The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1892-05-06

provisional mortgage should be made for the
So, 600, 900, the same to be paid oil out OF
the first proceeds of the SIS, 900. .O00 perma-
nent bonds to be issued by the new COM
pany, but he (Col. Hogg) suggested instead
temporary mortgage for $4,000, 600, hav-
ing term of three years, but with power
for the new company to pay it off out of the
first proceeds of the new bonds or at three
months notice, and draft OF such provl-
sional mortgage for $4,000, 900 was prepared
still making Mr.. Lindley Smyth's company
the trustee under it. A draft of the neces-
sary papers was taken to Philadelphia by
Mr.. Bentley and the affiant, the foreign gen.
tlemen having sailed for Europe to arrange
for remitting the money.
The meeting in Philadelphia took place on
February 6, 1892, Mr.. Smyth, MIR. keim,
MIR. Bentley and Col. Hogg being present.
Mr.. Smyth took two days to consider,
and then summoned these parties back to
Philadelphia, then declined the trust, not
obiecting to the mortgage. but suggesting
few verbal changes therein and proposing the
Farmers Loan and Trust Company as the
trustee. This not being satisfactory, mas
much as that company was intended to he
the depositary of the permanent bonds OF
the new company, they suggested the Man
haitian Trust Company instead. Mr.. Smyth
having stated that his company would have
been willing to provide the $1,000, 900, the
affiant, Col. Hogg, then and there proposed
that they should provide it. aid offered to
aid them by reducing the amount
needed by bringing In large
amount of receivers certificates and
gave them three days in which to determine
their action. But the next day, February g.,
Mr.. Smyth telegraphed, declining, and on
the day of atlantis arrival in Oregon, the
10th, to complete the purchase and carry
out the proposed arrangements, the aifiant,
Col Hogg, received notice of the filing of
the present suit in the United States circuit
court. The atfiant closes his affidavit by
appending copy Of the reorganization ag-
reement.
Aihdavits supporting this statement, and
stating facts sustaining these allegations,
have been made by Mr.. George S. Coe, Mr..
Thomas White, Mr. N. S. Bentley, Mr.. I.
n. Hazard and others. Perhaps the most
salient paragraphs in the affidavit of Mr..
George S. Coe, the president of the Ameri-
can Exchange National bank of the city of
New York, and member of the reorganlza-
tion committee, are those in which he uses
the following language:
WHAT GEORGE s. CoE HAS TO SAY.
81 am fully convinced that all difficulties
which have grown out of this sale have been
the result Of misunderstanding by the plain.
tiffs and misapprehension on their part
that Col. Hogg was seeking to secure some
personal advantage over them not in strict
accord with the terms of the reorganization
agreement; and that this misunderstanding
is the result of the failure to insert some pro-
VISION i'll the reorganization agreement for
the securing and payment of the cash re-
auired to complete the purchase.
1.-The decree of foreclosure and sale pro
vided that the property should not be sold
for less than Sl,000,O0O in cash J.; and the
fact that this sum would have to be paid be
fore the title could be taken in the name Of
the proposed new company, and consequently
before that company could issue any bonds.
upon which the necessary cash could be adj
vanced by the foreign representatives, is ap-
parently overlooked by the conplainants.
never heard of any of the members Of the
reorganization committee state or intimate
that Col. Hogg was under any obligations
to advance this sum of money personally.
As a matter of fact, he could not do so under
the reorganization agreement, as it made nc
provision for repaying or for securing the adj
vance which might thus be made; and l am
very sure that none of the bondholders ex
pected him personally to make such an adj.
vance. 1t was assumed by all that the pur-
chase money would be obtained from the
foreign representa-, es and that they had
made such assurances in entire good faith,
and were able and willing to carry them out
but as prudent business men, they could
not advance money on bonds which were
not in existence. That am correct in my
view of the matter is evident from the bill
of complaint and the moving affidavits
The complaint appears to have been verified
by John P. Fay, who, as 1 am informed and
believe, is a lawyer resident i'll Seattle.
WASH, and since the commencement of this
suit admitted to practice in the state of Ore
gon. He could have had no personal knoll
edge on which to base the allegations con
tanned in the complaint with reference tc
what took place in New York and Philadel-
phia in relation to the proposed reorganiza-
tion. Even the bill of complaint, which
contains allegations of statements made by