New-York tribune., 1875-05-11
LOCAL MISCELLANY.

THE ST. PAUL AND PACIFIC RAILROAD COM
PANY SUIT.
rnR CONVICTION or JAY COOKE co.. THE SECRY-
TA,Y OF TIE NAVY, AND OTHERS WITH THE SUIT
pnr,NEp-suIT BROUGHT TO RECOVER MONEY
ADVANCED FOR A CERTAIN rURfosE, BUT OTHER
WISE UsED-IRoN BoUGBT WITH SUCH MONEY
MoRrGAGE rO TIE BONDnoLDERs-TIiR INJuNC-
TroN rREvIoU LY GRANTED MODIFIED.
One branch of the suit of Lucas Weiten and
others against the ST. Paul and Pacific Railroad Company
aud decided yesterday In Supreme Court.
General TeTm. Tho plaintiffs bankers Of Holland,
who claim to represent the bulk of the bOndolers I'M
der 81 100000 mortgage, made by tie Ct Paul ana
Pacific Railroad Company to three trustees or these
trustees the defendant Moorcbead, who was member
of the American and English firms Of Jay Cooke Co"
and Jay Cooke, McCuloch Co, was one, and he was
also construction agent of the Company with the pro
eeeds OF the bonds large arcrnt OF railroad IRON was
bought and shipped TO this country, and some IL sun III
the store Of Woodruff Robinson, who are parties 10 'ms
action.
The plaintiffs brought suit against all the parties 10
whom they could trace any portion OF the iron, where
had not bought outright and paid ior claiming tno'
as IL was pledged tbem they had night 10 10llow
and It's proceeds into whatever hands they could nd H.
They procured injunction restraining the defendants
IN suit from parting With such portion of the iron or
It's proceeds as in their hands The chief defendants
appealed The Court to those who did appeal susains
the Injunction, bit modiiies II in some respects 49,.
holds that as the iron rss were purchased and received
constructing of the track OF the raiiroad ,ll ls
70 render the iron subject to be ortsagc and the
plaintiffs clear, equitable right 10 have these Iails d
voted Ia the purpose which they had been purchaser
iie holds that tic authority given by the directors to
Moorchcad to dispose Of the property was N pam s t'y vS
ation might be excused by tho anan,ia heceSs.esiSn siS
ane etcnaaon ~" TO warrant diversion Of property
eolemuly appropriated there stodld be shown cear
aud thai is not yet shown Court hy the defendants
In such matter the utmost good fith should oe sh3Tn
by minute statements oi t.e CIRCUMSTANCES WIN" Ava "
IN" ron w,s pir Of the security but only in equity
AGAINST persons buying with noce Of the lien or With
pa ting with value for it. BY the confederation ana
eouson OF the Gneciols ana tne aCtS @ aT,,y, I t
rails were disposed Of TO other persons iof very ake
.Hs anu Their + ino no oe sg anoHt s Mo"ecad as
trustee Ol the bondhoderS, undoubtedly had cuhpietc
knowledge OF the contents OF the mortgage and knew
tho right of the honGholders TO have applied 10
tile Construction of the road and, having tldt knowl
edge inv9ldated the sales made to jay Cooke Co.
ana to Cooke McCulioch 4 Co., because he was
O member of both those firms. That be did not
actively participate IN the mapasement m lhe
business of those firms mako no difference
lie was q partner. HIS duty was TO communicate lls
knowledge 10 them, and II lie dld not ma ptfs ",St
beer The consequences rather than mnogGn Ira rcL
sons They are chatseame WIN ms ,, Th"iSs
portions sold Ia vihbard, Foote Co are subject TO he
came equities for while they took the nominal title Jay
Cooke Co. advanced the money Tor tnth anu W ,no
end all that remained unsod was turned over TO Cooke,
hctnlOch
the rights OF bona tde purchasers those rights were lost
the rcpuTcllase by Cooke, MCCuliocb 90. lh9
wrvngdccr allowed TO profit nv the acquisition OF
anothtrs bona hde tlle whe II nae nn cls'te @ & ~ ns
misconduct or breach Of trust Whtther jay tn"Ee
proc eds Of the iron depends on facts not yet uiy
As to the pledge Of ei7 tons Of the iron The secre
tary of Navy Judge Daniels after an elaborate eX-
animation decides that he mad night TO deposlt noneys
for foreign payments with Cooke, McCuoch and Coz ana
having deposited n lawful and proper for hiu 70
exact such securities a he could obtain protect his
fiSf
eelve transfer the iron amt hold II for his rembuS
ment 80 fa AS the firm had any interest in It, if any such
tney may hereafter appear 10 have had which may prove
10 he psrfDount 10 the present claims Ui the bond
hands OF Cooke, McCuloch and Co.. aud was mere debt
The secretary OF the Navy could DO nothing 10 recover
the money he roinquished notins ior tc ana
st was taken as security 1or precedent debt which
gave him no better title Than Jay Cooke Co. MAJ & t0l
transferred to the Secretary at The time. it was
the time II was lawful although plainly inindeons,
because of the financial embarrassment in which the
1t was lawfully made, The secretary believing in
good faith 5s that D le GS nSdsqSs had no nd.@s s@
Of the plaintiffs equities, it was a valid
pledge. II the debt and security shown 20 be he
same the injunction should Le modified to permit
the sale Of enough Of this lot would be required to
that this advance has not been greatly reduced by pay
ments Of the London ti and the right to hold c IRON
eorrespondiney reduced and tnat cannot be ascer
tanned final hearing of the case, thc injunction
should not he present modified Though the Secretary
Of the Navy not within the Jurisdiction of the Court the
and s actual holders and the injunction snould
DC sustained, that the ends ot'ustice nc secured
As to the iron transferred 10 the NcUYOik Guaranty
and Indemnity Company, Judge Dauiels holds that they
stand In totally different position. They advanced
their money it in good fath evidence from Moor
head he had night 10 dispose Of ii, and without
notice constructive actua OF the plaintiffs equities
They therefore have right Ia sell tie iron pledged ~
them for their reimbursement, but If any balance should
remain beyond that that balance which il pledged 10 the
Secretary of the Navy must remain under the injunction
In conclusion, Judge Daniels decides that the plaintiffs
have the right bring this action, otherwise they
would be without remedy the directors OF the road aud
Moorbead eoncnrring in the disposon OF the iron ~
ing protect them and csulnable cOncuIlng in Moor
heads action.
The orders are to be modified suggested with costs
20 the New-Iork Guaranty and Indemnity Iompory,
and with leave TO PaymaScT Cutler who has taken the
place Of the Secretary of the Navy 10 apply fo turtle
IDoihcati proof that the 4lU0 900 advance, any
large part OF ii, Is still unpaid.