New-York tribune., 1874-07-02
NEW ERIE CONFLICT.

AN APPLICATION FOR AN INJUNCTION AND RE-
CEIvER-ALLEGED IRREGULARITIES AND FRAUDS
IN DIVIDENDS, PURCHASES OF STOCK AND COAL
LANDS, AND In THE EXECUTION OF THE RECENT
MORTGAGE.
Perhaps the most noteworthy event in Wall
st yesterday the announcement Of new conflict in
Erie and the service of papers upon the directors
and officers Of the Company at their respective
Offices The complaint made by John c. ANGEL pre-
ferred stockholder and bondholder OF the New-YoIk
and Erie Railroad, the obligations OF which corporation
have been assumed by Erie. Application was made
TO Mr. Redfed Of the firm Of Barrett, Redheld BILL,
for a copy Of the complaint, but he refused it
A copy Of the complaint obtained, however. The
complaint rehearses alleged Illegal acts Of the present
administration charging the principal members with
fraud in purchasing 5000 shares Of the stock OF the New
York, Buffalo, and Erie Railroad at one price
and turning it into the Company at q much higher
figure; that Blschofsheim Goldschmdt, formerly the
London bankers Of Erie, illegally held large balance
belonging to Company; that President Watson ille-
galy retained in his own name the deeds OF the coal
lands purchased at the beginning OF his administration
for the Company. The complaint prays that a
receiver be appointed TO whom the de"
nnauents shall DO obliged TO make account
that the officials and directors be prohibited from dis
posing OF any the bonds issued under the terms Of
the mortgage for $OCOOOO and that they be enjoned
from paying distributing any more money under the
pretext Of dividends and lastly, that the receiver be
authorized TO begin proceedings to set aside the mort
gage above referred 70.
one OF the directors OF the Erie Company spoke In
explanation Of the suit follows: SUIT has been
begun against the Erie Railway Company by John O.
Angel, In which he charges, first, improper div
dends; secondly, improper purchases OF Buffalo, New
York and Erie stock; thirdly improper purchases Of
coal Iands fourhy that the title Of the coal lands
vested IN Mr.. Watson individually. without any declara
ton Of truseeshp thy that the assent OF the stock
holders to the recent mortgage executed by Erie was
not obtained These charges substantially the same
that have formed the subject OF so much comment for
months past and pronounced by the officers OF the
Company to be without foundation. The director stated
that the purchase Of the Buffalo, New-YOrk and Erie
stock was made after careful consideration at the low
est prices obanabe and after special counsel had been
employed TO give their opinions in respect to IT. that
the coal lands for the use Of the road aud that
their product necessary for its own consumption
that the title TO the land was originally taken in Mr.
Watsons name, but long since conveyed by him TO
the Company and that In respect to the main charge
the failure Of the stockholders to confirm the mortgage
recently executed the answer will be that no notice
necessary the opinion Of eminent counsel among
them being VIM NJ. Eyarts. aud next that such notice
was actually given.
The substance OF the complaint VIII be found below
TIE COMPLAINT
The first material charge Is that the payment Of
dividend on the common stock before the payment Of
full dividend on the preferred stock Illegal The
second is that the e 10000 mortgage recently executed
As illegal and invalid account OF Noncompliance with
Will That the annual election for Directors OF the
Erie Railway Company liked by law for the second
Tuesday OF July each year and that the said mort
cage was so executed more than SIX months before
Inc said annual election for directors for 1874,
and that no notice OF the intention OF the
Company TO create such mortgage Lad been published
newspaper or otherwise, IN tins city or elsewhere
rfor the execution and recording OF the mortgage
aud particularly that no notice Of any intention 10
create any mortgage was published any where during
any part of the ten weeks next preceding the annual
election for Directors and the said mort gage was not
executed for purpose mentioned In the act relating
Railroad Company passed April 1890, or IN the act IN
ay,1iton thereto passed April 2, 1891 the
10 create entirely lien ia addition 10
tire liens existing April 81 lo6l, upon the property
formerly belonging 10 the New York aad ie Railroad
Company. . - .,-.. =. -
: TX That the defendants now threaten to proceed
pnder the said mortgage 80 wTOngfuly executed aud
deiyered and 20 negotiate and sell the bonds In the
Sapt FOR the best prlce Obtanable and that, unless
Tesfraibsd by this court they will execute their i
proper and unlawful purpose. -. :. u. -. =. -.
THAT the gross earnings OF the defendant the Ere
RAILWAY Company y, for more than hve years past, have
moi eanaled IT'S current expenses and osses properly
and lawfully ehargesble against Us current income
aeeoun for the purpose OF asceraining net profits by
AZ least Is 900 600 and in OF said years have the
ross s or income of the Erie Railway Company
sseeD equal ~ the amount OF its current operating eI
rents aud interest and In 40 one OF those years