The New York herald., 1876-03-11
THE COURTS.
Progress of the Bleecker Street Rail
road Fight.
Charge of Fictitious and
Fraudulent Bonds.
THE RECEIVER HORS DE COMBAT.
Compelling Creditors to OBJ
serve Good Faith.
THE RECEIVER HORS DE COMBAT
Penalty Of Allowing Drunken Men TO Ride
on City Cars.


lowe, an amended answer. THIS answer, addition to
the allegations in the original, which have already
appeared in the HERALD, sets up allegations 20 the
effect that large proportion OF the bonds referred 10
in the complaint in that action are void fictitious and
fraudulent evidences Of debt, and held by the
thereof with full knowledge OF such fact; that
about the l7th Of April, 1850, the Legislature o.
the State OF New York passed act, entitled San
act TO authorize the construction OF railroad in
Fourteenth street and in other and OF
the City of New York whereby stephen r. Roc, John
Stewart and others acquired the privileges contained
in said ac that the said grantees thereafter-to wit
on or about November O. 1864 transferred or pre-
tended to transfer, the rights franchises privileges
and property acquired pursuant TO the said act TO the
said defendant the Beecker Street and Fulton Ferry
Railroad Company for the OF 5000 900 in the stock
of the said defendant company and 434 Of the bonds OF
the defendant company referred to in the complaint
and the defendant informed and believes and charges
be true that the said transfer or pre-
tended transfer 10 the defendant company IL was
aged and controlled by Jacob Sharp aud certain
associated with hlm-to wit John T Conover Peter b
Sweeny, Hugh Smith, Thurlow Weed, William NJ
Shardlow and othersau or nearly all OF whom had or
pretended have large interests IN the said grant
that said Sharp and others Of the directors and man
ayers or the said defendant company gave the said
bonds ana the said stock Of the said company the
grantees-that is, chiefly to themselyes-upon the un
lawful agreement and understanding that the said bonds
and stock should be really transferred to the said
ayers Of the said defendant company and tner asso
cates for little or no consideration; that said Jacob
Sharp and his associates and others the managers
derook 10 pay for said grant sum largely 1 of
the real value the property upon agreement the
managers and directors ard their associates should
share the Of the bonds and stocks paid;
that large amount Of said bonds still remain In pos.
session OF the persons who received them upon
the Aforesaid unlawful agreement in the
possession Of their assigns, with notice Of said
lawful agreement ana that consideration has been
paid by such holders OF the said bonds therefor, and
they are vo;d and improper evidences of debt and
tFrv Otseht ha had f af
bonds and they should be adjudged TO be delivered up
to he cancelled
Immediately succeeding the service OF this answer
the counsel for the Receiver were called into Court
an order 10 show cause why It should not be struck
out. The motion came up for argument before Judge
DOnohue in supreme Court, Chambers.
Mr.. John +. Deven, who appeared for plaintiff,
moved 10 have the answer stricken out the ground
that TIC Receiver had 10 rlgt TO serve an amended
answer setting Up any facts except his appointments
that the Receiver had previously served
setting up all the facts he had been allowed by the
Court TO set Up, and he proposed 10 up
interfering with the right Of the plaintiff to prosecute
his action.
Mr. Robert Ludlow Fowler, who appeared for the
Receiver and claims that the sui is brought the in
terest OF fictitious bondhoders including Jacob sharp
John T. Conoyer and others opposed the motion. Ii
claimed that the argument OF counsel tor the motion
was merely glamour OF sophis,ry, and where he had
used the word right therein he wrong. The
Recover had shown himself 10 be faithful and
efficient oiicor Of the court, who called upon to
protect the rights oil creditors and stockholders and
lie fully intended to do so. He gave his learned op-
ronob notice that so long single remained
lent manner in which sharp Connver and their asso-
Clates acquired the bonds and their interest In tn
road, and IN every way endeavor 10 defeat them In
their evil designs. There had been traditional fc-
ton that court was pure fountain OF justice; but
court trying cause ON hypothetical state OF facts,
with the real facts concealed, would be pervertion OF
the maxim II proper defence can be brought before
the Court, and fraudulent and fictitious bonds be de-
cared lie such the receiver intended TO do it, he
felt bound TO that the Court be not deluded by any
f.. sophistry
a
tion when he was appointed simply TO protect the t
ganis, and not parties outside
Mr. Fowler then asked for stay in order 10 get the
opinion OF the General Term the Receivers relative
rights snd duties to stockholders and creditors of the
road and how far he could up by the fact
that the honds were fraudulent, but Judge Donohue
fused TO grant IL
TERMS OF A COMPOSITION DEED
An Important decision has been given by Judge
McAdam, Of the Marine Court, in tho suit of David
Stuart ct al VS.. James wlmore ct al The point in.
