Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1880-06-30
STRUGGLE FOR A RAILROAD.

Some of the Original Bondholders of the
st. Paul & Pacific Want the Road Sold
Again Judge Miller Decides the Present
Owners in Rightful Possession.
The following is the full text of Justice
Miller's decision, the announcement of
which appeared in yesterdays GLOBE:
The case of Wetmore ct al. vs.. The st. Paul
& Pacific railroad company, which has been
very fully argued before US, and which we have
taken into consideration as thoroughly as We
are able at this term, is one of very great inn
portance considering the sum involved in the
controversy. The purpose of the petition is no
less than to set aside the sale of railroad
which is perhaps worth $40 600, 900, or more,
road which has been re. organized since the pur-
chase with new set of directors, q new set of
stockholders, very largely, and above all, new
set of bondholders. The road was purchased
under decree of this court, the purchase was
confirmed, and new company organized,
which has been in possession of the road over
q year, and has issued, as say, some $4,000
900 or $15, 0000 COO of new bonds held
all over the world; and now original bondhold-
ers in the old company representing million
proceedings be set aside and that we proceed
de noOo to sell the road. These petitioners were
not parties to that suit in the sense In which
they now seek to be made parties. The first
thing that they ask in the present proceeding
is that they may be made parties. Ii they
were parties at all as in some sense they were
and represented by their trustees in the pro-
ceedings of foreclosure-they were not parties
in such sense as would enable
them to control the litigation
or come forward now as parties originally en-
gagged in the litigation; and they, therefore,
seek, very properly, if they are to have any re-
lief in this proceeding to be made parties in
the first instance. The first question that pre-
sents itself is, whether they can be made par
ties?
Taking all to be true that they say in their
petition, the case stands that during the pro-
ceedings of foreclosure these petitioners
ought to have been represented, and were
legally represented by the trustees plaintiffs
in the foreclosure suit. The foreclosure was
manfully resisted by the corporation for three
or four years. 1t was obvious that the mort
gage ought to be foreclosed and the road sold,
as the interest had not been paid for years. The
present applicants state that the road at that
time was worth say $4,000, 000 Fifteen million
dollars of bonds were leins upon il, with what
ever other claims there may have been
against it, besides the interest coupons; 30 that
the road had bonded debt of twice the amount
| these petitioners say it was then worth. 1t was
therefore obvious that it was just and right to
foreclose the mortgage and sell the road for the
payment of those debts.
| During this litigation it became apparent to
| the court that this road had to be sold. They
| finally entered decree for the sale. 1t has
| been said in argument that that was q consent,
and therefore was something of an &c p0Yet pro-
ceeding, but the record does not show any such
I.4a 80 hat Ttchr oil orlxY hot
the parties were present, and although there is,
in some parts of the record, a preliminary
| statement that such and such parties were pres
| emit in court, and consented to the decree, OF
| submitted decree which they desired to have
entered, the record goes on further to state that
the court did not enter that decree, bat that it
took the paper and entered decree upon its
own consideration. 1t was therefore decree
| on full consideration by the court-one which
met its approval upon an examination Of the
merits, and it ordered the sale. The sale was
| had. part of the original bondholders were
under q special organization according to the
laws of Minnesota, purchasers. That did not
settle the controversy, or the rights OF this par
ties absolutely. The master who made that
sale, was required to report it into court. He
did report il, and the sale was confirmed.
Now, that sale being confirmed, a deed made
| by the master, property turned over and de-
| livered to the purchasers. those purchasers hav-
| ing reorganized under another corporate name,
doubtless great deal of the stock that they
held passed into the hands of other men-cer-
tainlY the bonds that they issued upon the
strength of that new organization to the extent
of $9, QUO, 900, having passed into the hands OF
other men-these parties, now for the
first time, come into this court and
ask that they may be per-
mitted to upset all this transaction to do thai
which they did not seek in the five years OF
litigation, namely, to be made parties to this
suit, and then to be treated in the double as
poet of persons who are parties to the suit and
| having all the rights of parties from the be-
ginning, and also in the aspect of persons who
were not parties to the suit, and whose rights
| have not been foreciosed.
No authority is shown, no precedent is shown
do not believe any can be shown for such pro
| ceeding. 1t is so anomalous, unusual, SO
much out of the way, that think it require:
express authority in the way of president Oh
statute to show. that such thing as that can b:
done.
The counsel, apparently. seeing this difficult
| ty, have made an order accompanying the con
| frmation proceedings. the foundation, to
large extent, of this application. That is sin
gle sentence at The end Of the long order con
corning the conf nation. The frat part Of
that confirmation is. THAT the said report
| the said foreclosure sale, and all proceeding
| thereon, be and the same are hereby in al
things confirmed There are several orders
relating to the distribution oil
the proceeds, and what the
| master should do with the money, and so on,
and then it winds up: ''This order is made by
and with the consent and at the request of the
| trustees, the compliments and with the con-
sent of the parties defendants shown above,
and the right to make any further order is re-
served"
| The argument in favor of opening this case
by these petitioners who are not parties is that
we will permit them to be made parties. That
this order is sufficient to open up everything.
First, that it is sufficient to go back and open
up the original decree, but if not, that it is
| certainly sufficient to allow the court, upon
such representations as they here make, to set
aside the order of confirmation, then to set
aside the sales, and then to order a resale or
take such steps as may be just to the parties.
The language of that order differs bat little
from the ordinary language made use of in de-
crees to the effect ''that further orders may be
made upon a footing of this Decree and 1
cannot believe that when that it was made it
was in the contemplation of the court
who was confirming this sale
that the further orders there spoken
of was such an order as would set aside the
sale. That WAS the thing they were passing
upon. Who has ever heard of decree which
disposes finally of millions of property de-
cree under which the purchasers were to take
possession and get a final deed, and under
which they would enter upon the management
of the property and create new rights by bonds
and all that thing-Who ever supposed that