Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1882-06-13
FORRESTAND BUSBY
Answer the Bill Filed by Maerae and
Graham, Charging Them with
DOubIe-DealiDg in
Selling Stock in the Memphis and Selma
Railroad, and Justify Their Con-
duet in the Matter.

II will be remembered that a few days
| since, during the absence of Messrs. J. J
! Bu=by and w. NJ. Forrest in New York, q
bill was filed against them in the Chancery
| Court by Messrs. c. G. Graham and g. w
| Macrae, which has been the subject of much
comment in the community, on account OF
the grave charges of collision and fraud
made in the bill. 1t alleged, substantially,
that Captain Forrest had succeeded In nego-
tiating with Mr.. Fred Wolfe, of New York,
a contract by which Wolfe agreed, on the
| delivery to him of the stock of the Mem
phis, Holly Springs and Selma railroad, to
give to the holders of the stock an equal
amount of the bonds of the Memphis, Selma
| and Brunswick Railroad Company; that
Major Busby was commissioned by the COM
plainants and other stockholders as their
agent to 90 to New York and sell their stock
at the big hest price he could get but in no event
at less than twenty cents on the dollar;
that Major Busby, on his arrival in New
York, entered into fraudulent agreement
with CAPITA Forrest, wherein he agreed TO
take twenty FIVE cents on the dollar for the
stock, in consideration of his sharing equally
with Forrest in
THE BENEFITS OF THE TRADE
with Wolfe, and that in pursuance of this
agreement they colluded together and de-
frauded the compliments out of the differ
q
was sold and the value of the bonds, which
it is alleged worth par, or nearly par.
The chancellor granted an injunction re-
strsining the company from issuing the
bonds to the defendants.
Major Busby and Captain Forrest have
each filed under oath a separate and elab-
crate answer 10 the bill, i'm which they go
into a clear and detailed history of the enter
prise known as the Memphis, Holly Springs
and Selma Railroad Company, and fully exon
crate themselves from all charges OF fraud, COL
fusion or unfair dealing, and not only deny
the allegations of the bill as untrue, but sup
port their denial with a relation of facts
which fully corroborate them.
THE MATERIAL POINTS.
The following are the material points in
which their answers concur:
Ffrst-That the Selma, Marion and Mem
phis Railroad Company was incorporated
after the war for the purpose of constructing
a through line from Memphis TO Selma,
under the auspices of General Forrest.
Seeond-That the road was partially con-
structed, but before any part Of it was COM
pleted, owing to financial endorsements,
the work was suspended in the fall of 1872,
since which time no further progress has
been made, but the property has been con-
stantly deteriorating in value.
Third-That $4,000 of mortgage bonds
of which belonged 10 the estate OF General
Forrest and have since been acquired by his
son, one of the defendants, while the other
bonds were bought up on speculation by COM
plainants and others at nominal prices, some
of them selling as low as one and half cents
on the dollar.
Fourth-That the mortgage was foreclosed
under decree of the United States Court
here in Memphis, and at the foreclosure sale
b.a oad hui No.
Busby in behalf of himself and such other
bsndholders as desired to join in the pur-
chase, for $4,000.
Fifth-That parties representing $3.50, 900
of the bonds 6led them in court aud Joined
in the purchase, while the holders of the
other bonds did not think them of sufficient
value to present them for distribution.
Sixth-That the parties representing the
1868, 900 in bonds, including Captain Forrest,
who controlled $4,000, and Major Busby,
who controlled $4,000, proceeded to iucor-
porate the Memphis, Holly Springs and
Selma Railroad Company.
Seventh-That this new company issued
S263, 900 OF capital stock, and gave to each
of the bondholders joining in the enterprise
an amount of stock equal TO the amount of
bonds they held in the old company.
Eighth-That Major Busby insisted upon
the stockholders raising money among them
selves to push the road to completion from
Memphis to Holly Springs, and offered to be
one of twenty gentlemen TO subscribe $4,000
for this purpose, but he failed to meet with
cooperation from the complainants or the
other stockholders, and the prosecution of
the work was abandoned.
Ninth-That the most OF the stockholders,
including the complainants, were wanting in
public spirit, and that complainant Graham,
particularly, looked alone to whatever profit
he could make out of the enterprise.
Tenth-Thst the stock had only nominal
value, and various efforts were made to sell
il without success.
Eleventh-That the charter Of the new
company was pronounced as fatally defective
by General Walthall and other learned
lawyers in that it did not acquire certain
property rights and franchises belonging to
the old company, and their opinions still
further embarrassed the enterprise.
THE ANSWER OF CAPTAIN FORREST
then goes on to show how he went on to
New York in the latter part OF the spring
or early summer of 1881 to get contract
from Fred Wolfe TO construct the road from
Vicksburg to Shreveport, and there incl
dentaIly learned that Mr.. Wolfe was max
log inquiries touching the Memphis, Holly
Springs and Selma Railroad Company, and
in this way he was led into negotiations with
Wolfe which resulted in the arrangement
IN which WOiHe dSTeeu, On the uelVeTy
to him of all or a controlling interest in the
stock, to issue 10 him certificates for the de-
livery to him an equal amount of bonds in
a new company which Wolfe and associates
proposed to organize, and afterward known
as the Memphis, Selma and Brunswick Rail
road Company. The answers then concur in
stating:
First-That during the tendency of nego-
tiations between + G. Gordon, of Georgia,
and the Menu his stockholders for the pur-
chase OF their stock at twenty cents on the
dollar, Captain Forrest dispatched from New
York that he would give better price for it.
Second-That he at once came on to Mem
phis and found the stockholders generally
willing to sell to Gordon at twenty cents.
Third-That he only wanted a controlling
interest in the stock because he was not able
to pay for more, and that he approached
Major Busby offering him twenty five cents
for his stock, but Busby declined unless he
would also take the stock of Jacob Thomp
son amounting to $4,000, which Busby rep
resented in the absence Of Thompson, and
this Forrest refused to do.
Fourth-That IN the progress OF negotia-
tions Forrest conceived the idea of taking