Little Falls transcript. [volume] (Little Falls, Morrison County, Minn.) 1876-1894, 1883-10-05
thu & b. !, WlISlI
SIMMONS ard Barnsam IJnshl
cessful ii, their Effort ~
Obtain q Part Of the Pro-
fits of The COnsrlIe<
ton OF the Above
Ma saed rail- =
road. Il s:@~sS4.s E 53s@
WILLARD AHEAD D. AT PRESENT

Another decision adverseto the fHteT
estssot Simmons and Barnum party 81
stockholders in The Little Fails s. IyaEe,
ia railroad has been rendered by the
State courts. The following lengthy arti.
cletaken from yesterdays Pioneer Press
explains tho grounds fak ertby the Judge
and will prove interesting TO our rcad
ers: r :s} r :. u -" - r n :. "a
Judge Dickinson in the supreme
court yesterday rendered a decisions ii
the case of James II. Weed and J. Il
Sanders, appellants, vs.. the Little
Falls & Dakota Railroad company and
Henry Villard,'W H. starbuck, Viii.
fam Crooks, Charles A. DeGraff, r.
P. Barnum, Jonathan Simmons, r. G,
Moore, J. G. Whittemore, RI. G. Tyn-
dali, q. Haupt, George Il. Adams, G.
4. Dexter. Horace White, w. P.
C1ough and T. Fl. Tyndall, respond.
etEts. The amount Of stock Of the Lit
tie Falls & Dakota road, authorized by
the articles Of incorporation was 40. 900
shares. August l, 1881, 232 shares had
been issued, Of which 1926 shares were
owned by Mr. Willard, who, by virtue
of his controlling interest, named the
board Of directors. On the 4th of
August, 1881, there was $ meeting held
at which two contracts were submitted
for the directors approval These
contracts were prepared by direction
Of Mr.. Willard, They both bore She
same date, and were'plrt OF one trans
action. In one Of then1 the defend
ants, Crooks Il DeGratf, who were
partners, were parties of the Ole part,
and the railroad corporation, de-
PENDANT, the party of the other part.
BY its terms DeGraf & Co. were to
construct and equip. the road, for
which they were to receive 33l shares
of the capital stock and bonds to the
amountssof $4,000 per mile, securing
the same by mortgage of all the
property and franchises of the compa-
ny, also the assignment Of al the mu-
icipal securities which should be is
sized in aid Of the construction of the
road. Such securities had then been
voted with legislative authority, under
certain conditions, to the amount of
S164,SO0 In the other contract the
contracting parties named were De
Graft & Go. and ". II. Starbuck. BY
it's terms De Graft & Co. sold and as
signed to Starbuck all the stocks, mort
cages, bonds and municipal securities
which they were to receive under
their contract with the railroad com
panv, Starbuck to pay them $5,446 for
each $4,000 Of mortgage bonds, with
the accompanying 23I shares of sock.
He was Also to pay certain specified
sums for extra work on con instruction
and to provide large amount of ma
teria1 to be used in construction. These
contracts were submitted to the meet
ing Of August + it being understood
that Mr.. Willard was interested with
Starbut:k. The board authorized the
contracts by unanimous vote, and
Immediately thereafter Wizards and
Starbnck's designations We're handed
in and the other directors named by
Willard were elec tel.
AssURA Noes REQUIRED,
Barnum and Simmons, before they
voted in favor of the execution of the
contract, required assurances on the
part of, Willard, that they should be
permitted 20 share in the benefits to
be derived by starbuck and Willard
from the transaction. RELYING, they
allege, upan the assurances given to
Barnum and Siinmons the remaining
partners we're satisfied, and immedi-
ately afterwatd sought to avail them
selves Of the supposed benefit accru-
ing from the transaction. Their efforts
did not meet with success, their pro-
posals in that respect being rejected.
Sixteen shares ofthe stock held by the
partnership were transferred to Weed
and Sanders, and an action was COM
meneed, the relief sought being an.
adjudication that the contracts were
fraudulent and void, and an injunction
against the contemplated issue of the
bonds, mortgage and stock In stating
the opinion, Judge Dickinson says.
@:The court has not IN terms found
the transaction complained Of to. be
fraudulent, but from the facts found
the conclusion fraud cannot we'll be
avoided; md for the purpose ofsthe.
case we assume that the transa elton
was a fraud as to stock holders not CON
sentfng to It, for the. reason that The
corporation was made to assume o15fi-
cations BY the issue Its bonds and
stock largely ii excess of. the an1onnt
necessary to raise money sufficient for.
the construction and equipment of the.
road : At the threshold, how
ever, stands the maxim that he who
comes into equity must come. with
clean hands. A court of equity will
notsaf the suit Of a party to a fraud.
grant affirmative relief from the con-s
sequences Of it, but will leave the par
ties II the position ii which they have.
placed themselves. \
I sz 4 FOOT roEMEt,. 5 Il Il
It Is further set forth that Willard S.
Intention to issue stock and bonds for
the building of.the road was disclosed
to Barnum and also 10 ssirntndn tt
was thought that the road could be.
built for $1s, 600 per mile, leaving 4.
profit Of 81 900 per mile IS the bonds
would be- worth nearly their full ya1ue