New-York tribune., 1868-02-17
RAILROAD AFFAIRS IN THE WEST.

On Friday, in the United States Supreme
Court the OF f. p James against the La Crosse Rail
road Company, Milwaukee and Minnesota Railroad Com
pany. and Seah Chamberlain was heard The following
Is the case put forward by tho plaintiffs In June 1885,
the La Crosse Railroad Company was greatly embar-
rassed and large debt for rolngstOck &c, had aecu
nulated which remained unsecured. The amount owing,
including the mortgage debt &c, was slOOOOO00 The
road was In the hands Of Selah Chamberlain under the
mortgage held by him to secure the amount dns. On
lit June 1885, directors authorized the issne Of bonds
To the amount S2OOOOOO secured by mortgage on the
entire road, with per cent interest," payable annually
At pretended meeting OF hve OF the directors on the
18th OF June this authority was amended 10 as to make
the first interest payable on July 1850 on the 2lst OF
Tune the mortgage executed by the officers OF the
Company Barnes the 100000 of bonds were executed
and ON The nth OF August 1885, the President and Secre
tary executed supplementary 70 secu,o .en M
This mortgage executed in fraud OF the creditors ana
secure any money owing by the Company but TO bfing
about speedy sale OF the road TO defaud the creditors
and M anu and :" tSer pnd The changing of
the OF the interest from July 70 January
OF their % design, and this was also their giving
authority w. A. Guest, A. f. Guinnson, and A. Nixon
Committee aferward Chamberlain 100000 for the
payment OF t20O00 and divided the bonds among them
selves and friends and secured unnecessary Sums by
pledging them at cents the dollar The directors
provision for the interest and Barnes on the LIST
February, 1889, commenced procedure by advertise,
men On 2lst Of May he pretended to sell the mortgaged
property 70 himself as trustee Tor the oondhSlderS ths
$4,000, payable In the bonds, ana Immediately after
the the bOndhodersand Barnes organized the Minnie
Neither the bonds or stocks OF the pretended Minnesota
Company had any market value, never quoted
at any stock board aud the only sales transfers made
have been private transactions, and between parties fully
notified Of the character OF the stock and bonds Barnes
was cogZant OF the character Of the bonds the road
the value of the bonds with interest and cost
In pursuance OF the scheme, TO prevent redemption
either by the stockholders creditors AT the time OF
the SALE large part OF the bonds were Of but
were reckoned payment Of the pretended bid The road
Ia In the hands Of Receiver. and the company has
ceased exist active corporation and the road has
never been In the hands OF the Minnesota Company.
Therefore they pray that the property OF the La Crosse
and Milwaukee Railroad Company, In the possession
subject to the prior dividend that the Barnes
mortgage may be deeTeed 20 be fraudulent and void and
the Minnesota Company take nothing by the sale,
and be enOned from setting up any right under SAID rule
The denies all these allegations The decree below
against the eompainants and they appeal,
submitting that the disposition OF the bonds under this
mortgage gross fraud the refore the bonds and the
mortgages shoud be set aside and .canoelod. The Min
DeaOa Company that tho cOmplainants have wholly
failed 10 make out In OF this magnitude
road OF which must, after 30 many years nave
elapeed snce original formation be held by innocent
parties this should proceed with great caution 10
aside such corporation Nothing less than the most
conclusive evidence would justify such exercise Of the
power OF this Court The evidence In this entirely
planants The evidence 10 prove fraud giving the great
est force IT, only proves that certain OF the directors OF
the La Crosse and Milwaukee Railroad Company malad
minstered the assets OF tho Company The evidence In
regard TO the Barnes mortgage bonds, deposited as col
lateral security with Chamberlain and other creditors Of
the Company prove this and II this were suit
20 render such directors liable TO the stockholders
for violation OF their trust IL might be very
ocac0us but evidence 10 authorize the dissolution Of
the company. 1t has but little force The complainants