The New York herald., 1876-07-15
Distribution of 81, ,2S5,325 94
Assets.
THE WESTERN union INJUNCTION SUITS
Injunction Modified and the Divi-
dend To Be Paid To-Day.
Merits Of the Controversy Subject Of
Future Argument

into the American Merchants Union Express Com
pany and at the time OF such consolidation, exclusive
Of property OF the American Express Company trans
icrred to the American Merchants Union Express
Company. transfer of all tho property assets and
socumulations OF tho former made James c.
Fargo trustee, upon trust the
money and after paying the debts and liabilities Of the
American Express Company up TO the LIST OF December
1865 10 divide and distribute the remainder OF such
money among the shareholders OF the company,
proportion tho number of shares held by them
spectiveiy, they should appear the books OF the
company the 30th OF November, 1868 Upon accept
ing the trust, Mr. Fargo issued certificates OF
therefor to the shareholders OF the company equal
numoe to the shares held by them respectively the
holders surrendsring their stock to the American Ex
press Company and receiving therefor, addition
tho certificates OF trust five shares of stock the
American Merchants Union Express Company, OF the
par value OF 800 cach every share OF stock held by
shem in the American Express Company, the last
named company becoming thereby merged The Mer-
chants Union Company and ceasing to exist
pany. Out OF the moneys realized from the trust Mr.
Fargo, the 18th OF June, 1870 declared dividend
OF five per cent SIS each share the holders OF
the certificates Again, on tho 10Th of June, 1873,
sccoad dividend was declared by him of six per cent
so per share With the exception Of holders OF
shares these dividends accepted by all the holders
Of Is certificates issued the certificates
themselves surrendered. These holders of the 696
shares disputed the accounts OF the trustee in suit
brought for that purpose, and II was referred TO
Judge Henry T.. Davies to take testimony in relation
10 aud pass such accounts. The matter has been for
pending before the referee, by whom a large
amount oil testimony has been taken, and who has
rendered and filed his report In this report add
tion 10 the preceding facts. he finds that the whole
amount for which the receiver to be held TO account
Is 81, 2s5325 ~. or this sum he Is credited with
authorized payments, including $4,000 Tor MS own
trustee, to the extent Of 81, 26I $40 ~,
leaving TO be yet distributed the sum OF $23, 1S5 He
further unds that at tho time OF the creation of the
trust the American Express Company IN the assign
mcnt TO Mr. Fargo trustee, reserved thereirom
tain enumerated properties and cash amounting TO
81, 600, 900, which said agreement 1t declared
had been transferred to the American Merchants
Union Express Company, and all OF which had been
then transferred except s501. 700 in cash. in lieu of
which the Merchants Company subsequently agreed
take and did iakc stock 10 the same amount OF the
rhadclph,a ana Erie Raroad the National Express
Company and The Albany and Susquehanna Railroad.
THIS stock OF the National Express Company, number
inr 2ol shares was owned by the American EXPRESS
Company the time OF the creation OF the trust and
purchased by II on the l2th OF October 1865, at
the OF aud threequartcr per cent above par,
and was taken at par by the Merchants Company to
make up the balance IN cash. II was claimed by the
COZ tcstants that tho defendant trustee should be
charged with tho cost price OF this stock 10 the Ameri
Express Company upon the ground that he, being
Interested IN the American Merchants Union Express
Company, 1t sale by himself as trustee 10 himself
trustee and that therefore the cestu que trust have
right 10 either elect TO confirm the sale and to hold
charge him with the difference between such value
the price received by him therefor that the cestus
que trust might repudlate the sale and compel the
ran collation. thereof, and require the trustee to
place in the trust estate The property sold
The American Express Company not being party
TO the proceeding the ccstus que trust elect
confirm the sale and charge the trustee with The differ
ence in value II any. On this point the referee holds
that the trustee reserved the iul value OF the 294
shares OF the stock OF the National Express Company
at the time it was taken by the American Merchants
Union Express Company. The contestants also
tho OF The resduum OF the assets in his hands
as trustee in Mar h. in 1873 he did not receive tho
full value OF 800 shares OF the American Express
Companys stock then held snd owned by him part
OF the assets of the salc company On this poi mt the
referee satisfied beyond all reasonable doubt that the
full market value If not more, received by the
for this stock and that IL the assets stocks
bonds and resduum of said trust estate had been sold
auction by the trustee they would not have brought
anything like tho sum realized by the trustee upon mo
sale thereof by him. and that nothing appears to I'M
peach the good aith OF the trustee the transaction.
