Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-08-01
PLACERVILLg RAILROAD.
FOURTEEN YEARS SUIT DECIDED AT
LAST.
Robinson VS.. Placerville and Sacramento
Valley Railroad Company-The
Decision in Full

Following is the opinion in full delivered
by Judge Hunt on the 2oth instantln the case
which has been in litigation for 50 many Years,
known as Robinson VS.. Placerville and Sac
ramento Railroad Company:
The complaint herein was filed October is. 1867.
IL AYERS the incorporation OF the Placeryille and
Sacramento Railroad Company and the amount Of
its capital stock : that on the 18th OF March, 1854
SAID company contracted certain liabilities for rail
road iron used in constructing its road and in con.
sderatiou thereof isused its bonds therefor in the
sum Of 81 coo EACH with interest at the rate OF 10
per cent. per annum. which said bonds were secured
by mortgage upon the corporation property fran.
ehses and future income OF said company That
said trust mortgage was executed to Daniorth n
Barney and Louis McLane as trustees. That said
plaintiff is now the holder and owner of 100 thereof
with the coupons attached. That the company has
failed to pay said bonds the interest I'll areon
OF said first mortgage bonds, executed mortgage
10 Danforth n. Barney and Louis McLane TO secure
the payment of the sum of $780, 900 due to said COM
pany by Wells, Fargo & Co.
The complaint further alleges that McLaue and
Barney have abandoned their trust and have con-
spred with others to defeat the rights of plaintiff in
the prem ses and that they declined to take pos.
session occupy said railroad or TO use any means
to effectuate the purposes of the trust wherewith
they were clothed Wherefore, the plaintiff prays
tina. said trustees may be removed, and that they
be compelled to assign said mortgages to such per-
may be selected their successors, and that
other trustees be appointed in their place.
First. The issue having been duly Joined in said
| action, the dispositions of large number of wit
nesses were taken before Notary Public, the
taking OF said dispositions extending from some
time in the year 1873 until October, 1915.
1t was stipulated by the parties to this action that
the dispositions Of said witnesses were duly and
properly taken, and th9t said depositions or either
of them may be read by either party upon any
motion or hearing or trial of said &C ion"
Upon the trial of this action before me, counsel
for the plaintiff claimed that they had the right to
interpose various objections to questions pro-
pounded to various of the witnesses in those depo-
stous and to the Of the witnesses thereto,
aud that they had the right to strike out certain
portions Of said answer being either not respon-
sive, or irrelevant as incompetent testimony
1t seems to the latter objection il well taken.
Upon the taking of the dispositions in question, a
witness for the plaintiff and examined
under such stipulation. The defendants witnesses
were also cross-examined at length by defendants
counsel, and if either the questions propounded,
the answers made 10 the witnesses on the occasion
of the taking OF these dispositions could be OBJ
Jected to, 1t would follow that much of the matter
testified TO by L. L. Robinson upon his examination
and in RESPONSE to questions propounded to him by
the plaintiffs counsel would be incompetent and r-
relevant.
1t seems, however, to have been the intention of
parties to have allowed said testimony pro and con
to be read upon the trial Of the action for what 1t
might be worth Certainly the stipulation that uch
dispositions may be read upon the trial OF the action
admits of such construction
In view of the fact that several years have elapsed
since the taking Of these dispositions, end the pos
sibty OF the death absence of said Witnesses it
would be most unjust to hold that the plaintiff can
now, after long lapse of time, come in upon the
trial of the action and for the first time object either
to the question asked the witnesses or to their re-
plies made to such questions.
In the determination of this case, therefore, have
concluded sustain the defendants position in this
matter, and upon this ground have dSregarded, or
rather have overrued, the various objections made
in the trial OF this action when said dispositions were
read to the questions propounded, and the answers
made by the said witnesses in the said deposition
Second AS to the merits of the action. The
complaint herein is in the nature of bill in equity
wherein the plaintiff substantially alleges that he is
the holder OF 40 bonds and coupons of this COM
pany, which bonds were secured by mortgage
properly executed, and that Wells, Fargo & Co.
were the holders OF said mortgage executed to
tain trustees in their favor that the profits OF the
road were being applied to the payment of the sec
ond mortgage; but the trustees under the first
mortgage were derelict in their duty, and, there
FORE should be removed and the plaintiff prays for
their removal and the appointment of others to dis
charge the dutie3 devolying upon them under the
first mortgage.
Since the commencement of the suit the defend
ant, Barney, has died, and Louis McLane became
the sole surviving trustee of this trust.
The defense in the action is that the first mort
gage not executed in accordance with the law,
in that there was not unanimous concurrence OF
the Directors of the corporation in the resolution
for its execution. This objection having been dis
posed of by me, upon the trial. will not be further
noticed
The answer, in addition, however, to taking
issue upon the due execution OF the mortgage
alleges payment thereof and satisfaction OF the
bonds, and upon this defense the controversy
herein depends.
