Wilmington daily commercial., 1872-01-03
RAILROADS..
Proceedings Against the Junction & Brcak-
water Railroadst
THE NEW YORK STOCKHOLDERS ASK FOR AN INJUNo-
TON AGAINST CERTAIN OTHERS.

water Railroad, Thomas Baumgardner John NJ.
Barry, John A. sheaff, Benjamin Burton, Chas.
@. Stockley, Edw. ID. Kitchens, and Curtis s.
Watson.
Tsincair and Bovine are residents of New
York, the former being publisher OF the New
York Tribune. They put $4,000 apiece in the j.
& d. II. II. OF the defendants, Barry and Sheaff
are the contractors who built the road from
Georgetown to Lewes, and as we'll as all the
others are now Directors of the Company
The proceedings were upon motion Of Mr..
Higgins for the plaintiffs for a rule to show
cause why preliminary injunction should not
issue to restrain certain of the defendants from
voting ON stock held by them, at the Annual
Election (Which will take place on the Sth inst.)
The plaintiffs were represented In Court by
Attorney Higgins, Esq., and Charles Gibbons,
Esq, of Philadelphia; the counsel for the de-
PENDANTS were Hon. VIM. G.. Whiteley. and VIM
O. Spruance, Esq.
The bill is verylong, and sets forth that Messrs.
Sinclair and Bovine are citizens OF New York
Baumgardner Barry and Sheaff, of Pennsylvania
and Burton, Stockley, Kitchens, and Watson, of
Delaware. The capital stock of the junction
and Breakwater Railroad Co. is $500, 900, divided
into Il, 600 shares of S25 each. OF this, II 04S
shares have been issued, and Z 952 are unssu0d.
The directors made contract with John nj.
Barry and John A. Sheaff, associated as John NJ.
Barry a. Co., to build the 3rd section Of the
the road, (from Georgetown to Lewes,)
and the Pier at Lewes. The iron was to be 40
lbs to the yard, Of the best American make, the
same as had been laid on the End division, Mil
ford TO Georgetown.) The. contractors were to
receive for the work S176, 900, in Delaware State
bonds, ISSUED by the Safe for the aid of the
road, and $780, 900 in full paid certificates of
stock making 5000 shares. The bill then alleges
that Baumgardner associate with Barry
q Co., and the capitalist for whom they really
acted. After the work was completed, the bonds
and $3.50 shares of stock were transfer red to
Baumgardner while Sheaff still holds 20 shares.
1t states further that the contract of Barry Co.
was not fulfilled, that the iron they furnished was
of inferior quality, and is now nearly worn out,
is unfit for use, and unsafe, and must be re-
placed, although the iron on the I'd division, Ito
which that ou the third division was to be equaD
was still good, after four years use. The bill
then alleges that Barry u Co.knew of this inferi-
ority and bought the iron at low rates, and thus
knowingly grossly defrauded the Company.
The bill goes on TO state that tho mortgage on
the road for $4,000 held by the State, is liable
to foreclosure whenever the interest remains un-
paid, and that the interest due December 81,
1871, il not likely to be paid. The road is alle-
ged to be in diapidated condition, large sums
due for rolling stock, &c, and further tracks,
&C.. needed, but the defendants, who are ma
jority of the Board of Directors, refuse to take
any steps to sell the remaining stock, or other
wise raise funds for the purposes needed The
bill therefore alleges that the defendants have
conspired to defeat the investigation into the
frauds as alleged, to prevent the issue OF the re-
manning capital stock, and to refuse to permit
regular oil special meetings to be held for the
transaction of the Company's business. The
bill alleges that the Company is now in danger
Of bankruptcy, and that proceedings to force it
it into involuntary bankruptcy have been taken.
The plaintiffs therefore ask an injunction to
restrain the defendants from voting ON the 5000
shares of stock paid to Barry Il Co., and that
the certificates Of said stock be Cancelled.
The counsel for the plaintiffs then read
number of afidavits in support Of their COM
plant. These include aflidaYits by j. $. tty-
man, Director Of the Company Jas. A. Chase,
Chief Engineer, and General superintendent
Jas s. Gibbons, President Samuel Sinclair, and
II. II. Bovine, the complainants Thomas Ham
bley, Caleb II. Malin. and Myers @. Oonwell.
