The times. [volume] (Washington [D.C.]) 1897-1901, 1900-06-07
SUIT FILED BY CREDITORS
Sale of The Capital Railway Al
legged TO Have Been Void.
The Equity Court Asked to Enforce
Judgments Obtained mt Law for
Personal Inturies-RiEht of the
Company to Dispose of Its Fran
chise Involved-The Contentious.

Suit was filed in equity yesterday by Otto
c. Haarar. William F. Barker, and Leu S
Rosenberg, against the Capital Railway
Company. the Washington Traction and
Electric Company. James b. Lackey, and
others. The bill alleges that the three
compliments were among those who we're
injured in an accident which occurred en-
one Of the cars of the first named defend
ant on the 10th Gay of july. 1898. and that
they have recovered judgments respectively
in the sums of $4,000. $3.50. and 5000
against the railway company. 1t is also
stated that execution has been issued upon
their judgments. which has been returned
by the marshal, "nulla BONA and that
they file their bill as judgment creditors
and on behalf of other creditors CT the said
railway company, as may intervene.
1t is also alleged that of the 1000 shares
of the capital stock of the railway COM
pany $50 arc owned by the Washington
Traction and Electric Company. the other
shares standing in the names of persons
who constitute the directory of the rail-
way company. 1t is also said that the
Washington Traction and Electric Company
is the owner and controller Of all the city
railways of the District OF Columbia. with
pany and practically constitutes the Capt.
tai Railway Company. That at the time of
the purchase by the Traction Company OF
the Capital Railway Company there we're
pending against the said railway company
q large number of suits. both on open &C
counts and for damages, in great number
of which judgments have been obtained.
and that the causes Of actioG in all of the
cases arose before the purchase of the Cap
tai Raj
Company.
1t is also stated that at the time of the
purchase of the railway company the prop
erty and assets thereof were encountered
by three deeds of trust, securing certain
bonds and that these bonds were subse-
quently acquired by the Washington Trac-
ton and Electric Company and the Capital
Railway Company. 1t is further alleged
that the Traction and Electric Company.
for the purpose of obtaining possession
and control of the property. effects. and
franchises Of the Capital Railway Com
pany to the exclusion of the creditors of
the Capital Railway Company, and among
them the compliments, and so that the
Washington Traction and Electric Com
pany and the Capital Railway Company
would be enabled 10 cut out the lien of any
proceedings that might be instituted for
the purpose of realizing upon the COM
plainants' judgments. and while the owner
of the shares of the stock of the Capital
Railway Company, as also Of the bonds
secured by the three deeds of trust insti-
tuted proceedings for the purpose of hav-
ing the equitable interest of the railway
company sold. but that such proceedings
have been abandoned because the object
for which they were begun has been acconi>
plished by a sale under the first deed OF
trust.
1t is then set forth in the complaint
for the purpose of cutting out complain
ants judgments and excluding them from
participating in the proceeds TO be derived
from the sale of the assets OF the Capital
Railway Company. the Washington Trac-
ton and Electric Company. and the Capital
Railway Company. while the owners Of
the bonds which the bill alleges had been
retired and liquidated. directed the trus-
tees under the first deed of trust to adver-
tise and sell the property of the Capital
Railway Company: that the trustees did do
SO and SOLD the property to the defendant,
James B. Lackey. who. the compliments al
lege. is the secretary of the Capital Rail-
way Company and also OF the Washington
Traction and Electric Company. and holds
the property in trust for these corpora
tons. It is also averred that the Wash
ington Traction and Electric Company and
the Capital Railway Company SO rlanipu-
lated the affairs of the latter that the
dynamos and ether appliances used for the
purpose of generating electricity for motor
power. have been permitted to be trans
ferred to the Washington Traction and
Electric Company.
The bill then proceeds to charge tlat
the sale under the deed of trust and the
various transfers OF the assets and eff
fects of the Capital Railway Company
We're for the benefit of the alleged hold
ers OF the bonds secured by the deed of
trust and stockholders in the said rail-
way company, under an arrangement and
for the purpose of purchase by the bond
and stockholders, both. and with an intent
OF thereby excluding from any interest
in the said property the judgments of the
complainants and other creditors, and with
the intent of thereby hindering, delaying,
and defrauding the compliments and other
creditors Of the railway company. 1t is
also charged in the bill that the sale
made of the property of the Capital Rail-
way Company is fraudulent and void and
should be set aside. 1t is also further
alleged that the railway company had no
authority under the law creating it 10
mortgage its franchise and that no title !
TO the franchise passed under the sale |
made under the deed OF trust.
The compliments are represented by |
Messrs Leon Tobriner. Wolf & Rosenberg |
AID Irving Williamson.