St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1889-09-14
FARLEY F0ILED.'
His Big Suit for Millions
Dismissed by Judge
Brewer.
The Action. Against ]. j. Hill,
N. w. Kittson and the Z
Manitoba Railroad, n
Claiming a Contract That
Would Involve Over Five 81
Millions, T.
Is Dismissed on the Ground
That Such Contract Was 4
Never Made.
Points on Which He Relied
Dispassionately Upset by
the Court.
Circumstances and His Own
Letters Disprove the Claims
Of a Contract.

The celebrated and important action
brought by Jesse P. Farley against
James j. Hill. Norman w. Kittson and
the Manitoba Railway company was
yesterday dismissed, in the United
States circuit court, in an opinion filed
by Judge Brewer. The case is one of
the most celebrated in the annals of
Northwestern Jurisprudence, and has
been pending in the courts since 1880.
Its history may be condensed into few
words: Farley, as receiver and general
manager for the bondholders of the st.
Paul & Pacific railroad. claimed that
in 1876 he made an oral agreement
with j. j. Hill and n. W. Kittson,
whereby an equal partnership was ere
ated for the purpose of buying majority
of the outstanding bonds and inheriting
the properties of the company ON the
foreclosure sales. Farley's claim was
that Hill and Kittson were to furnish
the money, but he was to have an equal
share of the profits, putting in only his
advice, information and assistance. He
asked the court to sustain his claim and
and order an accounting. The defend
ants denied that such contract had
been made, and Judge Brewer sustained
them, his decision in full being as fol-
lows:
The original bill in this case was filed Nov.
Is, 1880. 1t alleged contract and sought
an accounting. An amended bill having
lo1 ba
and Kittson filed a plea thereto which was
sustained in this court on the hearing before
Judges Treat and Nelson. Complainant ap-
pealed to the supreme court, and the case
having been twice argued before that court,
the judgment of this court was reversed and
the case remanded. with instructions to over
rule the plea and direct the defendants to-
answer. Thereafter an answer was filed,
testimony has been taken and the case,
argued, and now submitted upon the plead
ings and proofs. The decision of this court
upon the plea was to the effect that the con
tract alleged in the bill, if made, was one
against public policy, and could not be en-.
forced. The case in the supreme courti
passed off on question of pleading; and the
decision there, in no manner settling the
question whether the contract as alleged
was one which could be enforced or not,
simply determined that the equities of the
bill could not be considered upon plea, and
that question Of fact put in issue by the
plea and replication found for the plaintiff
compelled the oYerruling of the plea. So at
the end of some years the case now contest
before me for decision. with no substantial
questions of law or fact settled. A brief
statement OF the questions presented is this:
THE CASE IN BRIEF.
Iu 1876 complainant was. by appointment
of this court. receiver of the property of the
st. Paul q Pacific railway. and also general
manager of the lines of the First division of
the st. Paul & Pacific Railway company,
under the company, and subsequently under
the trustees in certain mortgages in posses
sion thereof Several series of mortgage
bonds were outstanding. largely owned and
held i'll Holland. Complainant alleges that
he and defendants Kittson and Hill entered
into an agreement for the purchase of these
bonds, or a majority thereof, and the use of
the same In the purchase Of the road
and the foreclosure of the mortgages. The
defendants were to procure the funds neces-
sary therefor. and the complainant to furnish
facts, information and assistance. Certain
it is the bonds were purchased by the de-
PENDANTS Hill and KittsOn, with two associ
ateS, foreclosures cOnSummated and the rail-
way properties acquired. The question Of
fact, then, is whether such an agreement as
alleged was entered into, and the question of
law whether, if made, it can now be enforced
in court Of equity.
In reference to the question of fact. 1t may
De pTel0lSeu IIldI Tie COLI pldlIldIL MT. L ar
ley and his then assistant in the manage
ment of the roads, Mr.. Fisher, testify that an
agreement was made substantially as alleged
in the BILL while defendant Hill as positively
denies the same. Defendant Kittson died
before his testimony could be taken. mas
much as according to eomplainant's
testimony only four persons were pres
ent at the making of the agree
ment namely, Messrs. Farley, Fisher, Hill
and KittSOn. the case, SO far as the direct
Wi fxUn
affirming and one denying: one of those
affirming and the one denying being pecu-
niarily interested and their interests opposed,
while the other affirming has. so far as ap-
pears, no direct pecun1ary interest This,
upon the direct testimony leaves the pre-
ponderance in favor of the com
piainant, but where there is
square contradiction between witnesses of
apparent credibility, as to principal fact
like this the solution is not always reached
by process of mathematics. mere count
ing of the number of witnesses, but often re-
quires careful examination of all surround
ing circumstances. In this case inquiry
must be directed to the inherent prob
rounding the parties, of the making
of such an agreement; to the conduct of the
parties prior and subsequent to that time; to
any contradictions and supports which their
respective stories may receive from other
and .lndisputed facts, and to any statements
oral or written inconsistent with their direct
testimony
The testimony is voluminous comprising
nearly 1000 printed pages and with this
testimony, in the various ways indicated,
counsel for the opposing parties have striven
to support their respective claims. IL is not
pretended there was any written contract
MeSsrs Farley and Fisher testify that at an
interview. which lasted about two hours,
the agreement was entered into and its terms
fixed. Inquiry naturally runs, in the first
place. to the situation of the parties and the
subject matter of the agreement at the time
it is claimed to have been made, and the prob
abilities, in view of such
SITUATION, OF THE PARTIES
entering into such an agreement. Two cor
porations existed-one the st. Paul & Pa
cific Railway company, and the other the
First division of the st. Paul & Pacific COM
pany. Each owned a land grant. The First
division had two lines completed and in
operation; one seventy-SiX miles IN length,
known as the branch, and the other 207
miles long, and known as the main line The
st. Paul company had one line of about so
miles graded and partly ironed. and another
of about 8 10 miles. on which 139 miles was
completed. In addition. some work of grad
ing had been done On this last line. SO that
there was over 400 miles OF completed road,
several miles partially completed and land
grant These various properties were mort
gagged in several mortgages. amount
ing in the aggregate to S2s, OOO.OOO-
Some of the bo-ds secured by these mort
cages had been taken up in the payment OF
lands sold, and possibly all had not been
negotiated. but the great bulk of this in
debtedness stood against the property. The
stock of the First division of the company
was mainly owned by Messrs Litchdeld, and
of the st. Paul company by the Northern
Pacific Railway company. The bonds
had been largely negotiated in Hol-
land, and these Dutch owners in '73 ap-
pointed committee to enforce their rights
and protect their interests. This committee
appointed j. S. Kennedy d Co., of New York
city, as their agents. In 1873 there was
default in the payment Of interest. Suit was
brought in this court at the instance OF
Messrs. Kennedy & Co., and in August. 1873,
this complainant was appointed receiver
of the st. Paul company's properties. He
continped as such receiver until the final
foreclosures and sales in 1879. The First.
Division company's property remained III
the possession of the company for some Time