National Republican., 1884-05-06
THE SUPREME COURT.
Interesting Decision Made in tho Case OF
the Pacific Railroad Company.

Interesting Decision Made I'm tho Case OF
tho Paclnc Railroad Company.
A decision was rendered by the supreme
court of the United States yesterday in tho
important case of the Pacific Railroad COM
pany, of Missouri, appellant, against tho
Missouri Pacific Railway company, 9. *.
Garrison. Jay Gould, and others. Appeal
from the circuit court of the United States
for tho eastern district of Missouri.
This suit arises out of the alleged fraudu-
lent foreclosure in 1876 of mortgage on the
Pacific railroad of Missouri the sale of that
road under decree of foreclosure, and its
reorganization in the hands of Garrison,
Gould, and others. under tho title of tho
Missouri Pacific Railway company. The
suit, therefore, Is virtually one brought by
the former holders of the railroad property
against the present holders of it to recover
legal title to it, on tho ground that
they were deprived of it by gross
fraud. 1t was alleged by the appellant
in the court below that the default in tho
payment of the interest on its bonds, which
was made the pretoXt for the foreclosure and
sale of its road was fraudulcntly caused and
procured by means of dishonest collusion
between its unfaithful board of directors
and the present appcllecs, and that there
fore it is entitled to have the decree of fore
closure and sale set aside, and have its
property restored to it,
Tho appellees demurrcd in the court
below upon various grounds, which this
court, in an elaborate opinion by Justice
Blatchford, declares to bo insufficient. This
court holds:
1. That the charges of fraud in the bill
were sufficient to warrant the discovery and
relief based on those charges.
g That the case set forth in the bill was
one showing that no real defense was made
in the foreclosure suit of 1876, because of tho
uniaithful conduct of the solicitor and
directors of the defendant in that suit, and it
was therefore case of which court Of
equity would take cognizance
3. That there was no laches in filing the
bill, as the time during which the appeal to
this court was pending could not be counted
against the plaintiff.
A. That as the bill showed hostile control
of the corporate affairs of tho plaintiff by its
directors during the period covered by the
foreclosure suit, mere knowledge by or notice
to the plaintiff or its directors, officers or
stockholders, of the facts alleged in the bill
during that period was unimportant, q case of
acquiscenco, assent or ratification not having
been shown, and the corporation having
acted promptly when freed from the control
of such directors.
.. That it did not however, follow that
parties who became interested in the plain
tif's corporation with knowledge of the
matters set forth in the bill we're entitled to
the same standing as to relief with those who
were interested in the corporation when tho
transactions complained Of occurred.
6. That the circuit court had jurisdiction of
the bill. Notwithstanding the fact that the
plaintiff and some of the defendants were
citizens of Missouri.
| The decree OF the circuit court is therefore
reversed. and the case remanded, with direc-
| -. l.
and take further proceedings not inconsistent
with this courts opinion.
The railroad property in controversy in
this case was bought in ut the foreclosure
sale in 1876 by James Baker for c. X. Garri-
son, Russell Sage, and Others aud u control
ling interest in it was afterward sold by the
latter to Jay Gould, and it has since that time
formed an important link in the Gould sys-
TEN. The present case came to this count on
n legal technicality in 1880, and was decided
| against tho plaintiffs or original owners of
the road. The decision rendered to-day will
enable tho plaintiffs to bring the case hero
upon its merits and got q final decision of
this court upon the charges of unfaithfulness
and fraud, which, it is alleged, were the means
| by which the road was wrecked.
A decision was also rendered by tho court
| yesterday in the pa tent case of the Eagleton
Manufacturing company, appellant, VS.. tho
West, Bradley & Cary Manufacturing COM
puuy anu JOscpH y. west Appear from tno
circuit court of the United States for the
southern district of New York.
This was a suit for alleged infringement of
a patent upon an improvement in japanned
furniture springs granted to the appellant in
1871. The court holds that the patent is
invalid and affirms the decree of the court
below. Opinion by Justice Batchford.
A decision was also rendered in the patent
case of j. Howard Phillips ct al, executors,
appellants, VS.. the City of Detroit. Appeal
from the circuit court of tho United States
for the eastern district of Michigan. This
was n suit brought by the appellants against
tho city for alleged Infringement of patent
granted to one Phillips, Dec. 5, 1871, upon
an improvement in wooden pavements. The
court below dismissed the bill on tho ground
that in view of the state of tho art at that
time the patent did not describe any patent
able invention. This court sustains that do
cision and afllrms tho decree. Opinion by
Justice Woods,