess of construction, including roadway,
track, depots, depot grounds, rolling
stock, etc. subsequently Trustee Bar
ron died, and Ogden Mills succeeded
him.
The complaint further recites that
the mortgage was executed and dellV-
cred to secure pro rata equally the
payment of the principal and interest
of certain bonds of the mortgagor COM
pany, known as it's first mortgage
bonds, series A, B, c and D, the bonds
of series A to bear date of July l.,
1895, to the number 5000, valued at
$1,000 each; G and D to include LOCO
bonds each of the 81 goo denomination,
and to include the remainder of the
first mortgage bonds authorized to be
issued ON the railroads.
In accordance with the provisions of
the mortgage the mortgagor company
issued it's first mortgage bonds, series
A, to the principal amount of $685.
600, consisting of 1896 bonds. The
bonds were sold by the mortgagor
company to divers persons, and are
now all outstanding.
1t is further recited that the mort
gage provides that in case of default
in payment. and in case the bonds
remain unpaid for the period of six
months from and after the time due,
that the trustees might, upon request
OF the holder or holders of not less
than fifty of the bonds, dispose of or
sell all rights, property, franchises, real
or personal granted by the mortgage,
and out of the moneys arising from
such sale pay for foreclosure proceed
ings, etc, and distribute the residue
among the holders of the bonds.
According to the complaint, in April,
1885, an indenture was made between
the Central Pacific Railroad Company
and D. o. Mills, the surviving trustee.
extending the time of payment of series
A of the first mortgage bonds, until
January l, 1898, and that on August D..
1897, further agreement was made
whereby the time of payment was ex-
tended until December 1, 1898. 1t is
further recited that on December /,
1898, the series were due, but were
not paid. and that it remained unpaid
for the period of six months thereafter,
and the plaintiffs thereupon ask that
the mortgage be foreclosed.
1t is set forth that the United States
of America, the Metropolitan Trust
Company of New York City, and the
Southern Pacific Company claim to
have some interest or lien on the prop
erty, hence they were made defend
ants.
The attorneys for the plaintiffs are
Rodgers, Paterson & Slack of San
Francisco. The complaint consists of
seventeen pages of closely printed
matter.
MR. PATERSON EXPLAINS.
Mr. Paterson thus explains the ma
ture and cause of the action:
This action was brought to fore
close the lien of series A of the first
mortgage bonds of the Central Pacific
Railroad Company, issued July %,
1860, to D. o. Mills and William E.
Barron, as trustees. The face value
of all the bonds secured by the mort
gage is S6,3IS.oOO The mortgage COW
ers the properties of the Central Pa
cific Railroad Company from Sacra-
mento to the eastern boundary of Cal
ifornia.
THE bonds matured July /, 1893,
but on April %, 1895, the trustees,
with the consent of bondholders,
extended the time Of payment until
January /, 1898. On August ), 1897, a
further extension of time was granted
until the 1st day of December, 1898.
The company having failed to make
payment within the time stipulated.
on June 81, 1899, the holders Of more
than fifty bonds requested the trustees
to commence foreclosure proceedings.
AS the bonds matured on July /,
1890 the statute of limitations would
run against the bonds within four
years thereafter. or on July i, 1899.
1t was necessary, therefore, in the pro-
lection of their rights. as against sub
sequent lienholders. that the bond
holders should file this suit to prevent
the running of thesstatute against their
claims, and the suit is brought for that
purpose alone, as l understand it. AT
least we are not instructed to do any
thing more than to file complaint.
1.-The action is necessarily brought in
one of the four counties through which
the road covered by the mortgage ex-
tends. namely, Sacramento, Placer Ne
vada and Sierra. We do not expect q