The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1892-05-06
THE OREGON PACIFIC.
INJUNCTION CASE COMES UP.
fmportant and Interesting Litigation
Numerous A afdavfts.
IFrom the Daily Orcgonian. /


Pacific railroad against Colonel T. Egenton
Hogg, z Job and WILLIAM Mackay, sheriff
of Benton county, came up for hearing i'll
the United States circuit court last Monday,
on an order to show cause why an injunc-
tion should not be issued to prevent Job, as
purchaser of the Oregon Pacific railroad at
the foreclosure sale, from transferring the
property to any other company that may
be organized, contrary to the terms of
the agreement between the bondholders
and the present company.
The complaint in this case was filed iii
February last. 1t sets forth that after the
decree Of foreclosure of mortgage ordering
the sale of the Oregon Pacific railroad and
its property had been entered, April p,
1891, there arose between certain of the
bondhollers dispute as to questions of
priority of payment out of the proceeds of
said sale, aud the paramount equities
claimed by one class of bondholders over
the other classes, and suits were threatened
to set aside this decree of foreclosure. In
addition to this there were other conten-
tions and differences between the bond
holders, and various meetings of the bond
holders were held in New York city, and
such proceedings were held that in October,
1891, at meeting at. which nearly all the
bondholders were present, a committee
was appointed to formulate plan of reor.
ganization, whereby the corporation rail-
roads-the Oregon Pacific and Willamette
Valley & Coast railroads-might be reor-
ganized for the benefit of the bondholders,
and the property of these defunct railway
corporations, in case the railroads proper
ties and franchises did not sell for sum
sufficient to pay their bonds. interest, costs
aud expenses of the suit, might be saved to
them, and for their just benefit in proper
tion to the amount of bonds held by each.
1t was also agreed that the bondholders
would surrender their bonds to some person
or corporation mutually to be agreed upon,
and abide by the terms of the agreement
and plan of reorganization reported by the
committee aforesaid.
The complaint further charges that tor
the purpose of inducing the bondholders to
accede to the terms of this agreement, Col
ouel Hogg represented and stated that he
had secured purchase for sufficient of the
bonds of the proposed reorganized railroad
to pay off the floating debt of the old com.
panies and complete the road, and that he
had secured the aid of parties financially
able and willing to advance money to COM
plete the road under the new scheme of re
organization, and the old bondholders there
after would receive their proportional part
Of new bonds to be issued on said reor-
ganized railroad in return for payment of
the old bonds paid by them.
In order to carry out this plan and ar
rangsment it was agreed that the property
should proceed to sale under the decree al.
ready entered. 1t was also agreed that
Colonel Hogg should either in his own
name or should procure some other person
to appear at the sale, and to bid upon the
railroad property belonging to these corpo-
rations. for their joint interest and benefit,
and if the same should be sold to the said
Hogg or such person as he should designate,
that the purchaser should hold the same in
trust for the joint benefit of all the bond
holders, including Colonel Hogg.
Accordingly on January 90, 1892, Zephin
Job, at the request of Colonel Hogg, pur-
chased the property for the sum of 1000,
900, and these plaintiff bondholders, rep
resenting about $1,000, 900 of the bonds,
now say that Colonel Hogg threatens to
disregard the agreement between himself
snd the bondholders, including plaintiffs,
and now threatens to organize a new com.
pany, leaving out the plaintiffs and other
bondholders, and also threatens to have The
property transferred to the new company
in fraud of the rights of plaintiffs and other
bondholders with whom the agreement was
made.
The plaintiffs also claim that Hogg has
consplred with Z. Job to make an assign
ment of all his interest in all the property
bid oft by him for the joint interest of the
bondholders to some new corporation to be
organized by Colonel Hogg, or some person
whom he may suggest, for the purpose oi
defrauding all the boudholders and exclud
ing them from participating in the proceeds
OF the sale. They also allege that Colonel
Hogg threatens to execute new mortgage
on all the railroad property for the full sum
OF 70, 700, 600, which mortgage is 70 be the
first lien upon the property of the railroad,
In fraud of tine rights of the other stock.
holders. They also claim that the receiy.
er's certificates. to be allowed in payment
for the road, were to the amount OF $780,.
900 fraudulently issued, and the bill asks
for reference to determine their validity.
The bill also states that plaintiffs are ready
and willing to carry out the agreement OF
reorganization in good faith.
Wherefore, plaintiffs ask that Job and
Hogg be enioined from demanding or re-
ceiying from Sheriff Mackay the certificate
OF sale, or, if it is issued, to restrain them
from assigning the same to any one, and ask
that, on final hearing of the case. the
court will declare that the said Job pur
chased the property for the joint benefit ot
the plaintiffs and other bondholders, and
declare trust in their favor and to ordel
and declare that Job and Hogg shall prop
erly take and assign the said certificate o
sale or other evidence of title to whomevel
the court may appoint to receive it.
Colonel Hogg denies that he ever mad,
any threat to procure job to transfer tn
property to any other company, and claim