Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1882-11-24
IMPORTANT DECISION

Falls & Dakota ROad---The Injunction
Prayed For Denied.
Judge Brill filed decision yesterday in
the case of James II. Weed and others
against the Little Falls & Dakota Railroad
company and others. The action was tried
at the general term of the court without a
jury. The judge finds as fact that William
Crooks and Charles A. De Graf have, been
partners under the firm name of De Graf
& Co., and that the defendant is corpora
ton; that the Minnesota Legislature on the
Sd of March, 1881, granted swamp lands
to construct the Little Falls / Dakota Rail-
road company; the completion of theiroad
from Little Falls to Morris, 81 miles, was
necessary to entitle the company to the
whole of the bonds voted by the different
towns and cities along the route. The CAPT
tai stock of the company was 100000.
On the 10th of September, 1879, De Graft &
Co. subscribed for 126 shares of
capital stock, the balance of the stock hav-
ing been subscribed by people along the
line; when De Graft i Co. subscribed for
the stock it was fully understood between
said company and the holders of the other
shares and De Graft & Co. that the
latter should have ma
jority of the stock and
should have control of the company and
its resources and affairs, in order to insure
the building of the road, and it was upon
such understanding that said De Graf &
Co. subscribed for the stock. In pursu-
ance of such understanding. upon acquir-
ing said stock. at thu instance Of De Graf
& Co., certain of the directors resigned and
in their places were elected said Crooks,
H. E. Sargent, w. H. Smith, L. E. Reed
and defendant, Clough, none of whom e1-
cept Crooks and De Graf owned any of
the stock, and thereafter, down to the sale
of said 1876 shares to Willard, said De Graf
Il Co. owned said shares Of stock and were
freely permitted to, and did, control the
action of tho company through the board
Uf directors. About June %, 1881, said
Willard purchased of De Graf d Co. the 126
shares and has since boon the owner there
of, and at the suggestion Of Willard. on the
18th of Juno, 1881, Dc Graf, Sargent, Reed,
Smith and Becker resigned as directors Of
tho company, and in their stead
Willard, White, Starbuck, A. II. Holmes
and 7. II. Tyndal were elected directors
Of the company. On the 4th Of July, at
the instance Of Willard Crooks resigned and
Haapt was elected to all the vacancy; on
the 2Sth of June Willard, Starbuck and
Holmes were appointed an executive COM
Mite, and on the 4th Of July, at a meeting
Of the board, the board authorized the
committee ''to enter into all contracts and
do all acts in intervals between the meet
ings of the board of directors which the
board of directors itself might enter into
or do.' The board also at the Same meet
ing passed resolution amending article
of the articles of incorporation, by which
heretofore the highest amount of indebt-
edness Of the company had been fixed at
81. 5O0,O 900, SO as to read as follows: ''Ths
highest amount of Indebtedness or liability
to which said corporation shall at any
time be subject, shall not exceed $4,000
for each mile of the line Of said
road and of any branch or
branches thereof including side
tracks as the Same may hereafter be locat-
ed.' At the time of the meeting on the
4th of July there was in the hands of Vii
lard in New York proposition made by
De Graf i Co. respecting the construction
of said road, and on motion of Willard the
proposition was referred by the board to
Hsupt for the purpose of having him con-
slider certain changes necessary to be
made in the work proposed to be done.
said proposition to be referred to the exc
cutive committee by Haupt; that neither
the company nor De Graft Co. could
build tho road in consequence Of the op
position Of other roads, and it was expect
ed by all that Willard would build it; that
at meeting held in Aug. 1881 a contract
was submitted by Willard to the company
and adopted; that at the same meeting
| contract with De Graft was submitted and
! accepted and subsequently executed by
Do Graf q Co.; that at the same meeting
Willard. Holmes and Starbuck resigned as
members of the executive committee and
their designations were accepted, and
to fill the vacancies Adams, White and
Tyndale were elected and still are the ex-
ecutive committee; that none of the elect
ed parties had any stock in the company;
that Willard is interested in the contract;
that when it was known that Willard had
126 shares of stock Barndm and Sim
mons went to work to purchase stock; that
on July 81, 1881, Barnum and Simmons
sold the stock so purchased to partner
ship composed of themselves, Frederick
Driscoll, Gustav Willius, L. T.. Reed and
0Ai0 PAdiAAeAASs Which, POI cAOASAAP AoN OCCA
formed on that day for the purpose of
buying, carrying, holding and selling and
dealing in shares of stock of said Little
Falls 4 Dakota railroad company; July,
%, 1881, Barnum purchased other
shares of stock and transferred
the same to the partnership; that
| on Oct. %, 1881, Barnum, Simmons, Dris-
coll, Willius, and Reed assigned sixteen
shares to the plaintiffs, and the same are
now owned and held by them, the
plaintiffs, but they have never
been transferred on the books Of the COM
pany, nor did the company have any no.
tice of plaintiffs rights therein prior to
the commencement of this action; that
Barnum and Simmons acted at the time of
said contract and in conducting the CORE
spondenoe with Willard with full: knowl-
edge on the part of the partnership; that
said partI ership, before the commence
mont of this action, asked said Willard to
be allowed to, and were able, and offered
to contribute one-fourth of the expense of
building and equipping the road, and to
receive one-fourth of the bonds and stock
of said company; that Willard refused to
consent to this; that at the time said
contracts were made Willard supposed Bar
mum and Simmons were the holders of