The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-12-02
THE ERIE WAR.
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THE G0ULD-DAVIES CONTROVERSY
Close Of Argument in the United States
Circuit Court.
State of Affairs at the Compa.
ny's Office.
UNITED STATES CIRCUIT COURT.
Tho Gould-Davies COntrOversy-Closeo or the
Argument of Counsel-DecisiOn Deferred.
Before Judge Nelson.

Tho Gould-Davies COntroversy-Cl0se OF the
Argument of Counsel-Dcci.ion Deferred.
Before Judge Nelson.
Henry d. Whelplev rs. The Erie Rdit.ray Con,pa-
nv.-The argument on the motion TO set aside the
order made by Judge Blatchford last week appoint
ing Jay Gould receiver over the eight millions pro-
ceeds unauthorized stock said to be issued by the
directors OF the Erie Railway Company was resumed
yesterday morning. The counsel appearing in support
OF the motion were Messrs. Charles OConor, Edwards
Pierrepont, Henry Z. Davies. d. b. Eaton, Noah
Davis and G. A. Rapallo, while the opposite side OF
the question was represented By Messrs L. w.
Stoughton, d. d. Field, John X. Porter, Clarence A
Seward ana A. X. yanderpoel
The court was unusually crowded on account both
OF the great interest that has been excited by the dis
cussion Of the great Erie question IN the United
States Circuit Court presided over by the venerable
Chief Justice of the Circuit aud from the sensational
reports of the movements OF some of the more prom
nent actors in the operations that have eliminated
one OF the most varied in its relations and most
complicated and irrepressible tigatons that ever
engaged the attention OF the courts OF this State 1t
might also have been supposed that some reference
woud have been made to the report OF the alleged
fight of OF the principal litigants In the sew.
eral Suits and that this would bring forth develop
ments OF facts known only to the lawyers in the
IL any present with this expectation they
were doomed to disappointment, for no alusion
whatever was made to the parties or the act re-
Judge Nelson took his seat ON the bench few
minutes past eleven, when the argument OF counsel
IN support Of the motion was ordered to be resumed
MIR. Noah Davis was proceeding to address the
Court, when
ANOTHER AsrIRANr FOR THE TROUBLES OF LITIGA-
TION
Mr.. Thomas M. Whelan, made application on the
part OF Horace S. Taylor, stockbroker, asking
be permitted to come in as party to the Whepey
Judge Nelson directed the counsel presenting it to
read the application and Motion This having been
Mr. Field inquired what the motion wass
Mr.. Wnelan replied that 1t was merely an order TO
show cause
Mr. Field asked whether the order did not also pro-
pose to suspend all further proceedings
Judge Nelson, having looked over the papers, said
that ne did not see any bill or petition in form setting
out the facts.
Mr.. Whelan-The petitioner sets out merely that he
Is a stockbroker.
Judge Nelson-wel, is that enoughs
MIR. Whelan-And that he holds some or the stock
mentioned in the complaint
Judge Neson-He must set out what it is and how
much. He must give us some facts. He must be
specific ms If you were fling bill. That, perhaps
will give you all the information you want
ARGUMENT OF MIR, NOAH DAVIS.
Mr.. Noah Davis opened the argument behalf OF
the receiver Mr.. Henry E. Davies. The case, he
said, had taken an extraordinary course If Mr.
holder and asking to intervene in the suit there
would seem TO be no question but that the applica
ton should be granted without argument. Al the
or aflldayits, therefore, touching variety OF
other questions seemed to be entirely out OF place.
