The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1874-12-09
THE LUDELING BUSINESS.

next Tltiay.
THE LUDELING BUSINESS.
DEC sslOY oS THE'SITED STATES svpEfsrE .os' "a.
The opinion and decree OF the United
States Supreme Court in the celebrated ease
of jackson and others VS.. Luielin:, Ray and
Others, has been anxiousiy expected for several
days by the members Of the bar OF our city.
A copy Of this opinion was Seceiyed in this
city yesterday, and we axe permitted to make
some extracts from it.
1t is too long document: for our columns,
covering sixteen pages OF printed matter. We
are told by competen. judges that i: is a
mastery analysis Of the facts of the case and
Of the principles Of equity jurisprudence ap-
plicablc thereto. The passages we publish
show what was tao opinion of the court as to
the moral as well as the legal charactero OF the
transaction by which Chief Justice Ludeling
John Ray and others. became as they thought
the owners Of the railroad between Victsburg
and Monroe, :low known as tie ''Nor} J..uisi-
ana and Texas Railroad"
After :eciting the allegation. Of .hc com.
plainants' bill and the .acts il connection
with the sale Of the railroad made. by tic
sheriff OF Ouachita parish. 4. Monroe. on
February ?. 1866. which SHOW Tat The Sheriff
BID of the property 70 Branneg Il &c. 10.
$3.50, 200, but set aside the adjudication at the
instance Of John L. Ludciing and his ..sso-
ciates, and BY their advice and counsel, and
that he afterwards at second crying sold it to
Ludeling and associates Tor Sc. O0o the court
say:
Were there nothing more in this case than
is narrated by the brief history thus given,
which is uncontradicted, it would be difficult
to characterize the. transaction as anything
less than a great wrong perpet1ated by the
agency of legal forms. The great body OF
the bondholders could have known nothing of
the proceeding to sell the mortgaged property
and discharge their lien. Their residence
was remote, ahd the sale was hurried as fast
as the forms OF law permitted. Not q day
was lost. They We're not afforded an opportr-
nifty to attend and bid at the sale. or pay off
Gordon's small claim OF $720 Neither they
nor their trustee were consulted.
The sale was made in village far in the
inferior. 1t was advertised in only one local
newspaper, and not q day longer than the law
required A tarcical apprasement was made
ct the last moment, obviously intended to "a
cilitate q hasty sale for nominal price.
Onerous and illegal conditions of sale were
exacted from other bidders, but not from these
purchasers, who paid nothing except to them
selves. 4 property upon which had been ex-
pended nearly two millions of dollars, togeth-
er with large stock subscription, large grant
of lands, and considerable movable property
was bought for $4,000 by the very persons
(Ludeling a. Co.. who defeated a sale for
much larger price, and the purchase money
was retained by themselves.
The Court then goes on to show what were
the relations in which many of the purchasers
stood to the complainants. The opinion de-
clares them to have been trustees, who are
prohibited in equity from destroying the value
Of security belonging to those for whom
they are trustees. The language of the Court |
IS
When two or more persons have q common
interest in security, equity will not allow
one Of them to appropriate it exclusively to
himself or impair its worth to others. Com
nunity Of interest involves mutual obligation.
The opinion then declares that the defend
ants (Ludeling and Co.. } entered into a combi-
nation, " the object Of which was to divest the
railroad company Of its property and obtain it
or themselves, at sacrifice, or at the lowest
price possible. But they had no right to enter
nto such combination, had no right to seek
heir own profit at the expense of the railroad
company, its stockholders, or even its bond
holders. Such a course was forbidden by
heir relation to the company. 1t was their
luty, to the extent Of their power, to secure
or all those whose interests were in theil
harge, the highest possible price for the
property which could be obtained for it at the
,heriff's sale. They could not, rightfully
,lace themselves in position in which their
interests became adverse to those of either the
tockholders or bondholders."
This coordination the Court character
yes as ga plain violation OF their duty-a
reach of the trust reposed in them-and, if {
lot an actual, at least {. constructive fraud"
The agreement entered into by the defend
nts prior to the sale to purchase this railroad
!, then considered and commented on thus
1t is impossible to characterize this agree
lent as anything else than gross fraud.
IS obvious purpose was to remove competi- :
on at the sale. 1t was fragrant breach of
.ust on the part of Horne Zone of the pur-
nasersl. and it was q fraud in Ludeing, with
nowledoe of the trust Horne had under r.
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