Evening star., 1901-10-11
RECEIVER APPOIN TED
Allan L. McDermott in Charge Of
City and Suburban Road.
AMOUNT OF BOND PLACED At $780,
Appeal for Delay in Behalf Of
Minority Stockholders.
SUIT BY JUDGMENT CREDITo

Allen L. McDermott was today appointed
receiver for the City and Suburban Railway
Company oy Justice Bradley, sitting In
Equity Court No. 2. The amount of Mr.
McDermott's bond was fixed at 500, 1000.
This action was the result of suit brought
last week by the United States Mortgage
and Trust Company, the United States
Electric Lighting Company, the Columbia
Railway Company and the Anacostia and
Potomac River Railway Company, judg-
ment creditors of the road. An order is
sued at the time of the filing Of the suit
was made returnabIe today when the de-
fendant company was instructed to show
cause why receiver should not be ap-
pointed.
The company was represented in court
this morning by Attorney J. J. Darlington,
but no opposition was made by him to the
appointment of receiver. Objection was
made, however, by Attorneys Hamilton and
TObriner as the representatives of the
minority stockholders of the road, and in
their argument for delay until next week,
together with the answer by Attorney Nc
Kenney and remarks by Justice Bradley,
the purposes of the various interests in
connection with the company were some
what elaborated
AS soon as the matter came up Attorney
Hamilton addressed the court. He said he
represented the interests Of the minority
stockholders Of the company and desired
that the matter go over until next week.
He explained that the minority stockhold-
ers had filed bill against the company In
September. in which, among other things,
they had asked for the appointment Of a
receiver and that as yet no answer had
been made by the company in that case.
He noted the fact that while the present
suit was for the same purpose 1t was
mr. ych hyy i,f1 II
until Tuesday to consider the best inter-
ests of the minority people in the matter.
Express Opposition.
Mr.. McKenney opposed this request He
urged that as the present suit was brought
by judgment creditors, and that nearly
quarter of a million dollars was involved,
there was no occasion for delay. He fur
ther stated that the bill of complaint filed
by the minority interests set up no other
contentious than that the defendant COM
pany was insolvent and that its receipts
were insufficient to meet it's operating eX
penses and pay interest on its bonded debt.
1t prayed for the appointment of a receiver
he said, who should take hold Of the road
and operate 1t with a view to giving full
value to the minority interests and correct
certain abuses, among which was the free
transfer system.
The bill of the minority and Of his clients,
he said, were almost identical, and yet OBJ
pointed. Mr.. McKenney held that there
was value in the stock Of a company
until its judgment creditors were satisfied.
Mr.. Tobriner suggested to the court that
it did not need a microscope to see that
there was a fight on between the minority
and majority stockholders. He said that
three of the companies which had obtain
ed judgment by default against the City
under the same management as is that
road. He said collusion was apparent in
the present demand for a receiver. The
road was a part Of the system of the
Washington Traction and Electric Com
pany, of which the United States Electric
Lighting Company, the Columbia Railway
Company and the Anacostia and Potomac
River Railway Company were part.
Mr.. Mckenney replied by saying that If
there was apparent any collusion on the
part of the three companies mentioned the
argument was nullified by the application
of the other one of the four creditors, the
United States Mortgage and Trust Com
pany. This company. he said, had judg-
ment for over half Of the whole amount
due. This represented actual money paid
to the defendant company on its promis-
sorry notes. Mr.. McKenney declared that
it was just as much the desire Of the pres
ent management of the road to get away
from the free transfer system as it Is of
the minority stockholders, but 1t seemed
that this could not be done under the law.
This matter could be brought into court
and tested, he declared, when the road is
in the hands of a receiver. 1t had been de-
cided he stated further, that this had been
decided on as the best way to reach that
question.
Court Sees No Reason for Delay.
Justice Bradley here stated that he saw
no reason why he should delay action on
the application of parties who had no in
terest whatever In the pending cause.
Il cannot see how the interest of the mi
nority stock holders would be affected in
any way" he continued, "or at least not
until some action is taken by the receiver
when opportunity to he heard would be
given to every one. think the court ought
to act by appointing a receiver
Mr.. McDermott was Immediately named
by Mr.. McKenney as the choice Of his cli-
ents for the receivership, and Mr.. Darling
ton said there was no objection to his Sc
lection upon the part Of the company. He
stated farther that since Mr.. McDermott
had been president of the road its earning
capacity had increased. In 1895, he said,
the percentage Of earnings to cost was 74S
per cent. In 1900 it was 7S per cent and
for the last eight months, during which
time Mr.. McDermott had been its presi-
dent, the earnings had increased to IS per
cent Of the operating expenses.
The court then announced the appoint-
ment Of Mr.. McDermott and fixed his bond
at 100000.