voved in the decision Is that any separate agreement
by when creditor TO himself more advan.
tageous than those secured to the other credi.
tors by the terms Of composition deed Is void and
fact such creditor orally announced his deter
mination TO exact such advantage at a meeting of
creditors does take the of the rule unless
be a.rmatively made to appear by him that all the
creditors had knowledge Of the fact before they joined
in the execution Of the deed The following is the
opinion cmbodying the dccision:-
Fox * wilmore, the makers OF the note in suit by
business misortuues became unable to meet their liza.
btos they matured, and applied TO their creditors
for extension of time TO pay tier respective de-
mauds A meeting Of creditors was held. which
resulted in a mutual understanding that the re-
CURED time should be given, by accepting for the
amount OF their respective demands the debtors notes
payable II nine equal parts at three, four five, SIX
seven eight nine ten and eleven months, bearing in
tcrest a composition deed was therenpon drawn
expressing this agreement IN legal FORM The plaintiffs
oechncd 10 sign the composition deed unless the
debtors procured the Endorsement OF James Milmorc
(tbe ather OF the junior member OF the debtors rm)
10 the nine notes the plaintiffs entitled TO receive
The indo-semeni was obtained aud the notes were
delivered TO the plaintiffs who ihereupon consum-
mated the arrangement by joining IN the execution Of
the composition deed The present action is brought
upon one OF the notes obtained, and tho ineorscr
who alone defends the action, claims that under the
circumstances ne IS not liable upon his indorsc-
ment Tie rale is that any separate agree
meut by which ono creditor secures 10 him
sell more advantageous terms than those secured
20 the other creditors by the terms OF the composition
deed operates as a fraud upon them and Is void uron
that account and that such agreement is equally
void whether made b9fure after all the other crcdi-
tors have signed lPcrrieo vs. Higgins II Abb Pr s3I.
Giimour VS. Thompson, 40 How. Pr. los and cases
o;cll 10 obvaic this general rule, Mr. sperry the
PLAINTIFF agant testified that he publicly announced
a. the rrcdtors' meeting that the plaintiff would
accept tie debtors notes unless the elder Wlmore
dorsod them, and upon Tins testimony the plantins
coriendcd upon the trial that the notes received by
them were inoofsed and delivered % conformity with
this alleged announcement This announcement would
have protected tho plaintiffs II they had not aitcrward
executed the composition cccd and IN that way became
subscribers 70 lis lcrmS SO srrupuous courts in
compelling creditors 70 the observance OF good faith
toward another in OF ths kind that any
se-wny better than mat which is common 10 all II
uHkucwL II time 10 the other creditors IL void aud
imperative Nelson Ch J. Russcli Rogers, lOWcnd
sT5 aud 10 the absence OF any proof OF such knowledge
on tho part oi The other creditors II must, upon
tho instrument be presumed that they did not know
it tSadier We Jackson Is YES, ~ This prcsump-
ou cannot be said 20 have been by the proof
cf tie alleged announcement in Of the fact that
two OF the creditors who present at the meeting
ftaDdlnR, swear that no such announcement ever
made IN Their presence and hearing and IN addition to
this conflict is The improbabiuy that all the other
creditors, with claims equally mcritorious should have
consented TO tie extension without security. with
knowledge that Tie plaintiffs, upon mere demand were
beng fully secured by what was regarded a rcsron.
Eblc Endorsement Agreements for composition With
creditors require the stfictest good faith all be
al LNnr rrnar Nm