Evening journal. [volume] (Wilmington, Del.) 1888-1932, 1910-09-29
FORECLOSURE In
TROLLEY SUIT
Court Orders Wilmington, New
Castle Electric Railway Sold
to Satisfy BOndhOlderS
CHIEF JUSTICE RULES
ISSUE WAS LAWFUL

! Chief Justice Pennewill in the Court
Of Chancery to-day handed down a de-
cision in the case Of the Real Estate
Trust Company, of Philadelphia. VS..
the Wilmington. New Castle Electric
Railway Company. ct. al. The deci-
sion gives the Trust Company the
right to foreclose on the railway prop
erty and to have it sold. The Real
Estate Trust Company is trustee un-
der the bond issue and acted in the
foreclosure proceedings by request Of
some of the bondholders.
It is believed that when the road is
offered for sale it will be bought by
the Wilmington aud Philadelphia
Traction interests.
The plaintiff was represented by n.
H. Ward and Joseph Def Junkin.
The defendants counsel were T. Bay
ard Heisel, Salisbury, Ponder and
Morris. Robert II. Richards, Benjamin
Nields and William T. Lyman.
History of the Case.
The Wilmington and New Castle
Electric Railway Company. under the
provisions of its charter, issued bonds
to the amount of S150,O00 in order
TO raise money to construct and equip
its railway between Wilmington and
New Castle, to secure the payment Of
which, a mortgage was executed on
August 1, 1896, In favor of the Real
Estate Trust Company of Philadelphia.
BY the terms of the mortgage the
] OIL 70, 9
annually TO the trustee, to be held by
il as a sinking fund for the purpose Of
paying the bonds as they should fall
due, and upon its failure to make such
payments, and the payment Of inter-
est, within sixty days after il should
have been paid at the request OF the
holders of not less than twenty-five
per cent. Of the bonds. after written
notice served on the President, secre-
tary and treasurer of the railway
company at its principle office that
the sinking fund payments, or the in.
terest, then over due must be pai6
, within thirty days after the date o
|, the notice. the trustee in the mort
gage was directed 10 institute prope
proceedings TO enforce the rights o
the holders of The bonds. secured b
the mortgage.
After the execution OF the mort
gage TO the Real Estate Trust Com
pany, of Philadelphia, the Wilmington
and New Castle Electric Railway Com
pany and he New Castle and Della
ware City Railway Company were con
solidated and was afterward known al
: the Wilmington, New Castle anC
Southern Railway Company. On Jun'
I, 1904, tho Wilmington. New Castle
and Southern Railway Company exc
J. cuted mortgage to the Security
Trust and Safe Deposit Company al
e It's line Of railway, running from Edei
3 Park to the town of Delaware City
including all its power houses, roll
n ing stock and other equipment, to Sc
cure a bond issue OF S650,000.
j. The Wilmington, New Castle ailI
e Southern Railway Company failed t
e pay the sinking fund payment due ol
n August 1. 1901, and also failed TO pa
the interest on the bonds due Angus
r l, 1906, to the Real Estate Trust Com
l. pany, of Philadelphia. the Trustee un
o der the mortgage executed by the vii
II mington and New Castle Electric Rail
e way Company. and was unable to NEE
e other obligations. On May %, 1907
70 upon application of the National Ban
q of Wilmington and Brandywine.
NJ creditor former Chancellor Nicholso
appointed receivers for the Whining
II ton New Castle and Southern Rail
way Company.
IS On July ]. 1907. at the request c
the holders of more than twenJy-fy
per cent. of the bonds, the Real les
tate Trust Company, of Philadelphia
acting in the capacity Of trustee unde
- the mortgage of the Wilmington an
Ia New Castle Railway Company, pre-
sented a petition to the ChancellC
praying that il be allowed TO file
D. bill of foreclosure against the Wi
D. mington and New Castle Electric Raj
lt way Company and the Wilmington
I'd New COstle and Southern Railwa
s. Company, upon which a rule was Il
m sued directed to the receivers, requi
lg ing them to show cause why che bi
of foreclosure should not be filed. III
d, on hearing the rule the prayer of II
al petitioner was granted and the bill I
p foreclosure filed
ST Chancellor Curtis was interested Z
n. a solicitor for one of the defendant
r., before his appointment as Chancello
ay and. as a consequence, his disqualii
r., cation TO determine the case was ce
.e, tilted to Chief Justice Pennewill wi
o. accepted jurisdiction over it under u
II, provisions of the Constitution.
rt Foreclosure Opposed.
ID. The foreclosure of the mortgage WI
nd opposed chiefly on two grounds, vi
That proper notice, as required by Il
so terms of the mortgage, was not give
by the trustee to the president, seer
tary and treasurer of the Railwi
Company; and that the bond issue W
void and uncollectible because
Il Clarence Jones, the present holder
- the bonds, was a party to the iss
ance of the bonds. which were alleg
nj. 10 be fraudulent and spurious.
~ Sufficient service of the notice
10 the president and treasurer of Il
M Railway Company was not serious
at Continued on Second Page.)