II also strcnuousy contendcd on the par, OF the
contestants that the trustee to be chargeabe with
the OF s59 $40 which he received from his brother
William G. Fargo. This claim made the state
OF facts ollows:-0n the 2d OF April, 1862
William G. Fargo who resides ut Buffalo, in this
State. and is the brother OF the de-
iendant, borrowed of the American Merchants Union
Express Company the sum OF s6i,05o payable on de-
mand, with interest," and transferred collateral 100
winona and ST Peter Railroad Conpanys bonds, OF
the par value of 81, 600 each On the 18th OF April
1869 the defendant AS trustee, assumed the loan
paid to the American Merchants Union Express Com
pany the amount thereof, receiving the collatrras
pledged therefor On the llh OF June, 1869, the trus
tee loaned 10 lillian G. Fargo oil the trust iund the
of SIS OOO with interest, ana the ID OF Octo-
ber 1872 tho agent of the loaned William g.
Fargo the OF 81 $40 his demand note, receiving
as collateral seventy shares of the American Ex
press Companys trustees certificates and the lSth
Of February, 1873 said agent OF the trustee also
loaned William G. Fargo, demand, OF the trust
cury the trustees certificates for 300
OF the American Express Company's stock and on the
9th OF March, 1873, said agent OF the trustee also
loaned to William G. Fargo on his demand note trust
funds To the amount OF s25o2 So receiving coIlat
~. of th. Exnr En,r
panys stock IN the certificates of the trustee These
ihrce last loans made by the having charge
OF the trust funds the trustee beng at the time aD
sent In Europe, and, so tar as appears, were made
without his knowledge Prior to the first dividend de-
slarcd BY the trustee William g, Fargo purchased
through his brokers New York, 367s shares OF tho
certificates OF the trustee the purchases commencing
In 1863 No unostions appear to have been had
By tho agents OF william q Fargo with the defendant
that the latter took any part In the purchases
provided any funds cither OF his own Individually
IRON to make such purchases, and the
brvker testified that he made report OF his purchases
TO Tho defendant and had no conversation with him IN
reference thereto. On this question the referee says
al disregard the positive testimony OF William
g. Fargo that these purchases were all made by him
with hts own iunds upon his own responsibility aud at
his risk and that James e. Fargo had no interest
connection with the purchase, and am unable to
trace any Of the trust moneys directly 10 those pur
chascs The nrst loan made by the American M,r
chants Union Express Company was made by n with
Its funds TO William g. Fargo. aud this loan. amply
cured assumed by the trustee and would seem To
be judcious and sale temporary Investment OF the
trust funds The second loan was made by the trustee
10 William g. Fargo on the lin OF June, 1907 and
question made that IL was not proper loan.
The three subsequent loans to William g..
Fargo of trust moneys were made during
the trustees absence IN Europe, and there ~
xestion that thes. moneys we're used by William g.
Farro for purchase Of these trust certificates At
about the time the defendant went to knrope, May
ls72 "A conversation between him and his
brother which is the nrst Intmatiop, appears by
the trst sony that the defendant trustcs) had that
he have interest VA the purchase OF these
esgtihcatcs made by wilism q. Fargo II appears
that st tins time the defendant In poor health and
sost and and wish TO Europe we're deemed
essential re-establlshment His friends urged
him To do this. he objected that he could not and
Isave behind him hts wife and family, and that his
means were such as To enable him To take them
with him. His brother, upon thus statement gcncf-
ousIy came forward and SAID In substance .'i have
ma de money purchase OF these certificates issued
b, YOU as trustee ol th. American Express Company,
Lur. he .xry