New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1908-09-09
JACKSON LOSES AGAIN
DAYS. THROWS OUT SUIT.
Nerc York City Railscay Evidence
Weak, Justice Rules.

Railing TO find in the evidence proof that the
,-our York City Railway Company had been in
continuous state Of insolvency for the year
nrecediug September 90. 1907, Justice Davis
yesterday dismissed the petition of Attorney
General jackson TO have the company dissolved
10 SIS franchises annulled The receivers, who
.-e sppointed on that date by Justice Seabury
., the motion OF the Attorney General-J.
,,oronden Dougherty. Paul Fuller and Melvin G..
p.rnser-and whose appointment Mr. Jackson
ought TO have confirmed. were discharged by
Justice Davis
..o code of Civil Procedure. which permits the
.-,,cins Of a suit to dissolve corporation ere
..od bv the state and to forfeit its corporate
-,.,+s privileges and franchises. where the cor
-a-o.iog has remained insolvent for at least
- year. or where it has neglected or refused
- ., least one year to pay and discharge its
-,.e. or other evidences of debt
;, h-;npine the suit Attorney General Jackson
..,e,ded that though the New York City Rail
~ company did not confess its insolvency
,-+u ,he receivers were appointed by the Fed
=, court on September "a last, this condition
.o,,ld not have arisen during the year preoed-
=, NV. must have existed early as June 80
a0s He further asserted that the report of
80 date by the company to the State Board
a ps;lv-av Commissioners showed that 1t was
sanc;allv unable TO meet its Obligations ana
.h.t ,ts liabilities exceeded its assets
T,,s,ioa Davis after pointing out that it rests
the Attorney General TO prove the continu-
s,ate of insolvency for the year preceding
e.r.sr,ber "A. 1907. rules against the Attorney
General on practically every one of the aTgu-
- brought forward by him to prove the
co1pany's insolvency
i,s+anc. as TO the criticism of the sub
-,.,on Of the Metropolitan Securities Com
-, n the New York City Railway Company
- &c an asset of S6.319.oo0 in the report, as
.i,s. q liability OF S7.533.500. Justice Davis
holds that the contractual obligation OF the
.oc,-ities company to purchase debenture notes
o..be face value of S3915,0oo at 40 is not prop
,,. On asset Moreover. as these notes were
ever issued and as the remainder of the asset
i,.,, consisted Of capital stock, which is not
liability Justice Davis rules that the entire item
- 523 200 be stricken from the liability side
81 the report The amount of S2.534,6o2 70,
,,,ic, the company reported was due from COM
r,anies in the system, Justice Davis says was
rrone-lv estimated as asset, consisting, as it
did. Of valid debts 1t had a substantial value,
he saws hut on the evidence il would be i'm
,,.c+icable 10 say what the exact value was.
Down 10 a time shortly before the appoint
mont Of the receivers in the United States
c-cpi, Court" SAYS Justice Davis. the evil
dence discloses no default Of the defendant in
meeting its current obligations. On the con-
trary the rentals payable under the lease, the
interest upon the funded debt Of the Metropoli-
tan system bills incurred in connection with the
operation Of the system. bills for construction.
salaries and payrolls, were all paid promptly
during this period. Upon all the evidence
think the defendant is entitled to judgment, dis
missing the complaint with costs and vacating
the order appointing receivers
Attorney General Jackson was plainly disap-
pointed last night the news that his applica-
tion had been defeated, but did not care to COM
Inent on Justice Davis's opinion until he had an
opportunity to 90 over ii carefully