The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-12-22
THE ERIE RAILWAY
Legal Contest Over the Examination
of the Books.
EFFORT TO REMOVE Mr.. JEWETT,
A Curious Cross Litigation, with Millions
at Stake.


the argument of motion TO vaca'e an order recentiy
granted by judge Davis In SUIT brought by Mr. Isaac
S. Fowler directing that Mr. Hugh Jewett, receiver
OF tho road, allow him TO examine the books aud
papers OF tic company and show cause why he should
be removed such receiver and torhc reading OF
afudavits on a motion for the discontin OF the
McHenry suit recently Instituted 10 Monroe county.
INSPECTION OF
GU the frst motion Mr.. Laroque, VINO appeared on
behalf Of tho Erie Railway Company and Mr. Jewctt,
read the petition upon which Judge DAVIS granted
his order. ana then INSISTED that the order was
evidently granted unaer mlsapprehcnsion on
the part OF Judge Davis that such order
came within the provisions OF section AZ OF the
Revised statutes Hc showed that this section was an
Interpolation ana, even allowing that 1t was not urged
that It's provisions only applied 10 receivers Of
moncycd corporators or those going into dssolu
ton. lie read length all tho statutes applicable TO
the and claimed that II clearly established
that the order was which should be promptly
vacated lie alluded also TO The fact that the petit
toner only held shares of tho stock Of tho
company ana lie thought that Il stakeholder 20 little
Interested pecunarIy should not be allowed to inter-
ferc with OF the company to the extent OF
oycrhauling ut will all is books and papers.
Mr. Dunnng, who represented the petitioner, con-
tended that 1t was nota matter oil small or large
number Of shares, but simple question OF right or
wrong. lie argued that II everything all right as
TO tho management OF the pany there could be no
objection allowing any stakeholder to exnm no us
books at any time. He intmated that the oppos-
tlon 10 the order showld that everything not all
right In this connection he alluded TO the complaint
made by the Attorney General against Mr.. Jewctt,
when president OF the road charging HIM with
fraud III tho management OF The compauy's affairs,
and then TO amended complaint retracting these
charges and asking appointment OF M. Jcwct as
receiver OF tie company. He pronounced the whole
thing altogether most extraordinary proceeding.
Mr. Laroque charged Mr. Dunnng with making
rather grave accusations against Mr. Jewett, which he
thought uncaled for on the present motion Mr.
Cunning denied any intention to mpugn the re-
cover, and insisted that all he wanted the right
TO inspect the books The receiver an officer Of
the Court and he thought that Judge Davis had done
right granting the preliminary order, and he felt
confident that the order would pc sustained, as no
would DO harmed by It.
Judge Brady took the papers, reserving decision
the motion.
THE TWO GREAT CROSS SUITS
1t took till recess to get through the argument OF
the above motion. This was only slight sklrmish
that followed alter recess. Fer some time there has
been pending IN the Supreme Court two SUITS one
being that brought by tue Farmers Loan and Trust
Company, trustee against james McHenry, John IL.
Brown, Charles Frcaric Evans and tho Eric Railway
Company, and the other SUIT brought by James Me-
Henry, Jonn H. Brown and Charles Fredric Evans
against the Erie Railway Company, the Farmers
Loan and Trust Company ana Others. The matter
came before the Court yesterday on motion IN the
former suit to RESTRAIN tho prosecution OF Tho
SUIT recently instituted In Monroe county The character
the counter ntgaons aud the large interests in.
VOWED in the final result, might DO supposed has
induced the retaining OF large array OF counsel
both sides. Messrs. Turner Lee < Mcclure William
N. Evarts. ex-Judsc Comstock, Joseph Laroque and
William Macisrlanu appeared counsel TOR Tho Far
mcrs> Loan and Trust Company tue Erie Railway
Lompany and Reconstruction trustees. the opposing
counsel are Messrs. Emmett. Burnett 4 Hammond,
A. J. vanderpoel AshocI Green, General Daniel f.
sicklcs aad Henry Arden II took tl nearly halipast
i've O'Clock TO read the papers.
COMPLAINT or THE COMPANY.
Mr. Turner began reading the papers his side
with the complaint In TINS complaint recitcs
In detail the history OF The road from hrst incep
III 1882. 1t then recltes the history Of various
mortgages upon the property Oh the road, showing
That there now outstanding mortgages aggregntng
s2o,ooo, ooo inc particular subject OF complaint,
however, Is the mortgage bearing date September l.
