Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1918-04-25
TRUST COMPANY
SUIT ON TRIAL
Equity Proceeding to Fore
close Big Mortgage Is Be-
fore Judges Today

The equity suit of the Common
wealth Trust Company against the
Hummelstown Consolidated Water
Company to forclose n $125,oOO first
mortgage bond debt against that
corporation was heard in court to-
day before Judges S. ]. NJ. McCarrell
and Charles V. Henry.
The suit was brought after hold
ers of more than half of the bonds
presented them to the trust COM
pany, as trustee, to bring the suit
In defense it is stated by attorneys
for other bondholders of the com
pany that by an agreement signed by
owners of $4,000 of the $125, 900
issued, they had no right to the action
they had taken as they had con-
sented to accept 4 instead of per
cent. interest for three-year period
in order that state taxes could be
paid.
The action is based on allegations
that the company paid no funds in
to the hands of the trustee to meet
interest payable on bond coupons
due April and October 1, 1915, and
April and October 1, 1916; that state
taxes had not been paid and were in
existence as lien superior to the
mortgage; and that the plant at
Hummelstown was not kept in good
condition, alp in violation of the
mortgage agreement
State Witness OH Stand
An attache of the Auditor Cen
erafs Department gave the total of
unpaid state taxes with interest
charges as $4,S72. When asked TO
give the amount due April 4, 1916,
he estimated it at $4.6774O
w. Grant Rauch, Of the Common
wealth Trust Company, was called to
testlty that coupons for interest
which had been presented to the
bank We're returned marked no
funds provided for payment. w. M.
Ogelsby, vice-president and trust Of
ficer of the bank, testified that before
SUIT was brought $4,000 worth of the
bonds had been presented for col
lection, of which all but $1,000 hal
been marked at the reduced inter-
est rate. Since the suit was brought
he said $24,S00 additional bonds were
presented, all but 5000 at the per
cent. interest rate.
Receiver Testifes
Charles II. Kinter, receiver of the
company, was the last witness called
TO show the condition of the plant
at the time he was appointed re-
SNA'Nh III - Npi IT. ApIO. Ntllle ODJEt-
tions were entered to the admission
of the evidence, the court received
it subject to the EXCEPTIONS of the
defense. Mr.. Kinter said the plant
was in bad condition. one pump out
of service, and told of other de-
fects, including the condition of sand
in the filter beds.
He gave as the income and eXpen-
ditures of the plant for the last three
years the following figures: 1915. in
come, s21,S32: expenses, $19,122:
1916. income, $20,241; expenditures.
S22,31O; 1917, income, $35,201: eX-
penses, $34. When questioned
about the increase in operating ex-
penses last year and whether tho
chemicals used advanced in price
from two to four hundred per cent,
Mr.. Kinter said he estimated the in
crease at 20 per cent. covering la
Dor. materials and chemical prices.
The defense began shortly before
noon, Mr.. Ogelsby being called to the
stand to identify the bonds. In OPEN
ing the defense w. II. .Sponsler, who
with George r. Kelsey, represents
the water company, said agreements
signed by large majority of the
holders of the mortgage bonds, pre-
vented them from directing the trust
company to proceed to have the debt
foreclosed. No decision was given
by the court.