Those adavlts very clearly established where
party standing in the position of receiver might
very well come IN and clam that he. being entirely
impartial in the matter should he recognized and
ter OF the receverships If there was an al
tempt to assail the character OF MIR.
nayles, the receiver, he submitted that
that was hardly an open question the
aaidavits referring to Mr.. Davies did not raise
that point. but simply questioned whether there
any necessity at all Tor the appointment Of
ceivcr. The State court had passed upon the ques-
ton and held that state Of facts did exist calling
for the appointment OF receiver There was no bet
ter settled rule OF law than that court with
rent jurisdiction would not re view the decision and
determination Of the other court. lie would assume,
therefore, thar the Court would regard the appoint
ment as having been made by the state court on
good and sufficient grounds and would refuse 10 re-
view that action. Receiver Davies had never been
connected with those transactions IN such a way
TO make him ineligible for the position. He had APP
pcared as counsel Tor Mr.. Boodgood IN former
action against the Erie Railway Company, but
that instead Of being reason against his
II proved INN TO he a suitable person for the nvesti
pgton of the matters OF the company as not being
likely to be In COLLISION with II. There was nothing
In the circumstances which affected the propret5 OF
the appointment OF Mr.. III. u. Davies. The Court,
ia selecting him, had been guided by the highest
public consideration II was not till the argument
Of Monday that the slightest objection had been
made to him. Counsel on the other hand could not
urge that this was not proper case FOR the appoint
mcnt of All the facts alleged IN the bill
OF complaint stood limited by counsel ana counsel
were estOppcd from denying that those facts were
true and from DENYING that either the present re-
ceyer MR. Daviesl should be continued or another
receiver appointed lie argued thai Mr.. jay Gould
not III ana proper person 10
hold the office OF receiver. and that Mr..
Henry y. Davies, The receiver appointed
by the state court, was the Ut and proper person.
Counsel proceeded 10 review the history OF the
cent litigation and Of the circumstances leading to
the appointment OF the rival receivers. Receiver
Davies claimed that he was entitled AS receiver To all
the property OF the company rs wei that men,
toned IN the order appointing him a. that named I'm
Che order appointing NIT jaw Gould He stood before
the court holding the legal title to the property of
every KIND OF the company. lie, therefore, came
INTO court FOR the purpose OF showing that the re-
ceiyer appointed by this court Mr. JAY Could should
DC removed. That appointment was coiusive. The
very order appointing HIM carried on It's face iis
condemnation Of the objects anu purposes for
which 1t was sought. Mr. Receiver Davies holding
The general title OF all the property had very clearly
the control OF It, including that entrusted TO the
ownership OF Mr.. Jay Gould. The total amount Of
interest claimed TO be held by Mr.. Belmont was
70 give Mr. Receiver Could control or fsOD0,00o.
II Mr. Davies were substituted for Mr.. Gould, by
order OF this court, ~ q matter OF course he would
have control OF that eight millions "a VI all the other
property OF the company. The object OF this bill
was to protect the interests OF holds OF shares OF
stock. iradulent IN fact but for which the company
was responsible. These stockholders could apply to
the receiver and he would pass upon their demands.
81 course he could not he sued without the authority
OF the court. 10 was well established principle that
the receiver was only The officer OF the court. Pro
I fdni0 be was the court. Chancellor Walworth had
said IN like case that to permit receiver To be
sued would be TO permit the court itself TO I've sued.
one OF his first duties was 10 ascertain who were
the stockholders OF the company VI any Of them
occupied relations in which they were credi-
tors 10y reason or their certificate being
spurious, they would have 10 present their
claims a. debts for which the corporation was liable.
The Erie Railway Company acting through Jay
could, Its executive onicerl had hled bin In the
supreme Court 81 the state OF New York against Mr..
Jay Gould ms receiver and against Mr.. Henry r.. Da-
vles receiver. This bill 10 be tried IA BroOne
county. And for what purposeg TO eniOin both
ceivers from acting in that capacity The bill vas
nled for the Ostcnsbe purpose Cf discovering which
" the two was the legitimate receiver No one could
doubt that that extraordinary suit was commenced
by Mr Gould, the president OF the company. IL was
quite plain therefore, that all these suits cob
dusvc.
Judge Nelson--Can any OF the tbirty.two judges OF
the state grant inJunctions In the litigation,
operating against each othcff
Mr.. Noah Davis-yes, sir: that ~ the reason why
an Injunction was granted here by Judge Catdozo
and the place Of trial put IN BroOnIc county for
while any Judge may grant an Injunction that in-
junction cannot be removed except by motion TO