The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-04-12
RAILWAY TITLES DISPUTED.
4 NEW CHtPTER IN THE MEMPHIS IND
Ell PISO MEMS SCHEMES.
| How the BondhoIdcr- were Dcceived-The
Umlnwr,i Transfer Of Some chnrtere"
| Right. from One Company 90 Another,

Rights from One company y" fs""h"'''
WASHINGTON. April 1.-THE Judiciary
Committee OF the House heard this morning
the opening argument Of Douglass Campbell OF
New York. counsel for the French bondholders
in the matter OF the title OF the Texas and "a
cinc to the rights and franchises Of the Memphis
and FL paso Railroad. Mr.. Campbell's argument
told ir greater detail and east in the form OF an
extremely cogent loyal argument tho technical
and legal devices by which the Texas and Pacific
obtained. through John c. Gray. receiver OF the
Memphis and III Paeo. spurious title to tho
chartered rights Of thnt road-a title obtniNcd
by sacrificing the rights oi the bondholdors
under plea OF protecting them and spunn-
dering the assets OF n corportion which
II is urged still has valid existence.
The story has been told before in THE sun 1t
hGs never before taken the shape OF an author
| lied plea from the accredited attorney Of tho
| parties wronged Nor has II before been made
| when searching investigation into all the cir
| cumstanccs Of the case gave importance to the
| exposure 1t was evident that the recital to-day
made a deep impression on the committee.
| Gen. Butler gave the argument his c0scst at
! tention and interrupted II with an occasional
question Frye was equally impressed. and
Knott appears to he fully persuaded Of the ne
ccssity Of pressing the inquiry.
Gov. John c. Brown appeared for the Texas
and Pacific and Matthew Carpenter was present
rs counsel for French bondholdcrs. Campbclfs
argument was as follows:
The Texas and Pacific Company claim to own
q road built over two distinct lines uniting at
Fort Worth. The title to one. beginning at
Marshall aud running due west. is derived
from the South Pacific Railroad that to the
| other, also beginning ut Marshall. passing
thence by Tcxarkana to Fort Worth and COM
,t~.Ia q n
the Texas and Pacific. is built save n few miles.
on the surveys and charter cf the Memphis, IL
| Paso and Pacific Railroad Company West Of
Fort Worth is projected road Is on the sur
| veys and line OF tho charter OF the
same company. 1t is In regard To this title that
| appear. founded on Conveyance Of Gray; re-
| Gray. We claim Gray was not receiver; that his
appointment was void and that tho f9reclosureS
| werc void that the Memphis and III Paso If still
In existence. with it, mortgages ana in
| dchtedncss. n prior claim on lis property now
| company socks 20 mortgage 10 the United states.
Independent Of these legal propositions Il
broader equity and justice should forbid the
Government extending aid to Texas and Palfi,
until II has done justice TO innocent holders OF
obligations against the corporation whose prop
erty II wrongfully holds. . 49,
Fremonts connection with Memphis and FL
Paso. its original orgnnlzai on ma the urellm-
way Tor his rcceivcrship. Inc suit brought in
Rochester on mortgage never delivered. and
recorded without being indeN"l. was related.
and then the argument was continued
Fictitious debts having been prepared. the
censeut Of the trustees obtained by decritiul
| showing OF the cumpnnys condition, com
planning stockholder Manufactured Tor the oc-
casion and Gray appointed receiver upon doc
had now everything prepared for his final
movement hut court Here he MT an insu,,
tSosa ts9gI eIaimins tSronTh him null. No writ for
the dissolution OF the Memphls-El Paso Com
c%i1srs cis appoin@en,. G TIM Could be- GroasIt except
in state or United States Courts OF Texas.
