Daily press. [volume] (Newport News, Va.) 1896-current, 1908-12-29
JUDGE DENIES MOTiOS FOR
SALE OF HOTEL PROPERTY
Important Decision Rendered by Nor.
folk Jurist Bearing Upon Me-
chanics Liens Subject.

Hanckp, has denied the motion Tor
a sale of the l.yrnhayen hotel prop
erty. CRANKY and Freemason streets,
under the mechanics liens subject TO
the first mortgage bond issue OF
sIOO. 900. as was desired by the sac.
Or0 second mortgage bondhOlders.
The court held that the property
should be sold free of all liens when
put up for sale under the suit for
enforcement of the mechanics, liens.
which in figures amount 10 some
thing over $4,000.
The. second mortgage bondholder5
and others desiring sale subject 70
the first mortgage. so as to afold
the trouble of refnancing the prop
eriy then asked the court TO per
mi, tbs n to pay into court sufficient
cash to iquidate all liens and costs
of the lien suit, thus subrogatinS
themselves to the right Of all lien
holders. with request to court that
the sale be made for them under the
first mort gage.
eondhoIders' Objection.
Counsel for the first mortgage
tondholders objected to this. 1t was
held by them that the money to liqul-
date all liens could be paid into court
for distribution ly the court. bat that
after doing this these who paid the
money in could not come and ask for
a sale as lien holders when this mat
ter was settled BY a payment into
court of cash and distribution OF
said the sale would be to pay back
those who had put up the cash to
liquidate the liens
Judge Hanckel sai@ no would hear
argument on the question of the
rights of subrOgation under such cir
cumstances as were presented The
case was then adjourned until Mon
day afternoon. Jan. 4.
II developed that a clause In the
original first mortgage postpones the
payment of $500 annual rent to the
Union Square Corporation, vendor OF
the property upon which the Lynn
haven hotel stands, until the end OF
the first mortgage eight years hence.
This came about by the insertion OF
a provision in the first mortgage
deed that the rent would be post
poned until after the mortgage had
been satisfied unless the Lynnhaven
hotel was completed by certain
date in the spring Of 1907
No Rental Received.
1t was not completed by this date
and the owners Of the land. though
they thought they were fully protect
ed for an annual rental Of $500,
have received no rent at all up to
this time and can receive none until
the first mortgage is satisfied in nat
ural course of events or until the
property is sold free OF liens and the
first mortgage thus wiped out before
the time of its ordinary expiration.
Counsel for the first mortgage
bondholders asked if the property
would not now bring $4,000. how
could it eight years hence bring
enough to pay the first mortgage of
100000 held ty them and the post
poned rent of $4,000 which mist
come first?''
Case Of importance.
Counsel for the first mortgage
bondholders l:ought out the fact thai
they were claiming default in cove
nants by the mortgager and had ask
ed the trustee for sale OF the prop
erty directly under the first mort
gage. Int pending action under the
suit for sale to enforce mechanics
liens nothing had been done.
The case seems to be one Of the
most important chancery actions that
has arisen in the court of law and
chancery in some time.
William II. White. president of the
Richmond. Fredericksburg and PotO-
mac railroad. holds $7O.O60 in the
first mortgage bonds of the Lynn
haven and is also largely interested
In the Union Square Corporation as
-oolor IS tho gopS upop rhicb tho