The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1874-11-17
RAILROAD LITIGATION.
A CHARGE OF FRAUD.
THE F. w. M. q c. ROAD.

PRACTICES AvERRED-THE MUNCIE TRANS
PoRTATI0N COMPANY DENOUNCED AS A
FRAUD--TRIAL OF THE CASE TOMORROW.
FORT WAYNE, Nov. 15.-The following Is
the text of the complaint in the case of
Simon Rindskopf VS.. the Fort Wayne, Mum
Gle & Cincinnati Railroad Company, upon
the strength of which a receiver was ap-
pointed on the 18th inst. Simon Rindskopf,
in behalf of himself and others, holding
bonds secured by first mortgage
on the Fort Wayne, Muncie Il
Cincinnati railroad, who come in
and join him in the suit, or all who may
elect to participate in the mortgage fund, to
be distributed under a decree, complains of
the Ft Wayne, Muncie q Cincinnati R r,
Co.. trustees and superintendent. They say
that the defendant, the Ft. Wayne, Muncie
IL Cincinatti r. r. Co., is a corporation duly
organized under the laws of the state of In
diana. That to-wit, on the 10Th day of June,
1869, the said railroad company, for the pur-
pose of raising means wherewith to construct
portion of the said road, duly resolved to
effect loan of Sl,S00,000 for the pur-
pose, and to secure the repay
ment thereof, it executed to the said
defendant 1,SO0 coupon bonds of $1,000
each, payable on the first of October, 1889, in
banking house of Wilson, Lanier & Co., in
the city of New York, which bonds and
coupons the said company promised should
be paid in gold at the said place as soon as
the same should fall due, the said interest to
be seven per cent. per year on the principal.
payable semi-annually on the first days of
April and October each year. That at the
same time the railroad company duly exc
cuted mortgage to j. l..
Williams and Alfred p. Edger-
ton and to their successors, and upon all the
property of the Fort Wayne, Muncie & Gin
cinnati Railroad Com pany, its entire line of
railroad. including the right of way, the
railroad bed, the superstructure thereon, Its
depots side tracks, machinery acquired and
to be acquired, and income and franchises
of the company, with all the appurtenances
upon trust on the part of Williams S Edger-
ton. By the terms OF the mortgage Will
liams & Edgerton, trustees, were authorized
uron a default being made in the payment
of any installment on the bonds when due
or on default of the payment of the princi-
pal of the bonds when due, to take possess
sion of the mortgaged property and operate
in the interest OF and for the benefit OF
the holders of the bonds and coupons, and
upon certain conditions in the mortgage, to
sell the mortgaged property aud to pay
over the proceeds while so possessed by the
trustees, and the purchase money arising
from the sale to the payment of the bonds
and coupons thereto attached. The plain
tiff AYERS that the interest on the whole 81
SOC, 900 bonds, maturing On the 1st of October,
1872, and on the lst of April and October,
1873 and 1874, is
DUE AND WHOLLY UNPAID,
which fact was known to the trustees, who,
disregarding their duty, neglected and re-
used to take possession OF the railroad. OF
the first mortgage bonds of 81 800, 500 were
sold to the parties now interested in this
suit at 100 cents to the dollar, and 300 were
sold to other parties now interested in this
suit at 90 cents to the dollar. That after the
sale of 500 bonds at the prices named, the
presiden t, directors and managers of the
railroad company traudulently sold 1000
to parties residing in Boston and
elsewhere at 20 cents on the dollar: that
the president, directors and company fraud
ulently combined with the purchasers of
1000 bonds, and transferred to the pur-
chssers a large amount of the capital stock
OF the company, comprising large majority
| of the capital stock which the company, by
\ its charter, was authorized to issue; that
this stock was so issued, transferred to, and
accepted by the purchasers of 1000 bonds
for the avowed purpose OF passing the con-
troll and management of the road to the
purchasers, aud to take the road
and management out of the hands
OF the stockholders who have honestly
| subscribed and paid for their capital stock
and for the further fraudulent purpose OF
enabling the purchasers OF the 1000 bonds
sold at a reduced price to control the road
business and earnings of the company, SO as
TO favor their bonds, give themselves the
preference and advantage over the 800 bonds
sold at par and at 92 cents to the dollar
That the railroad company executed to
George Tyson, Henry s. Russell, and John
A. Burnham mortgage, and a third mort
gage, denominated by them as an
equipment mortgage to secure 500 bonds
and the coupons attached bearing pen
cent. interest per annum, 345 of which the
said board of directors sold to themselves
and their confedef ate5 at 55 cents on the
dollar, amounting in cash to $4,000. That
they fraudulently combined among them
selves and confederates, who were part Of
their own number or interested with them
an arrangement for the investment of the
loan. That the trustees in the mortgage
named fraudulently took $4,000 and pur-
chased rolling stock and equipments for the
road, and instead of taking the title in the
name OF the said railroad company the trus-
tees, by the consent of the officers and
directors, took the title and the rolling stock
in their own names, calling it
THE MUNIcE TRANSPORTATION co.,
a corporation or pretended one claiming to
hold an interest in the title 10 the rolling
stock and equipments, which pretended cor
poration, with fraudulent intent, but with.
out any right, yet with the connivance Of
the directors and officers of the company
have marked all the said rolling stock and
equipments with their corporate name o.
the Munice Transportation Co. That the
rolling stock and equipments were pur
chased by the money of the railroad com
pany and borrowed of the said parties, anC
the title was so taken in the
name of the trustees for tn,
fraudulent purpose of preventing th,
stock and equipments from becoming al
appurtanent to the said railroad. That th,
trustees and their said confederates claim
: to lease the said rolling stock and equip
ments to themselves, acting as the directors
J and officers of the company for an annual
rental, equal to per cent. of the 345 bonds o
J 81. 900 each, amounting to S27. GOO annually
over 10 per cent. on the actual amount, 81
! advanced by their confederates to the com
pany in its bonds The plaintiff ex.