New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1874-08-16
COURT RECORD.
SATURDAY, AUGUST Is. 1874.
Upited state. Cfrcuit Court.

leDu8nG6 answer, Lyman u. OOukO al
sweriDg for himself:
l. Admits the charter of the New Orleans,
Mobile and Texas Railroad Company, desig-
mated then as the New Orleans, Mobile and
Chattanooga railroad, and AYERS that the
change of name or the abandonment Of the
construction of a portion Of the road was
never authorized, but violation of gOOC
faith to ward the State Of Alabama; that by
the acts of incorporation Of the State OF
Louisiana the road became corporation
Of that State, and should have its dOmlcile
in New Orleans facts August -, 1868.
March 6, 1869, and April 20, 1871, and
AYERS the conditions precedent have not
been fulfilled.
g Admits the mortgages to Morgan and
Ames, March Is, 1870, and AYERS they We're
not deeds Of trust but simply mortgages in
in common law form subject to the laws OF
Louisiana; that they conveyed no little
other than as bona tide holders of bonds IN
trust for bona fide purchases; that these
bonds constituted no debt of the company
until issued by Morgan and Ames or held
tor valid consideration.
g. Admits Ames death but denies F. M.
Ames as his successor, except as holding
bona fide bonds.
4. Denies the legality of the issue of
s., $50, 600 bonds, the issue by mortgage.
March Is, 1870, being limited to $4,000, 600,
and alleges they have been principally re-
tired and Cancelled; that the second mort.
gage executed March, 1872 was antedated
to January l, 1872; that the company repre-
sented by and composed of Ames and others
never owned the road, and $500 900 was
an excess; that the cost OF the road
west of the Mississippi was 81 $50, 600,
and 100000 is unpaid for; that the
State has dorated 81, 625, 900 to the road;
hot hot ha in
excess of the cost of the entire road; that
the bonds should still be in the hands of
Morgan and Ames, and are not a debt of
the company; that there were no INSTALL
ments OF interest, and demands a full dis
closure as necessary to the defense.
). Ayers that the corporations called the
New Orleans, Mobile and Texas Railroad
Company and the New Orleans and Texas
Railroad Company, for whom the order of
sale was issued, never had any existence,
but were formed by Ames, traudulently
conspring by illegal issue Of bonds to de-
prive petitioner of his claim.
6. Alleges Boynton Brothers and Bushnell
failed to complete their contract.
I. Denies that the claim was liquidated.
8. Denies that respondent was party to
any settlement.
9. Recapitulates the mortgages to Morgan
and Ames and the deed to Gardner and
Butler, denying the force of the latter ex
cept as of trust for bona tide issuance of
bonds, and denies that they are authorized
to sue or stand in judgment Alleges that
Ames, Morgan, Gardner, Butler, John A.
GriswOld. George Innis, James A. Raynor,
William S. Williams, John L. Macaulay,
Henry H. Farwell and Charles Walsh as
directors, proclaiming they were capitalists,
and could build the road for 81 ,075,0 900, ob-
tanned Sc, 900 900, and had they been honest
the road would have been built; that in ad-
dition they obtained from the State 1000;
alleges the want of necessity for any issu-
ance of bonds by the trustees, and KnOwled ge
of this fact by Gardner, Morgan, Ames and
Butler; that these bonds were issued for their
own use and benefit, for no valid considera-
ton. and were fraud on the community. de-
signed to enrich themselves at the expense of
others, and further denies the validity of the
debt thus created; alleges that Gardner
andButler have no right to sue ON pre-
tended sale. the result of a conspiracy for
fraud TO realize on bonds fraudulently d.
vided among them; that these transactions
are null and void and the pretended cor
poratiOns had no legal existence, the cor
porators being the trustees and associates,
and thus are a continuation of the fraud,
combination and conspiracy, contrary to
equity and good conscience; that the suit
was commenced in fraud, the order of sale
being granted on fraudulent representations
to pretended company having no cOnnec-
ton with the New Orleans, Mobile and
Texas Railroad but in name, was null and
void; that any sums paid FOR bonds fall
short of what the trustees owe the COM
pany.
10. Denies that the mortgage titles were
in force when the B0ynton and Bushnell
contract was made.
ii. That respondent did not look to them,
but relied on the representations OF the
officers of the company who have attempted
to settle with him, and alleging assets in
excess OF the liabilities. Denies any COM
binatiOn on his part, and claims the right to
proceed IN bankruptcy.
Respondent further sets forth, in answer
to interrogatories, his contract with G. w.
r. Bayley, chief engineer, and James A.
RaynOr, president of the company, and
agreements with Boynton; the suspension
of work in March 1873, etc.
To the supplemental bill respondent
answers:
l. Admits the incorporation of the New
Orleans, Mobile and Chattanooga Railroad
Company, Alabama, and AYERS its existenae
in Louisiana to be the result of acts of
Louisiana; that the change of name was by
virtue OF resolution of April Is, 1871.
g Denies that any other than the Mobile
branch has been completed under the Ala
bama acts; atfirms that the cost fro,n New
Orleans to Sabine river was not S9,00000O,
but about $2OO0,O0O, portion of this being
made up of illegal and improper charges,
100000 being still unpaid and $50 900
paid by the State.
3. Alleges the mortgages authorized we're
to be under the laws of Louisiana, creating
no debt or privilege, and only legally made
as the road was com pleted at $l2, 500 per
mile; that the trustees had no lien or priv
nege, and the trust would cease as the
bonds were properly issued, the holders
becoming the mortgages and contrary
provisions are null and void; that the pre-
tended issue was without consideration
and fraudulent.
a. Admits the mortgages to Ames &
Morgan, the death of Ames and resignation
of Morgan, but denies Frank M. Ames is
their successor, or ever had possession of
the road west of the Mississippi; that the
law of Louisiana prohibits the taking of
the road in trust for third parties; alleges
that the decision was ex parte and without
the knowledge of single holder of the
first mortgage bonds; tkst F. NJ Ames
showed no right of action, and the decree
is imperative, and that the cause of action
was not chancery proceeding but one of
law.
S. Admits the act authorizing second
mortgage bonds, but alleges there could
have been no legal issue of them as the
first forty miles was not completed JAN
nary Is, 1871, and no second forty miles has
over been completed.
6. That Gardner and Butler, in cOnnec-
ion with Ames, Morgan and others. pub
lished that they had built tie Mobile
branch. purchased the road to the Sabine
river, furnished all the means and sub
,cribed q working fund of $4,000, 900,
e800, 900 cash being already paid in as in.
1ucement to capitalists to take the first
bonds; tkat the $4,OO0,OOQ bonds
could not be legally issued and in the hands
If Gardner and Butler, were actually in the