The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1890-03-09

ID. III. ssiIsnxn ~ss exempted frona TIE par
Essest Of any stock 70 wsssrh be has Sob
srysk31
Ths asfssssif o. y. II. 6ssmsn states that
he organized the Seattfe. I.z<e Shore e
Easssrn Railway Company IN April issss-
fis was then the oTner OF Hss5ov
siy Of - stock. The FaEes
ssnna Construction Company rss also
brosgfst into life through hts r.
forts about the same tine. vita sagssfAi
stock paid ap 81 fsu.o0 The latter cor
porasson. after building forsy-nve miles Of
road. retired Ia favor Of the Seattle &
Eastern Construction COMPANY. that fne
later ecmpany has Always acted ID . bus
inessgske manner. and 20 Enatuai advsa-
Eage Of bnth corporations Gilman denies
most sfysE uoussy that the Seattle g East
ern Construction Company IL fraa1uisnf
exsacsYa. that while he wss coz
nscsea With these companies oses
10 miles Of road were ecilt
In this state. o larger znoant than was
built By any other company in the safsfe
time In The state The sfssaavit concludes
With the statement that neither. TO him or
10 sny other stakeholder. was there ever
any stock Of the railway or construction
companies issued xishoa: full pay mert
for tiBe same.
The affidavit OF Superintendent J. Z.
Allen says HAT the division from spokane
FAEIa 70 Seattle has never paid operating
expenses. and that the assumption b. the
seattle & lake Shore Construction Com
pany Of the liabilities Of the seattle, Lake
shore & Eastern Railway Company has
resulted ia Gise advantage 20 the railway
company,
After the above altidavits had been read
by Judge Burke and answered for plaintiff
by Judge Gaiklls. ex-pfefdent Mcdonald
resumed the stand. lie stated be retired
from the Presidency Of the Seattle, Lake
Shore & Eastern Railway Company June -.
ISIS: that wIan heisrst joined the company
Vice President Gilman owned liD,7zs
shares Of tie e0tnpany'S stock. lie, the
witness. did not know whether or not all of
this stock had been paid for. He
had sent bonds C. the amount II $500 900
10 tie Union Trust Company, OF New
York. Tkese bonds we're sent at the in
Stance OF Director Logan, who. witness
thoaght. was also director in the Seattle
s Lake Shore Construction Company.
On eross-examinatlon. Mr.. Mcdonald
stated i Vas customary 10 send al bonds
10 New York for the purpose OF having
them certified 10 by the trust company.
The witness denied that he was ever forced
osit Of thss directorate OF the railroad CONF
pAny on account oi difference OF opinion
with has associates. or that the building Of
the rad has been suspended on account OF
q iaes 81 funds
judge Burke opened for the defendant.
He laid particular stress on the fact that
Van Husiten controls but eleven of the
railway eoapany's lirst mortgage bonds.
aud even the few he had been advanced
by persons hostile 10 the company, 50 that
be might hsrrass IL. lie characterized the
Spokane Falls man ~ peTjurer, IN having
sworn that he owned forty bonds. Judge
Burke read from the records of Spokane
county 20 prove that when Van Hoaien
vas being sued for divorce by his wife
about year aud half ago, he stated his
whole property 20 be- worth not more than
SIS 600, of which amount $500 was prae-
ticaiIy worthless. Judge Burke cited the
case tried some years ago by Judge
Wheeler. Of Oregon The court stated
that inasmueh AS the plaintiff in that case
had purchased lawsuit. he was entitled
% that and no more. Counsel would say
20 the court that II The plaintiffs petition
for n restraining order was granted the
whole state ard hundreds OF its inhabi-
tants and millions Of iis capital would suf-
Ter. Counsel denied that Gilman ever. ex-
oepting for a very short time, was in con-
troll OF the affairs OF the railway company,
one Of whose bylaws provides that no
stock unless fully paid up, Is entitled to be
voted.
judge Caikins. for the plaintiff, began his
argument by admitting that his client may
not actually own over 500 shares of the or
iginal stock, but the law is made TO protect
even the humblcst stakeholder. he cited
authorities To show that the trustees OF a
railway corporation had no right to inter
est themselves In a construction company
10 build said road. unless they were per-
mlttesi so 10 DO by the whole board OF d.
rectors Counsel commended that the Seat
lie. Lake Shore 4 Eastern Railway Com
pany had buils forty miles OF the road from
seattle 10 some point about four miles from
nowhere. aud had quit. leaving the plaintiff
aud several other stockholders out IN the
cold
Referring to the specific charge of fraud
by sx-N Ice President Gilman, counsel
sought 10 show that although Gilman had
originally subscribed Tor sll. TO0.eso of the
railroad company = stock. he had not paid
for this amount, but had subsequently had
himself elected a trustee OK the cons,rue-
ton company that Van Houten Is a stock
holder la the Seattle. Lake shore & East
ern Railway Company, and has. therefore.
q right to bring this action. Counsel then
went on Ia show the connection between
the construction and the railway eompa.
nies by stating that several of tbs officials
Of The company ars officials of both, and
further. that both corporations employ one
attorney. Counsel commended, upon the
claim made by the other side that a
stoc6husdef had no right 30 bring ara
action such the present one. thai where
the dominant stockholders OF q company
are hostile 10 an associate, his only oppor.
tunisy Tor Justice IL by a recourse to las
Referring 10 the charge OF the other SHE,
tAat his client bad committed perjury IN
swearing that he owed $4,000 OF the nrst
mortgage bonds OF the seattle. Lake Shore
& Eastern Railway Company. Judge Cal
kias stated that had been the i4sais Of those
ehc had transcribed the testimony
- being new 6 ocs0ek. an sd loarnment
ter dinner was here taken. When court
Eeeeavensd at %. W. lar Hill resumed
the argument l0s the plaintiff. lie very
eloseiy followed ,ee lines lala down by
1vdgs Caiktns. and had spoken sAoat THO
kaars. when booking as bis watch. he ia.
qugred ol tte court ii nc = IS not worrying
him.
GA. 30. replied his honog. "oniy that
thEs 10 Sueh an smpogtsns mater. the caurs