Democratic Sentinel, Volume 13, Number 31, Rensselaer, Jasper County, 23 August 1889 — SCORED BY GRESHAM. [ARTICLE]

SCORED BY GRESHAM.

HE SETS ASIDE A DECISION OF JUDGE WOODS. Receiver Pierce of the 1., D. & 8. Road Removed —Pertinent Queries —Some Spicy Proceedings in U.S. Court On last Thursday Judge Woods’ of th- United States district court’ appointed a securer for the 1., DAB. railroad. The appointment was made on a romplaint by Benjamin A. Sand=, one of the truss tees of the first mortgage bonds amounting to about $2,000,000. Robert B. F. Pierce, the other trustee, appeared as the defendant and it was petitioned by Sands that Pierce be appointed receive r. The first bill asked that Pierce and Sands both be appointed receivers, but this Judge Woods refused to consent to. So Sands’ name was stricken out and the appointment of Pie: ce was made. The bill also asked for a foreclosure of the mortgage and that the trustees be authorized to sell the road and, after paying the costs of the court, to give the rest over to the bondholders.

Sunday afternoon J udge Gresham came quietly into town and camped at the New Denison house. Monday morning he appeared in the United States court room and the attorne s m the 1., D. & S. case and Receiver R. B. F. fierce appeared also, not looking as well pleased or confident as they might. Judge Gresham sat beside Judge Woods among the audience seats for 15 minutes before climbing into the pulpit: The judges were carrying on a very energetic conversation which Judge Woods did not seem to relish very well.— Gresham did most of the talking, and, judging from his actions, he was not praising Woods’ action in the 1., D. AB. case. Enough was heard to learn that it was the subject of their conversation. Finally they arose and Judge W oods, looking penitent but not pleased, motioned Judge Gresham to the judge’s se p t on the mahogany threne. The great jurist, with his vest unbuttoned so far that tho butt m-holed tab on his shirt stuck out and d splayed his initials worked in red silk on it, stepped on the eminence of justice and sat down. It is customary when the c rcuit judge sits in the district judge’s court, for the latter to occupy a seat beside him and participate in the case. Judge Woods, however, dici not take advantage of this privilege. He sat down outside and continued to look mad. J udge Gresham very coo'lv pushed his fingers through his silvery grey hai’-, tinged with dan er touches, and adjusted his spectacles. Then he looked over at R. B. F Pierce and began asking questions that considerably rattled both Mr. Pie ice and the counsel for the plaintiff. “The fact is,” said Judge Gresham, “this road is insolvent and always has been insolvent It was born insolvent.” Mr. Pierce differed. “The first mortgage amounts to about 82,000,000 does it not?” asked the judge. “Could it be sold for the principal and interest?” Mr. Pierce believed it could, but did not know anybody who was very anxious to buy it. “What is the indebtedness of the road?” asked the judge. “Sixty thousand dollars,” answered Mr. Piei ce. “What is that for?” “Labor and supplies.” “What are the average earnings of the road per month ?” “About $34,000.” “W hat are the operating expens-

‘ About $25,000, exclusive of taxes.” Then the judge inquired about the rolling stock of the road and learned that it was all paid for except $17,000 worth bought on the installment plan from Adams and others. Some other minor matters were inquired into. Ail of this was done with considerable firmness on the part of the judge and nervousness of Mr. Pierce and the several attorneys, both plaintiff and defendant joini g in an endeavor to show that a receiver was necessary. “ w hen was this indebteduess of $60,000 contracted,” asked the judge. They admitted it was all con-> tracted in the past six. men ths.

L.“ The road,” said the judge, “has ■ been making about SIO,OOO per month. What has been done with the money?” Then there was a deep si’ence and then a young man with a bald head who appeared for the plaintiff representing Pratt & Bowers, of New York, tried toexp-ain and so did Mr. Pierce- Their explanations seemed to be what the judge expected. “You have be o n paying it over to the bond holders. One coupon, you say has been paid and part of another. ThD money should have been used to pay the debt contracted for labor and supplies.— You have been paying the bondholders and lettirg the unsecured creditors go.”

Tnen there was more nervousness on the part of the attorneys and some talking which did not waver the judge’s point. Then the able jurist dissected the bill and said he had never seen one like it before, He said he eo Jd not see where there was any controversy in the case, that Mr. Pierce was working in harmony With the plaintiff. The baldheaded young lawyer attempted another explanation at the demand of the court, but the only point of controversy he could point out was that Mr. Pierce believed the trustees could sell the road without a decree of the court and Mr. Sands did not.

The judge said that was merely a difference of opinion as to the mode of proceedure and d*a not figure in the case before the court. He said: “Mr. Pierce has just been put on the other side of the case to give thi? court juiisdiction. These are unusual proceedings for some reason. What is the reason?” Both sides disclaimed any reason. “The purpose,” said the judge, “is to get out of paying this indebtedness for labor and supplies.’ g They said it was not. ‘What is to become ot this indebtedness?” asked the court. “I suppose it will have to be paid,” answered Pierce. “But how?” inquired the court. It was not stated how, but Mr. ■ ierce said the bondholders did not object to its being ; aid. “Then they ought to come here and ha. d it over,” said the court. “I can see no reason fora receiver here. There is no reason for appointing a receiver when the road is paying operating jexpenses unless some one’s interests are to be preserved. A bondhclder does not need his interests protected. This court will never appoint a receive? unbss there is good reasons ffor it.” Turning on Mr. Pierce, he said: “You are not a fit man to be made receiver of this road. You have been paying these bondholders in preference to unsecured creditors.” In the bill was a clause to the effect that these creditors might interfere with the operating of the road by the trustees. The judge sa’d all they cot Id do was to coerce the payment of their claims. The judge then formally set the appointment of R. B. F. Pierce, as receiver, aside. This does not affect the bill to foreclose. During the trial the question of jurisdiction of Judge Woods came up but it was not settled. Judge Gresham evidently believed Judge Woods had no jurisdiction, but he said it was not his intention th n to hold so.—lndianapolis Sun. Judge Gresham’s friends point to this action as evidence of his great ability and unswerving integrity, while Woods’ friends insist that it is evidence only of conceit impelled by uncoilable spite. Woods has few friends to sympathise with him, however. His course in the election trials didn t secure him the confidence of the people to any great extent ■■ Bargains:—ln order to make room for a larger stock of good s, J. E. Spitler, at the postuflice, will close out his stock of stationery, books, etc. at a bargain.