The intelligencer. [volume] (Lexington, Mo.) 1887-1891, 1890-02-08
THE SUIT AGAINST TIE FRISCO

Francis to Atty. Gen. Wood asking for
an opinion in the matter of the alleged
claim of the state against the Frisco
railroad:
EXECUTIVE DEPARTMENT, STATE }
OF MISSOURI, JEFFERSON CITY,
January 29th, 1890.
Hon. John Nj. Wood, Attorney
GeDeral--Sir:-Id desire your opinion
as 10 the liability of the st. Louis II
San Francisco Railway Co. to the state
for the SUN of $500, 900 and Interest
from June /, 1875, which amount the
South Pacific Railroad Co. by its bond,
approved June IL, 1868, now on file in
the office of the secretary OF state, obi.
gated itself to pay to the state of Mis-
souri,, in installments OF $10O, 900 each,
on the first DAYS of June, 1874. 1875 and
1876 respectively, as part OF the con-
sideration given by said South Pacific
Railroad Co. for what was then known
as the southwest branch of the Pacific
railroad.
BY all act approved February ~.
1866, previous sale OF the said south
west branch of the Pacific railroad had
been authorized, and on May 12, 1866,
John T.. Fremont had made a PROPOSE
ton in writing to purchase same for
the SUN of Sl, 800 600, one fourth cash
and the remainder to be secured by
first lien on the road and all OF its prop
erty. Contract TO that effect had been
entered into Nav %, 1866 and contained
various other conditions as to the ex-
tension and completion of the road,
which, If not complied with, or in the
event of any failure to pay the purchase
money, should "work q forfeiture OF
the road and its franchise aud property.
both real and personal, to the state OF
Missouri. Said act had furthermore
provided hat in case of default to com.
ply with conditions of the sale, "the
governor shall proceed at once to take
possession OF the Same without the aid
OF any writ or process OF law" Free
mont and his assigns, failing to fulfill
the contract, the governor had taken
possession OF the road in June, 1867,
and the Legislature, by act of March Il.
1868, sold it TO the South Pacific Rail
road Co. In the meantime Fremont
aud his associates, incorporated ss the
Southwest Pacific Railroad Co., hal
executed second mortgage of %, ,000,-
900 on the property, aud had sold $2,-
250, 900 thereof, and had presumably
expended the proceeds of same In im-
proving and extending the road and
adding TO its rolling stock. BY the sale
made to the South Pacific railroad,
however, the only consideration which
the state was to get for this property
was $500 900, 10 be paid in three equal
installinents, six, seven aud eight years
after the transfer of the property, and
without interest, and of that sum the
one cent. In March, 1870. the Sout b
Pacific Railroad Co. consolidated with
or was purchased by the Atlantic and
Pacific railroad, aud the acceptance BY
the Southern Pacific railroad of the
terms of said act are now on file in the
Office OF the secretary of state.
By the deed OF consolidation, or pur-
chase, the South Pacific railroad, with
or by the Atlantic and Pacific railroad,
dated October &c, 1879, the Atlantic T.
Pacific Railroad Co. assumes the pay
nent OF all debts and obligations OF the
South Pacific Railroad Co., and agrees
to hold harmless, indemnify and pro-
tect the said South Pacific Railroad Co.
and tina present stockholders CT or par
ties beneficially interested as such In
the company, free OF claim or demand
for or by reason OF snch debts or obh-
gations.'
This consolidation. or purchase, was
recognized aud assented to by the state
in an act of the legislature approved
March 10, 1871. During the same ses-
sion (lo7D the South Pacific Railroad
Co. memorialized the Legislature to re-
iInburse that company to the extent OF
S599 ,4s6, which sum il claimed to have
advanced for the purpose of retiring the
81 ,250,00O of second mortgage bonds
which Fremont had f1osted. This ap.
peal was made on the ground that the
state, through its legislature and gov
ernor, had declared in the act of March
IL. 1868, authorizing the sale of the
road to the South Pacific Railroad Co..
that the property TO be conveyed was
free of all incumbrsnce. In other
words, the state, after having disposed
of property worth, or costing millions,
fora worthless promise to pay $500 900
IN seven years, without interest, was
asked to pay the vendees $500 900 to
assume ownership There is no record
of the legislature having granted the
prayer. Early in 1875, after the first
had fallen due, the house Of representa-.
tives, by resolution, asked the opinion
of the attorney general "as to what
power, If any, he or any other state
officer had of enforcing the payment of
the amount due and to become DUE
under the provisions of section IL of the
&C. OF March, 1858, from the South Paci.
flc Railroad Co. l enclose herewith the
opinion of the attorney general In res.
poDse to said resolution. In September,
1876, the same attorney general (Hocka'
day. instituted suit in the circuit courI
of Cole county against the Atlantic and
Pacific Railroad Co. for the $500 ,00t
above mentioned. Early In 1877 al
the beginning of the administration ot
Gov. Phelps, the senate passed q reso
luton asking the attorney general whsI
effort had been made to enforce pay.
me mt of said $4,000 and whether
same was collectable by law. ! enclose
herewith the reply of the attorney gene
raj thereto. The suit in Cole county
was dismissed in December, 1877, by
Attorney General j, l.. Smith.
The Atlantic and Pacific railroad
property in Missouri, having been pu
in the hands of receivers, was sold il
1876 under foreclosure, and bought b,
parties who transferred IL to the pres
ent st. Louis and San Francisco rail
road, but the Atlantic and Pacific Rail
road Co., which. as corporation
assumed the obligations of the Soutf
Pacific railroad, has continued tC
maintain it's corporate existence and
hold assets and property to the present
| time
On the 31st OF January, 1880, the 81
Louis and San Francisco Railroad Co.
as party OF the first part, the Atlantic
and Pacific Railroad Co., as party o.
the second part. and the Atchison, To
pcka and Santa he Railroad Co., q,
party OF the third part, entered into al
agreement of which the state and pub.
lie were given formal notice by the FL
ing of said agreement in the Office o.
the secretary of state, under date o
MAY Is, 1881. by those articles o
agreement the st. Louis and San Fran.
cisco Railroad Co. assumed all the In
debtedness and obligations. specific
and general, of the Atlantic and Pacifi,
Railway Co. No action has beeI
taken to enforce the payment of the
| $500, 900 and interest to the state frou
the st. Louis and San Francisco Rail
road Co.
II the state has a valid claim sgains
the ST. Louis and San Francisco Rail
way Co. at this time, will Il be barred
by limitation on the 3lst of the present
month, or ten years from the time tn,
| st. Louis and San Francisco Railroad
Co assumed the obligations of the
Atlantic and Pacific Railroad Co. q?