The Cheyenne daily leader. [volume] (Cheyenne, Wyo.) 1870-1884, 1881-04-14
AZ InroRrAsr DEcIsIos.
1hes. wsrdsII W. the uslea Faein
lfailFsAd Company.


In the u. s. supreme court, last
Monday, q decision n rendered in the
ase Of Thos. HsEdell, appellant. Ys.
the Union Pacific railway company, ct
al, an appeal from the circuit court Of
the United States for the district of
Nebraska On the 10th of July, 1868,
Oliver Ames, president Of the Union
Pacific railway company, acting by
direction of the executive committee
of the board of directors, entered into
q contract with Wardell and others,
which latter were empowered to oc-
cupy and work up, on extremely favor
able terms, the coal lands belonging to
the company along the whole line of
the company's road Shortly there
after a stock company under the name
of the Wyoming coal and mining COM
pany, was organized, with Wardell and
a number Of the directors of the Union
Pacific as its leading stockholders. To
this corporation Wardell transferred
his contract, without consideration, on
the 18th of March. In IA the officers
and agents of the railroad company, by
order Of the United States directors,
seized the mines. bonds, papers and
personal property of the mining CON-
pany, and have held and used them
ever since.
Wardall auao noIor the o1nfraof for
damages resulting from such seizure
and attempted abIogation of the con-
tract. The railroad company pleads as
its main defense that the contract was
void on account of fraud; that it was
executed for the company by the execu-
tive committee of its board of directors,
the majority of whom, by previous
agreement, were to be equally inter-
ested in it; that for that reason its
terms were made SO favorable to the
contractors and so unfavorable to the
railroad company as to enable the con
tractors to make very large gains at the
railroad company's expense, and that
the organization OF the Wyoming coal
and mining company was a mere device
to enable those directors to participate
in the profuse contract, which, as the
agents of the railroad company, they
had executed, and which, as contrac-
tors, they proposed to make money out
of. The railroad company claims that
the utterly illegal and indefenslble char
acter of this contract made it void. 1t
was a scheme to enable the directors,
who authorized it, to divide among
themselves and the contractors large
sums of money which should have
been saved to the railroad. All ar
rangements by directors of railroad
companies by which a new company is
formed as an auxiliary to the original
one, with the understanding that the
directors Of the original company, or
some of them, shall take stock in it,
and then that valuable contracts should
be given it. in the profits of which the
directors, as stockholders of the new
company, shall share, are so many I'M
lawful schemes TO enrich their promot-
ers at the expense of the stockholders
and creditors of the original company,
and they will be condemned whenever
they are brought before the courts for
consideration. The complainant, War
dell, a derive no benefit from a con-
tract tainted as this is with fraud, or
sustain any claim against the railroad
company for its reputation.
The decree of the court below was
affirmed with costs.