The New York herald., 1877-02-27
A CURIOUS RAILROAD SUIT.


csion OF Judge Johnson the papers are now under
consideration. The suit may we'll be called important
as the promoters seek to take possession of the La
Crosse and Milwaukee Railroad somo 200 miles long,
which they Claim Is frauduiently held by the Mlwau-
kee and ST. Paul Railroad Company. In case The
plaintiffs are successful they viii also for all the
earnings OF the road during tho eighteen years
The attorney OF that company recently exception
TO statement in the money article Of the HERALD
forwarded the following communication, which sets
forth the views o! the company
DEFENDASrs' SIDE
CHICAGO, MILWAUKEE AND ST., PAUL RALwAYl
COMPANY. No. IS wilLrxM STREET,
Nkw York, Feb ~, 1877.
To THE EDITOR OF THE HERALD
The attention vi the officers OF the Chicago Milwau-
keo and ST Paul Railway Company has been called TO
paragraph IN your money article OF the 9tn INST.
which seems to be founded upon part and
yourself OF the Information which they request me 10
give you for the purpose OF making The necessary
The SUIT referred to begun the Supreme Court
OF New YORK IN 1865 when Judge Barnard granted, ex
pd'te an order appointing James NJ Sweeney receiver
ol the Milwaukee ana ST Paul property The
ship was soon vacated ana the Judge who granted II
was for this, among other things npeached anc re-.
moved from office BY the action OF the ~ Paul
Company tho sun transferred TO the United STATES
Circuit Court, and there Il slept until 1874 when It
was revived by Mr.. Barnes and Mr. Bright rhcy
made motion in 1875 before Judge Blachlord for Nh
Injunction, which Judge Blachord granted and
they have recently made n lotion before Judge John
son for an injunction, which has not bccn granted
me iacts oil the case are SIMPLY these The Mwau-
koe and 81 Paul Railway Company acquired the road
from Milwaukee to Lacrosse, about two hundred miles,
undor the foreclosure OF mortgages or encumbranccs
created by The old La Crosse ana Milwaukee Railroad
Company prior to tho year 1855 Before these lore
closures were had and IN 1885, tho La Crosse Company
made mortgage TO William Barnes purporIng TO be
for $1,000 oOo Bcforcthc bringing OF the foreclosure
suits under which the ST. Paul Railway Company
bought the proccrty Mr. Barnes made sale under
mortgage TO u corporation called the Milwaukee and
Minnesota Railroad Company, TO which most OF the
bonds issued under the Barnes mortgage trans
ferrcd and that company Tor some timc In possess
sion oi the Eastern Division of the La Crosse Railroad
but was inaly compelled TO give up under The deer
in forcclosure under which the 81. Paul Rail
way Company became the purchaser Subsc-
! quently, IN April, 1865. suit brought by
judgment creditors of the old La Crosse Milwaukee
Company, VINO recovered judgments after the making
OF the Barnes mortgage, tho Circuit Court OF the
| United States Tor the district OF Wisconsin decided
that tho Barnes mortgage, although issued for
| $2000.000, was IN lact good Tor only sl5O 900 or
500 900, aud that ms against judgment creditors Mr.
Barnes sale OF the property to the Milwaukee and
Minnesota Company was not good, anu thcreupon AIr.
Barnes, in the SUIT now pending and referred TO
your money article claims that owithstauling his
sale TO tho Milwaukee and Minnesota Railroad Com
pany, and Notwithstanding the Milwaukee aud Mime
sofa Railroad Company mad been a party 20 tho fore
closure suits under winch tho Milwaukee and ST. Paul
| Railway Company became the purchaser, yet he
now owns tho mortgage OF lsos ard has
paying OIL the PRIOR encumbrances which
are held by the Milwaukee and ST. Paul Railway Com
pany. But tho ST. Paul Company confidently asserts
that Mr. Barnes mortgage Is good tor nothing all
| the parties holding II at tho time having been
which the Milwaukee and ST Paul bought, and de-
cree OF the Circuit Court OF the United States Wis
| consIn has established that even originally 1t was
fraudulent tho cxcu, Of about 81 500 900; in anv
event he VIII have to pay tho Milwaukee and St Paul
Company the cost OF tho property OF the foreclos
ure sales, which the aiIdavs and papers produced
the motion state have boon about S.
above all the rcceipls OF the Milwaukee and ST. Paul
Company from the property since its purchase.
