New-York tribune., 1874-08-17
CALIFORNIA RAILROAD LIIIGAION.

THE SUIT OF MICHAEL REESE AGAINST THE CALifo"-
MA PACIFIC RAILROAD AND OTHERS FOR > S"Voo'VVo
MIR. LATHAM FILES HIS ANSWER-THE CENTRAL
PACIFIC COMPANY SAID TO BE THE PARTY IN
WHOSE INTEREST THE SUIT WAS BROUGHI-fl-
NANCIAL OPERATIONS OF THE CALIFORNIA COM
PANY.
SAN Francisco, Aug. 16.-On Aug. Z, Mlchael
Reese sued the California Pacific Railroad Company
Milton S. Latham and others, to recover ooOop Oh ac
count of alleged fraudulent transactions On SATURDAY
Mr. Latham dod IA separate answer. He declares lha''
until within two days OF the institution OF the SUIT
Reese had ever been holder OF any stock III
the California Pacific Company, aud has been III
duced lend his name to the central faciho
Railroad Company in bringing this action; that
the real parties the Central Pacific Company ana
that the action IS prosecuted entirely by them that all
the allegations OF fraud made by Reese against dciehu
ant arc nfamousy falsc that he never WAS interested
with Roeofsen Ryder and others in building the ROADS
Of the California Pacific Company, and never had any
shares Of stock except few issued IN loiO Ill
order 10 enable hun TO become uIIector
in the Company; that while the California
Pacific extension was,cOnsructnc, Roeoisen and Ryder
applied to the London and San Francisco Bank Ior
oan and Latham assisted them to obtain IL elsewhere
for which service he received twenty bonds OF the Com
pany, realizing therefrom $500 which IS all the
interest had i'll either Company that in Jan
uary 1870 defendant became member of the Board or
Directors Of the California Pacific Railroad company
consolidated that at the time said Company was
indebted to the bank Of which defendant Is manager
and defendant also agent ana representative uI t
holders a large amount OF the capital STOCK ul shu
corporation owned bona fde by various persons reI-
ing in the Eastern States and Europe that LOT
The sole purpose OF protecting their interests,
and without tie slightest interest 0 us
own, direct indirect, defendant became
members the Board Of Directors OF the Railroad COM
pany on the of june 1870; that shortly thereafter
application made By the contractors Tor tht con
sructou aud equipment Of the California Pacific xten-
sion Company for release from te obligations OF ther
contracts SAID application was base upon thrr % 0%nef
10 surrender certain notes OF the California Pacc R,l.
ROAD Company which had been depo.ted In the Uauk Ot
which defendant was III charge for saie keeping,
ana defendant having ascerained the utter inability
the contractors To complete the railroad Of the C-
fOinia Pacinc Railroad Extension ,ompany, ana aeuns
with his cOdirecors, voted for the release OF sd CON
tractors from their contract upon condition OF surrender
aud cancellation oI sid n"te tnat W & S ii, ,e
Company issued bonds To the amount OF tjOD terlhg
as TIE income bonds which were transmitted 10 Lpnuon
and taken IN gOOl part by the owners and holders or
the capital STOCK OF the COMPANY Inc pfucecls
amounted 10 SJoI2si al! OI winch was "eeouuou 'o' "
lie gives an account of the purchase of the property
of the California SIC IN Navigation company, N3tth
Pacific Railroad, san Francisco auu huhDou. Day ~ M
road and says the Contamination OF thcsc edcs inc
Genital Pacific directors became directors OF ile pu.
chased companies. THIS was before the DOnds were
issued, aud 1T understood that, on tAelr
ISSUANCE, all the companies would be consolidated.
Stanford U" were 30 dettrhlheu 10 own au ooitio t
the California Pacific road thodgh KNOWING its lnueuteu
Oi $i4lOOJ That tley PROMISED Litnn IL NC Hou"
visit Nc~-IOTh and Obtain tAe cOheeut Oh tle stoeA
holders, whom represented ana personally assume
ali obligations over tho sun hhhed they "OuIu Oh His
return from Ncw-IOrk, give hn ther note lor
s25OCOJ He went % NeWYJrk procured the consent OF
The stockholders the terms OF the proposed SAFE ana
also the OF those in Europe GA his return TO
California the Company Issued bonds 10 the amount Oh
100000 secured by second mortgage on Tue Company
property, which bonds were 10 Do Guaranteed
10y the Central Pacific Company Af'er the
issuance OF the bonds tine directors resigned
and stamford Huntingdon HOpkinsOn and Others were
elected directors, aud Its capital STOCK was deINeIed 10
Stamford and his associates. lie says that Win the ex
ceptlOn of "A him OF Stamford ct al for s25OOO
they pald dollar for the 1G,lOl shares obtained
by them Stamford GO. have refused lie says, TO pay
bonds Of the California Pdcihc ana have
caused the Company confess Judgment Tor
1900 its DrOmsSOry note, one day Old
III of j. B. HoggA of this city, through whom they
are tryiag obtain perfect tItlc TO ,he California
Pacific Railroad. Ii round numbers, the total Obga
tons of the Vallejo system may Je pat down at 5000
90 aud il has been suggested the best thing Tor
the budh0ers Will be iOrecose and take possession
OF tDe roads themselves.