Savannah morning news. [volume] (Savannah) 1868-1887, 1884-05-06
SUPREME COURT CASES.
GOULD'S CLIQUE SET BACK ON
THE MISSOURI PACIFIC.


Charges that the Road was Taken from
the Former Owners by Sharp Prac-
tice to be Again Put Under the Legal
Magnifying Glass-A Slaughter House
COmDany's Privilege at Stake.
WASHINGTON, May 5.-A decision was
rendered by the Supreme Court of the
United States to-day in the important case
of the Pacific Railroad Company of Mis-
souri,, appellant, against the Missouri Pa
cific Railroad Company CIR. Garrison, Jay
Gould and others, an appeal from the Cir
cult Court of the United States for the
Eastern District of Missouri.
This suit arises out Of the alleged fraudulent
foreclosure in 1876 of mortgage on the Pa
cifc Railroad of Missouri, the sale of that
road under a decree of foreclosure, and its
reorganization in the hands of Garrison,
Gould and others, under the title of the Mis-
souri, Pacific Railway Company. The suit,
therefore, is virtually one brought by the for
mer holders of the railroad property against
the present holders of II, to recover the legal
title to it, on the ground that thev were de-
prived Of it by gross fraud. 1t was alleged by
the appellant in the court below that a default
in the payment of interest on the bonds which
was made the preteXt for the foreclosure and
sale of its road, was fraudulently caused and
procured by means of dishonest cOllusiOn be-
tween its unfaithful board of directors and
the present appellees, and that, therefore, it
Is entitled to have the decree of foreclosure
and sale set aside and its property restored to
it. The appeleos demurred in the court be-
low upon various grounds, which this court,
in an elaborate opinion by Justice Blatch-
ford, declares to be insufficient, this court
holds:
First. That charges Of fraud in the bill were
sulhelent to warrant discovery and relief
based on those charges.
Second. 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 the unfaithful conduct of the solicitor and
directors OF the defendant IN that suit. and it
was therefore a case of which court of
equity would take cOgnzance.
Third. That there was no laches in fling
the bill, as the time during which the appeal
to this court was pending could not be counted
against the plaintiff.
Fourth. That as the bill showed a hostile
control of the corporate affairs of the plain
tiff bY its directors during the periOd covered
by the foreclosure suit, the mere knowledge by
or notice Of the plaintiff or its directors, oli-
GERS or stockholders, of the facts alleged in
the bill, during that period, was unimpOrtant,
a case OF acqulescence, assent or ratification
not having been shown, and the corporation
having acted promptly when freed from the
control of such directors.
ruth. That it did not, however, follow that
the parties who became interested in the
plaintiffs corporation, with the knowledge
OF matters set forth in the bill, were entitled
to the same standing as to relief with those
"
the transactions complained Of occurred.
Sigth. That the Circuit Court had jurisdic-
tion of the bill, notwithstanding the fact that
the plaintiff and some defendants were cit-
zens of Missouri. The decree of the Circuit
Court is therefore reversed and the case re-
manded, with directions to overrule the de-
murrers, with costs, and take further proceed
lngs not inconsistent with this courts opinion.
The railroad property IN controversy in
this case was bought in at foreclosure sale in
1876 by James Baker for Q. x. Garrison, Rus
sell Sage and others, and the controlling in
terest in 1t was afterwards sold by the latter
to Jay Gould, and it has since that
time formed an important link in the Gould
system. The present case came to this court
on a legal technicality in 1880, and was de-
cded against the plaintiffs or original owners
of the road. The decision rendered to-day
will enable the plaintiffs to bring the case here
upon its merits and get the 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.
SLAUGHTER HOUSE CASE.
A decision was also rendered by the court
to-day in the case of the Butchers Union
Slaughter House and Live Stock Landing
Company, appellant, against the Crescent
City Live Stock Landing and Slaughter House
Company, an appeal from the Circuit Court
of the United States for the Eastern District
of Louisiana. The question presented by this
case is whether the State of Louisiana, by the
provisions Of its new constitution, adopted in
1879, had power to take away the exclusive
privileges granted 10 tne crescent City
Slaughter House Company by an act OF the
General Assembly of Louisiana, adopted
March 8, 1869. This court holds:
First. That the regulation OF certain un-
wholesome or dangerous trades, such the
slaughter house business, manufacture Of gun
powder. etc, which may become detrimental
to the public health or safety, is included
among what may be called the public powers
of State.
Second. That the Legislature cannot, by
any contract, limit the exercise of these pO-
lice powers to the prejudice Of the general
welfare. The preservation OF the public
health. and the protection of public morals,
are so necessary to the interests of the social
organization that a wise policy forbids the
legislative body to dlvest itself of power to
enact laws for the preservation of health and
the repression Of crime. Such power cannot
be sold or bargained away, under any circum-
stances. as If it were n mere privilege which
a legislator could dispose of at his pleasure.
Third. 1t follows from these considerations
that the State of Louisiana had and could
properly exercise power to revoke the exclu-
sive privileges granted to the appellees in this
case, and that the State constitution of 1879
and the ordinances of the city of New Orleans
complained of are not void as impairing the
obligation of the appellees' contract. The
decree of the Circuit Court is reversed and
the case remanded, with directions to dismiss
the bill. The opinion is by Justice Miller.