The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-12-02

say that the issuing OF such stock Is unauthorized
soSS be SO II ta
charge OF the property. But the Erie Railway Com
pany, OF all the corporations OF the State has no
fixed capital The original corporation was the Erie
Railroad Company, chartered In 1885; then 1t had
fixed capital but It met with reverses and went into
without capital, and was formed simply OF the rep
RESERVATIONS OF value OF outstanding obligations OF
law authorized the issue OF new stock to replace the
Old stock and to meet all the obligations OF the
pany TO an indefinite amount
Judge NelSOn-Where Is that l0wf
Mr.. Fied-Your Honor Will find 1t set forth In the
papers.
wholly idle and meaningless II construed In any
other way than as we cOnsrue It. The directors, he
commended. from the PROVISIONS OF the act had the
pose, he argued, the Erie Company had capital OF
twenty millions, and they had already issued 70 the
OF dollars to be raised the directors have right to
receive stock for his i've millions from any persons
lions they give the right to the whole earth to pur-
chase that stock. He commended, therefore, that
power was given 10 the directors OF the company by
the Twenty eighth section TO issue stock In excess
OF the stock already provided for whenever the ext
gencies arise demanding IT, by the issuance
was otherwise-that their construction OF the
law was erroneous, and that an application for
the appointment OF receiver was right-the char
acter OF those who make the application becomes
most material to inquire into. Counsel then went
into the history Of the application for a receiver IN
part OF Drew and others who had entered into q
combination to speculate with the stock OF the CON-
pany by means OF a process OF the State Court;
Who are the parties applying hereS Belmont and
Lucke who are charged In one OF the affidayits with
having made bargain with Work, Schel and
terests. But Belmont is merely a tool on the
side play that Is going on-,a mere instrn-
s stool, that stands behind the scenes
Schell and ork, therefore, were the original con-
spirators In tnat grant fraud begun last spring and
an attempt which Drew himself now admits was an
attempt on the part OF Schel and Work to amass
colossal fortunes by moves the stock board which
movements were TO be effected by injunctions and
processes in the courts as they might get them from
one side or the other
Counsel then gave history OF the several suits In
the Erie lgatlon nom the first commenced on the
10th February, 1865, to the present case.
Counsel proceeded to give a review or the last
litigation against the Erie Railway Company carried
by Schell, who had previously ne said, as member
OF the State Senate, got the statute repealed winch
which that suit settled was as corrupt and
nagItous as had ever been entered into First Mir.
Cornelius Vanderbilt had secured himself from loss
the 1--we millions OF stock which he held at 20. He Mr..
Field had the original checks to Vanderbilt for
sp ae Then there was i've millions more Of
the stock OF the Erie Railway taken for the Boston.
Hartford and Erie Railway Company. And last
there was $42s,O0O OF the property OF the
Erie stockholders paid over to Schell and his
counsel. He would not insult the intelligence Of the
Court by dwelling on the inlamy Of the whole trans
action. That litigation exactly the litiga-
ton as was now before the Court. 1t was the same
controversy ~ every respect inc same men who
were then bought OIL were now striving bv the
same means to obtain the same ends. It was
the fight Of the c0rm0rants over the carcass.
There not, he c0nended, on the face OF the COM
plant particle OF reason for the appointment OF
any receiver whatever. This was the case simply OF
creditor seeking to nave receiver appointed Tor
might recover. There could not be receiver except
for the specific fund on which the complaint had
lien. There was no such fund here. What need was
there for the appointment OF receiver IL was said
on the other side that the company had acceded to
it. The company had done no such thing. 1t had
simply waived objection to the service of the papers
1t did not thereby waive any Of Its rights. The
pany now commended that the order for the receiver
ship should never have been given and thatt should
not stand one hour longer. The bill was good one
for the purpose OF decision whether the stock on
which the suit was brought was legal stock spuri-
ousstock. The company acceded to 1t to that extent
II Mr.. Belmont came into the suit he must come in
on the allegations In Wnelpley's bill, and those ale
cations were that every dollar received from the sale
OF the convertible bonds was properly and faithfully
used In the repair completion and operation Of the
hind that There coufs not be two compainants in
the same suit, each making opposite and contradic
tory allegations. The court could not touch dollar
OF the money proceeding from the sale OF convertible
bonds without interfering with the law OF the state
OF New York OF last session authorizing the issue OF
such bonds for the completion and operation Of the
road There also authority in the statute Of1s47
for railroad corporations 10 increase their capital
sixty miles OF the Erie Railroad had only single
track. and the money received from the OF con-
III not for him to say what disposition had been
made OF II. Without the expenditure OF several mil
not he oeraed e ana II u The Conrt were now 20 :, nace
the road in the hands OF Mr.. Davies receiver it
would be tantamount to declaration that that great
company should cease to exist As to Mr.. Belmonts
being admitted as a party plaintiff he could not
come IN without GUSHING the jurisdiction OF the
Court, and as to his being admitted party defendant
he could not do that without requiring the plaintiff
IN alter his bill II Mr.. Belmont came on who
was TO control the suits Was he to be allowed 10
A cO-pla VA y
20 makeY In conclusion Mr.. Field said his clients,
the Erie Railroad Company, were very anxious to
legality or illegality OF Its acts. 10 that decision
they would respectfully bow.
EXPLANATION BY MR. STOUGHToS.
Mr.. Stoughton made some additional remarks In
explanation Of which he understood to have
said as to MT Henry T. Dawes having received
S25,ooO out OF the special tund OF s25 Oeo He under
stood that whatever received by Mr.. Davies had
been received from his client as compensation before
the settlement.
AFFIDAVIT OF MR.. HENRY t. DAVIES.
In this connection the following affidavit OF Mr..
Davies was read and fled
Henry E. Davies 81 said city, being duly swarn ssyaTsa.
Ii Ss ~ s e SS % se K.
understood oq behalf OF said firm and Messs Steward and
service. herein was paid By aid Srm Of John scodsSod
& IN aeser n1y ans
perscns dr, corporation whstevcr
seheli s,d controversy, with
advised with by him IN relation therefor and this deponent
Bootgood Co the 18th day Of March fast past and that
within three days thereafter he received fee from
said r and that since that payment he has not received
from person whatever sum of money whatever
towards the payment or for
services of this deponent In said action.
That the payments OF ~25 and x4e $50 made by the de-
PENDANT In July last, mentioned in the adavs read
this motion herein the Sth of November last
wholly unknown 10 th deponent and thai he
heard such until he heard said AdAvits rad in
this and iuher this deponent saith
HENRY r. DAVIES
Sworn and subscribed to this 1st day OF December 1879
kFSSErE G. WHITE, United States Commissioner
ARGUMENT OF Mr.. o'CoSoR.
Mr.. Charles 0Conor closed the argument on be-
half Of Mr.. Belmont. lie handed TO the Court
summary Of the points for which he commended.
Ills duty, he said. was 10 bring down the question
~ be passed upon to compass no larger than the
real questions OF law and fact required. He would
enicayor 10 systematize the thing for the under
standing ~ the Court. In the month OF February,
1865 certain directors of the Erie Railway Company
had caused to be issued sl0,0000oo of convertible
bonds That issue had been characterized by
circumstances Of yery great atrociy. The
The cOmpany ai very low rate. giving