An action there, must defeat the end pro-
| posed Two-thirds of the compnnys directors
and its President. krnJamin ii. Epperson' were
Texans. knew is anairsi Gnd would oppose
institute suit and letters oi Introduction to JUS
tice Bradley Were -obtained. This. was aban-
duncd; In July. 1870 bill. unvvrliirl aud IN
signed by any solicitor WAS presented To- uslce
Bradley AT Newark asking for receivcr-A bill
ern District OF Texas Nothing else showed II
was a Texas suit. ACCOMPANYING was let.
ter written by Gray, and copied, and signed
10y Fremont To Edward Gilbert OF Now York d-
| recting him 10 appear, accept service. waive all
objections. and retommehd Gray rs receiver.
| Fremont has since disowned this letter. jus
| tee Bradley has since said in AN opinion: Inc
Justice who appointed the receiver declined TO
been personally notified" Jusucc Bradley was
deeeiyel Gen. Fremont was not President.
and had no authority TO accept service or
wnive hearing. Fremont had pretended to be
President f9r few months by virtue on meet;
ig N " CIV unIer Xan' law eoni nGi be-
changed except 10y stockholders meeting in
Texas, such meeting could not be held outside
Of Texas. The fact that Fremont was not
, President was used by Gray to defeat a suit
brought, against the, company in New, York.
authority To waive a hearing in feXus. The
law s perfectly well settled that United States
| Circuit Courts cannot obtain jurisdiction OF n
corporation except 10y service within the dis
| trict in which the corporation ls chartered.
| Not only was Gilbert's appearance void. and the
resulting order as well But as he was not So
licitor in Texas, he could not waive service ny
appeaT,nS Ths case 9rislss ~ ,s al 9yer W
required in beginning suit IN equity before Il
On an unsigned. unvorned bill Of complaint
never served and never seen by an officer of the
company. never filed with the Clerk upon which
no subpdnn had issued and no return had been
made, the order was made confisrating all tht
property OF TINS corporation ana turning II
In January. 1911. Gray applied for perms.
sion TO sell TO the southern TranscOnineniA
halroad Company or olherTise' I.,si9ly
; court gain power under elastic words ol
Otherwise" The contract never was carried
out, II was now proposed TO have Texas
. and Pacific take franchises and lands
and pay bondhoders small portion of lands
Gray then, went to France and issued circulars
matter. Four hiths Of the bondholders Were
deceived by him, and consented. The, other
| fifth. better advised. did not consent. and have
| not consented. Returning, Gray set ont tt
. wipe out all liens on the road. This. in May
' a new defect in the title OF Texas and Pacific
|
set aside eighteen months before. Tn,
} | trustees OF another gave guarded assent
, which wns disrcgarded. Suits in fore
, closure were begun by Gray's lawyers
! on all four. and the same lawyers prepared AN
| swers for Mcmphls and III l'aso for the trustees
and for Gray. receiver. On the 3Oth OF April. 1872
s | all these papers were presented to the Circul
5 | Judge OF Western TeXas-Dayenport. Grayi
! | lawyer having employed ono TeAas solicitor t
y sign one set aud another TO sign the answers
Decree Of foreclosure and salo wns ontere,
5 tho next day. OF the entry OF these de
4 | crees and proposed sale not u word wa:
5 said to the trust SEES After advertisements in OBJ
p scure Texas papers. at an Obscure village. tn,
% sale was made. doeds were executed. and unde
. these deeds Gray conveyed to Texas aud Pacific
v Three months nlterwnrd. discovering that on,
= | OF the mortgages had been SIT aside. Gray oh
tanned an order restoring the mortgage nnl
pro tune. n proceeding only possible where TIT
defect is something formal and techni
= could tho other mortgages nlono Civ
l. | title. The presence Of tins affected sal'
:. under them. the foreclosures of the other mort
| gnges. land grant aud construction. were void
. | To their foreclosure the mortgAgor must lee
~ party. Tint morigagor 20 W.T.; Memphis an'
Is Ill Paso Company. still IL existing. mover WIZ
= party to the foreclosure and whs never served
y That IL Is still in eAlbt nee has been eNprehsl
| docdul 10y tho Supreme Court in holding tina