II rs not considered by the officers the pany
that salc of the 200 miles IS, OO0O 900 would be
very serious injury. but they have no expectation OF
making any sale, and I. * somewhat significant
to them that whenever the suit referred started In
court It Is always used prccxt for an attack on
the stock of the company Tor stock obbng purposes
There rs nothing IN the moton now pending which in
Railroad Company ITS stock holders; and alter
peated and careful examinations OF the whole matter
have always IN concurrence .th the cuunseI of tho
ST. Paul Company IN Wisconsin (who have had charge
| OF It's affairs from 1859 DOWN. advised tho company
that its interests are IN no way endangered by tho
pcndency ot tho suit referred to.
BY making these corrections you will greatly oblige
the officers oil the company AS we'll as yours very re-
! spectluily, +. n. BANGS,
OF counsel for tho NJ Miwaukce and ST. Paul Company.
In order to obtain the other view of the qucs, ion
HERALD reporter was sent out with the above state
| Inent to obtain what information he could the
subject. He showed the document to prominent
Wall street operator, and the latter gentleman said =:
'If you want to get at the bottom facts in that
you had better ex-senator Matt Carpenter, he
has spent considerable time working up, and feels
perfectly confident that the Milwaukee and ST. Paul
Company will DO forced relinquish their claim to
the La Crosse and Milwaukee Railroad. or about 200
miles of the valuable portion OF their property
The HERALD reporter was finally directed to q well
known lawyer and the latter gentleman, after gancinf
over the above statement of the attorney ior tho
company, put tho question in another light as fol-
lows:-
THE PLAINTIFFS ARGumANr
This document by the attorney Of the Milwaukee
and ST. Paul, purporting TO be letter TO tho HERALD
labors with conspicuous ingenuity TO beiog people
| uIIv
very simple ono The ST. Paul company has title
whatever 20 the road formerly owned by the La
Crosse and Milwaukee, as Is admitted, unless the lore.
closure Of the Barnes mortgage OF 1855 cxnguished
all tile OF the La Crosse and Milwaukee It's property.
The Milwaukee and 81 Paul. ia all Its peadines asserts
that this foreclosure shuts out the old La Crosse
Milwaukee Company altogether. And yet the Supreme
validity Of that very SALE has declared M,nneso1s
Company vs. James, Wall, 752) that. ''lt needs
authorities 10 show that such sale cannot be upheld
without sanctionng the grosscst fraud and Injustice
to the La Crosse and Milwaukee Company, tho mort
gagor and It's creditors. This deceptive notice was
calculated to destroy all competition among blddcrs,
and intended to exclude from the purchase every
except those engaged in the pcpctration OF the fraud
But by virtue OF this foreclosure and subsequent
proceedings founded upon the theory that foro
closure was valid the Milwaukee and ST. Paul
holds whaicver title II has to the most valuable part OF
It's line SO much for the cunning legal dodgcs BY
which the attorney ofhe company seeks TO resist tho
SUITS threatening IT'S Title For, being established
It's property by thus foreclosure held by the Supreme
Court to be fraud certain facts which the attorney
circular takes pains not to notice destroy his
completely
| Frst-The La Crosse l. Milwaukee Company was
never served with notice in the subsequent proceedings
by which the Milwaukee and ST. Paul got possession OF
its property.
Second-Tho proceedings by which that possession
was obtained were based upon judgments which had
once been paid by the agents OF tho company, and
which, by fraud and collision with officers OF the
pany nevertheless enforced against It's property
four years aterward.
Tho attorney suggests that ''it would not bo a
very serious injury to the Milwaukee and ST. Paul
to be deprived OF the property dispute. But tho
200 miles OF road covered by these suits are the
most valuable part Of ITS entire iIne and II II never
legally owned that road II W Ill be compelled account
To the real owners for earnings during eighteen years
amounting to many millions. II Is as II man wcrc
sued for his belly and by way OF defence answered that
he did not much care whether should be cut
! not
The circular represents that Judge Blatchford and
Judge johnson have both refused grant the oton
OF those who sslil the title OF the Milwaukee and