The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-10-29
FROM MORTGAGE DEBT
Claimed That tho Officers of New Com.
pany Are Holding Part Of the
First Bond Money.
ENJOINED FROM SELLING MORE BONDS
Order Granted by Judge PurneI Yesterday.
Claimed That the $780, Bones Are
Being Sold at Sacrifice. Mortg-
age not Being Met.

Judge Purnell yesterday granted
temporary injunction, restraining the
newly organized Chatham Coal and Iron
Company, of Cumnock, from selling or
hpothecating any of it's recently author
lied bonds and stocks or disposing Of
any funds on hand.
The injunction was issued at the in
stance Of H. M. Hayes and w. P. Hens
zey, of Pennsylvania, who recently con-
veyed the Cumnock mines by deed to
the rev company
The sensational charge is made in the
complaint supporting the application
for injunction that the officers of the
Chatham Coal and Iron Company are
diverting to other purposes the proceeds
from the sale of bonds, which by agree
ment should go to the compliments to
secure the liquidation.
The injunction is returnable for hear
ing in this city November 9th before
Judge Purnell. Mr.. S. A. Henszey who
represents the complainants, was here
yesterday. His attorney is Mr.. James
H. Pou.
The complaint sets forth that the
Cumnock property was mortgaged for
$4,000 prior to the sale in August Ac-
cording to the complaint the agreement
was that the new company was to issue
100000 in bonds with which to redeem
this mortgage and the balance was to be
used in operating the mines for the past
two years. Then there was to be $780,
600 of preferred stock, which was to be
turned over to the complainants and
100000 in common stock, which it is
claimed was to be divided between the
complainants and the new purchasers.
Now the compliments allege that they
have issued the deed for the property
and that the officers of the new company
have sold part of the bonds and instead
of paying off the original mortgage are
using proceeds for other purposes.
The complaint alleges specifically that
the officers of the Chatham Coal and
Iron Company have sold $4,000 of the
first mortgage bonds and have realized
therefrom the net sum of $12,750; that
of this sum $3.50 has been paid to the
Union Trust Company, the proportion
ate part of the original loan made by
the trust company and has paid S4,-
1888 Indebtedness of the Cumnock
mines, leaving in the hands of the COM
pany $4,06607, which according to the
terms of agreement should be paid to
the compliments. The complainants
believe and charge that the said COM
pany is using this sum of money in it's
hands for its own purpose thereby de-
stroying the security of complainants
pro tanto
The complainants allege that the Chat
ham Coal and Iron Company has con-
tracted to sell an additional $4,000 Of
the first mortgage bonds and has given
options upon the remaining $50, 900 there
Of at Is per cent less than par and that
they threaten to continue to use large
portion of the proceeds of said bonds for
its own purpose instead of paying the
same to the complainant, w. p. Hens
zey, in accordance with the terms of
agreement made with him.
The restraining order issued by Judge
Purnell yesterday orders the defendant,
show cause at Raleigh, November 9th,
1901, why the relief asked for by the
complainants should not be granted
The compliments having executed
$500 bond, which is accepted by the
Wi =, eii0 Slidludlli Wal duu IIOH SOHl-
pany its officers, directors, agents, at
torneys and all persons claiming to act
under it's direction or control, are en-
Joined and restrained from the expen-
dlture OF any sum or sums of money
now In Its or their hands, or which may
hereafter come into it's or their hands
by reason of the sale, negotiation or
hypothecation of any of the first mort
gage six per cent gold bonds or of the, |
general five per cent gold mortgage
bonds of the Chatham Coal and Iron
Company.
The company is also enjoined from
selling, negotiating and hypothecatine,
any of the above described bonds and of |
issuing any part of the preferred stock |
of the said corporation or any part of
the common stock authorized at the
stockholders meeting, held October
18th, 1901, unless the same be issued to
the complainant, James H. M. Hayes
The Chatham Coal and Iron COMPANY
is not restrained from selling the output
of the mines and using the proceeds
thereof solely for the operation and
maintenance thereof.
The Cumnock mines have recently
been opened up by the new manage
ment on very extensive scale. Mod
ern coal mining machinery has been in
stalled and a large force of men is at
work. Mr.. II. H. Myers, the president,
directs the work at Cumnock