1870, on which It Is now claimed there is due
SIC, o56,OCo. ~ is unnecessary TO so through this
complaint IN all It's details, the man features hav-
Ing already been published. Aftor explaining
all about the SUIT brought by the People by
ex Attorney General Pratt, how when May, 1876
the financial affairs OF the corporation discovered
by the presdent and Board oil Directors DC
uusatisfc condition rs to render IL necessary
for the protection OF the interests well stock
holders OF the company as OF the holders Of Its mort
gage bonds that receiver should be appointed: now
q receiver appoiD ted ana the road has been
managed since The rest oil the complaint
IS made up mainly Of denias Of allega-
II Is denied that portion OF the holders OF ponos
under The said first Consolidated mortgage, anu por-
soliiaed mortgage. have combined with the said Mr.
Jcwet TO coerce the residue Of the holders Of
bonds INTO an assent 10 scheme o! rcorgan lzatou
and 1t alleges that the Farmers Loan trust
pany has always faithfully Dcrorned It's DUTY as
trustee In conclus.on tue Court Us 10 permanently
enjoin McHcnry, Brown and Evans from prosecuting
It's suit IN Monroe county
mgwrr's ArfIpAviTs
Various allaavIls READ by AIR. Hewitt. He
stated that since the default oil company 10 the
payment ., interest on It's bonus secured by the first
so-cailed consolidated mortgage, no demand has
been made Tor the pay any OF the
coupons except OF certain coupons ordered by tue
Court TO he PAID; that McHenry and Brown as he is
informed, live London, and have been mutu-
ally engaged In speculative enieririses especially
CONNECTION with the Atlantic aud Great
Western Rulrcai Company; Evans also
livte IN London and is man OF repute siuce
The early part OF last year he has been prosecuting
London action against McHenry recover over
S5O00O proceeds o the second consolidated bonds
OF tue company frauduiently appropriated TO his
own use; that the vcritcation OF the complaint Is
mere prctence, the nnual election the
company there 55, 900 Votes cast winch H. sos
were cast Tor four parties members Of the present
Board anu about mae thousand 10 addition scattoriog
ana that OF the whole amount lowest vote
any one ncinocr Of the Board thcn EXISTING, which
has substantially had charge vi cor,pany Tor tno
Inst three years, was SOL, U2 and that according the
report Of The trustees made the l2h OF last month,
assent 10 tue scheme oi Reorganization, the OF
BOND anu stock hodcrs, had been lied wtn the
tees TO the following amounts respectively Out OF
sld6ooOuO the entire amount oil bonds Issued and
secured Ny the irst OF tho Ere
Railway COMPANY the sum OF Slj, 2Jl 900; out OF
S24 100 0O0 tue uonIs ISSUED ana Sc
cured ny tue second cousoluatcd mortgage 81 tho
sEric Halfway the sum or S7, 0ol 600; 7se 900
shares The entire issue OF tne common stock Of Tho
Ere Railway Company, 32G, lIo shares; out Of
635os shares The entire issue OF the preferred stock
Of said Erie Railway Company, "a, 3J3 shares
Among the ntiuayiis read tlIusc Vi MIR Turner
and eA Attorney Gencrai Frat but continuing adj
uItiouai potIts of SPECIAL interest
OTHER sIps STORY
MIR. Green rcal thc opp0sng Pup -r4 FirsL ID order
was read very long all iayit u J,mcs ReuS he
1cgins with rccitng tho facts connected with Inc
bringing 81 the suit W the people referred ABOVE
lie stacs that u was alleged IA The complaint
Mr.. Jcwett, alter licing e.ccsed President uuac n
contract with The company 70 serve pres dent
iof ten Years az an ahiui salary ~ 1900; hat IL
i1rd 10 pay bin 10, 90 ADVANCE thut th,
procuring OF the amended complaint lhroIgu col
tusion and taud; tnat Jcwett has made rebates 10
shippers 81 reShts up 10 April, 1874 the sum OF
s1I2, 900 ~ ~ cash thdt his regal expenses Up that
date amounted TO 100 GIG 30; tnat tnat date he
such receiver, has paid clerks, employees ana
laDorcrs Sl4+20,V'2 %. beng twenty per more
than such services ~efc worth; that the pany,
prudeLty and bVucsty managed, could payluierusI
on an us mort gage cbiigatiOn; That lawyer PAD
$1,000 10 20 10 LonGon to prosecute scnple ol re.
lf4t t.a