The Montgomery advertiser., 1902-06-29
CITY OF TROY LOSES
JUDGE JONES ovERRULEs THE
 WATER WORKS DEMURRER.
Town Maintained That Certain Parts of Water System Were Not Sub ject to Mortgage Secur-
 ing Bonds.

Judge Thomas G. Jones of the United ! States District Court yesterday over ruled the demurrers filed by the Board oi Mayor and Aldermen of Troy in the Diii for, foreclosure of mortgage on the wa terworks of that city filed by the United States Guarantee Trust Company of New York City.
 A motion for the appointment of re- cciver for the waterworks property was immediately filed by the trust cpmpany, and by consent of counsel, John A. hirk- patrick of Montgomery was appointed referee, to ascertain what will be fair sum for the city of Troy to pay for wa ter, pending a final decree by the court.
 The demurrers to the bill were filed Fri day by lawyers representing the city or Troy, and were argued at length. These demurrers were overruled yesterday by Judge Jones in an oral opinion.
 Jt dge Jones held first that the Legisla- ture had the right to authorize muni- cipal corporation to mortgage ordinary ccIpora te pro3erty if 1t chose to do so second. that the title of the act Is suffl- ciently comprehensive to authorize the fn- clusion in the body of the act provision for the mortsaging of the property which was to be purchased by the sale of the boEds for waterworks, and. third, that or ,ne face of the pill 1t did not appear  ton, located some three miles south of Troy was q separate and independent system of waterworks when connected with tfe original pumping station fn Troy. | used to supply water there, and that when built it was covered by the provisions of the mortgage which spoke of all property connected with the system of waterworks or used in 'the construction, maintenance or operation thereof and if theer were C.. III -g- they must be set up by an answer The defendant, the Board of Mayor and Aldermen of Troy, was given thirty days within which to make an answer.
 Immediately upon this oral opinion by Judge Jones. a motion for the appoint ment of a receiver for the property was heard.
 AS the lessee of the waterworBs, who is shown by the bill to be in possession of the property, was not made a party to the suit, or given notice of the applica- tion for a receiver, 1t was ordered by Judge Jones that he be served with mo- tice. and given leave to show, if he can claim under the title superior to the mortgagee.
 The court further held that as the city of Troy was in default and the mortgaged premises were not sufficient to pay the debt which is in arrears and had no prop erty which could be reached bY eXecu- tion, that it would, later on. if necessary, appoint receiver to intercept the rents incomes and profits, but further hearing of the motion was postponed.
 A reference was ordered by the court to ascertain what would be fair sum for the city of Troy to pay for water fur nished it, and if the city would agree to pay that sum, and pay over the net pro- ceeds from private consumers, the court will allow the city to remain in possess sion until the final decree. John A Kirk patrick was named as referee
 This order was made by Judge Jones to save burdening the property with the costs of a receiver, and the suggestion was acquiesced in by counsel on both sides.
 It Is possible an agreement will be reached whereby a receiver will not be appointed for the property pending a final decree after the case Is heard on its mer- it's.
 The United States Guarantee Trust Company of New York holds S5OOOO of Troy city bonds. issued under an act of the Legislature for the construction Of a waterworks plant. The city has default ed upon the bonds and the trust company is seeking to foreclose a mortgage secur- ing the bonds.