The question, therefore, to be considered is, were
the bonds in question claimed to be owned by the
plaintiff ever paid and satisfied
ircf /
to secure the payment of $50 bonds at 81 900 each
The plaintiff herein claims to own 120 OF these
bonds and upon the trial claimed TO represent l4o
shares. The amount due upon these bonds the
face value and interest, would exceed $500 Goo.
The corporation seems never to have issued the
entire number Of those bonds, but only about 800
thereof $50 OF each were issued in payment OF iron
which is claimed to have bee purchased by the
company of the plaintiff These were called CondS
upon their face but subsequently, by stipulation
Of the parties, converted into currency bonds
The history OF the road exhibits an extent and
amount OF litigation concerning 1t which Is remark
able. At It's very inception it was harassed with
suits, and during almost the entire period of its
existence litigation of the most important character
was pending in relation to it.
1t seems that the company ITSELF after its organ
izaton, became insovent, and it apparent that
large loss would be entailed upon the creditors OF
the company and parties to the bonds. Among the
principal creditors of the company were Wells,
Fargo & Co., the Indebtedness to whom amounted
to Sl75, 900, and Robinson who claimed to own 40
of the mortgage bonds.
This claim was resisted upon the part of the de-
PENDANTS, and it claimed by them that in view
of the above named stipulation, the plaintiff was
precluded from interposing any objections, either
TO the form, matter substance OF questions pro-
pounded or to the answers of the witnesses thereto
1t seems that Welis, Fargo & Co. obtained pos
session of the road under their mortgage through
their trustee, McLane. The evidence sbundantly
shows that Lester L. Robinson and the trustees OF
Wells Fargo 4 Co. made at various times efforts to
he the Indaltpd
ness and and to effect settlements with its creditors
These attempts took various shapes, and were car
ried on in various ways but they seemed to have
eliminated in the execution OF what will term the
Hartley agreement, exhibit +, which was executed
September 81, 1867, between Lester L. Robinson of
the one part, ami Wells Fargo & Co. of the other.
This agreement is substantially as follows; 1t re-
cited that the first mortgage bonds hereinbefore
mentioned to be deposited by the holders
thereof in escrow with Davis, iplSew York city ;
that Well, Fgrso Co. were to deposit with Hartley
there uud a mortgage, and that all mortgage bonds
held by other parties, who should thereafter rtic
pate in said agreement, should be held subject u
the terms thereof. The amount due each party
January l, 1868, was to be ascertained and Wells
Fargo Il Co. agreed, after certain date, to hold
the net profit of such road in trust for the parties
executing such payment.
Wells, Fargo Il Co. agreed to foreclose their
mortgage and sell the road Hereunder and obtain
the title thereto; and after the consummatiou of
such sale the corporation, called the Sierra Ne
vada Railroad Company, to be formed of the
of the bonds and the representatives of the
second mortgage the capital thereof to consist of
the amount of coupons and bonds together with the
amount of the mortgage to Wells, Fargo & Co, and
10 per cent. added thereto. And after such organi
zation the bondholders who subscribed to the
ment were to receive the stock of said company
the amount of stock thus to be received being
specifically provided for by Article XIV of such agree
ment.
All stock not issued to be held for the common
interest; or in payment of any bondholders who
should subsequently accept such stock. All parties
to the Agreement were to cooperate in order to
carry out the terms OF the settlement and reorgan
ization Of said company and il twas specifically spec
fled in said agreement ' that the basis upon VIII oh
the capital stock of the company shall be issued
to the holders of the present Indebtedness, unuer
both the first and second mortgages, and also upon
which said Indebtedness shall be Cancelled and re-
tired, shall be as follows :" the agreement then
specifying such basis.
This agreement was signed by Wells, Fargo
& Co. and Charles E. McLane, their trustee,
and by l.. L. Robinson. To the agreement
was appended another agreement, signed py the
various bondhoders, wherein they consented 10 sucn
agreement and accepted the conditions thereof and
to this latter agreement appended the
of L. L. Robinson by J. p. Robinson, Tor III oonos,
amounting upon their face to Sill, 600 and ). +.
Robinson, for G.. T. NJ. DAVIS, Tor tnree oohds,
amounting in value to $4,000 .
II annears from the evidence that the original
draft and this Hartley agreement, was In the hand
writing of Lester L. Robinson. 1t Is claimed, how
ever, by the plaintiff that this agreement was never
carried into effect but the contrary was entirely
abandoned and this theory is based by counsel
mon tbe assumption that under such agreement it
bec1me necessary for all of the outstanding bond
holders OF said company to become parties thereto