The affidavit of MIR. Chase and Mr.. Gibbons
represent the bad condition Of the rails. The
former refers to an official report made to the
Company in July, 1871. He then stated that
the iron on the Georgetown and Lewes section
was fast wearing out, that ''the tops spit off in
lines perpendicular to the base," and that $60,-
900 would soon be needed to properly replace
1t with good rails.
After the reading Of the plaintiffs affidavits
the counsel for the defence read the joint atfida-
Wit of Messrs. Baumgardner, Barry and Sheah
They deny all the material allegations of the
plaintiffs, and assert that they well and faith
fully executed their contract. They state that
after the completion Of the work it was duly ex-
amned by the President, Chief Engineer, and
Directors of the road, and Judge Houston gave
letter Of testimonial to Mr.. Barry, certifying to
the 'skil ability, and fidelity" with which he did
his work. They say that Barry and Sheaf were
the contractors, bnt that Baumgardner and Geo.
X. Reed furnished the capital required; that the
railroad iron referred to in the complaint cost
but 900, being less than one third of the
whole work done under the contract. They
declare the iron is of The quality required, and
similar to that used by the Wilmington & Read
ing road, it being in both cases manufactured by
Atkins q Bro, of Pottsville The President and
other officers Of the road had ample opportunity
to test the iron, and that Joseph Hyde, Master
of the Machinery of the Company, did make
test of the quality, of bar at Wilmington, and
I sE tlaaA
they repeatedly asked the President, and other
officers Of the road to examine the rails while
being manufactured at Pottsville. They say that
the iron is not cheap and inferior, and that the
allegations as to its Injured condition are exag-
| gerated and inaccurate. The rails are not 30
worn but in fair condition, and require no
further repair than 40 III iron usually does.
The rolling stock they say, has sometimes
been too heavily loaded, causing increased wear.
| They admit that the $4,000 interest ON the
| State loan, due December 81, 1871, has not yet
been paid, but say that it will be before the
expiration Of the so days grace, if the Directors
i are not interfeared with by this injunction.
| They say the debt of the Company, Independent
Of the State Mortgage, is about S35 O00, of which
/ only $22, 800. is now due, and of this
$4,000 can be left to wait a reasonable
time, 80 that $12 500 alone s of pressing impor-
tance. They say that the allegations of the
| plaintiffs as to the condition of the road are
grossly exaggerated. 1t needs some repairs.
The defendants also say that Baumgardner
1 IOlub bJOSh uOb lsbutN lOI ph1Inbul VI OhItl
| q Co., that Sheaf and the Delaware de-
| PENDANTS have none of it, and that j. s. Gibbons
holds $50 shares of it. They produce an agree
ment made by James Gibbons to purchase
| Baumgardner's stock at 800 per share, (Which
agreement was not fulfilled by Gibbons,) and a
letter sent by DR.. ]. s. Prettyman offering to
purchase of Baumgardner at $40 pershare. They
alege that the remaining stock authorized by
the charter could not be sold at half the par
value, but would be sacrificed if 80 sold. They
deny that any meetings Of the Board Of Direct
ors have been prevented, and aver that all nee
essary meetings have been held, and allege that
Mr.. Gibbons has become unfit to act as President
and that the financial affairs of the Company
have been entrusted to the care OF a special
Finance Committee.
Other affidavits were read in support of this,
sworn to by @. @. Stockley, a director OF the
road Myers @. Conwell, former Engineer o
the road !; Joseph Hyde Master Of Machinery
and Jacob Y. Foulk, Secretary of the Board Of
Directors. Mr.. Stockley, in reference to the
| resolution Of the Directors not to issue the re
naming stock says he believed that the Direc
tors had no power to issue it below par. Mr.
, Hyde. in reference to the present condition Of
the rails, says that they do not require removal
He also says that the President and the Super
intendent have not directed any decrease in th'
speed Of trains upon the road. The usual speet
is 1S to 20 miles per hour, including stops.
After the reading Of the defendants affidavit
| fIa of fbair ora nj al