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

Col. Hogg. at a meeting at which he was
not present, III respect to an agreement
entered into by him concerning the
organization, at a time when
no plan of reorganization had
been agreed upon, does not anywhere allcge
that the defendant, Hogg, agreed to advance
the purchase price upon the delivery OF the
sheriff's deed The affidavits of Messrs.
Smyth and Keim show clearly that the
object.in securing the foreign capital was for
the purpose ofpaying the receivers indebted :
ness and other lcharges existing against the
property, and of furnishing the money neces :
sary to complete the purchase and extend the
railroad, Mr.. Smyth's statment being that
Messrs Keim and Hazard had a confer
ence with Colonel Hogg and gentleman who
was stated to be the representative of foreign
capita lists, who had capital seeking invest
ment, and who would advance the money tC
pay the receivers Indebtedness and other
charges now existing against the property
and to furnish the money to complete the
road while Mr.. Keim, in his affidavit
states that the foreign capitalists are prepar-
ed. if the company should be reorganized up
on the basis Indicated by him Colonel Hogg,
to purchase enough of the new issue OF bonds
to pay for the receiver and the completion o1
the road.
HIn the same affidavit, Mr.. Keim makes
this statement: The plan, as drafted, was
based entirely upon the representation that
the foreign parties had substantially agreed
to take enough of the bonds to make the cash
payment, estimated at ABOUT 81, ,0O0, coo, anc
to complete the road In other words, while
the commite expected to obtain the amount
81. h.
foreign capitalists, it here plainly appears
the fact actually was, that this money was te
be advanced upon thesbonds of the new com
pany, thus leaving necessary interval be-
tween the time of the completion Of the sale
the conveyance of the property to the new
company, and the issue Of its bonds.
''This is also apparent in the attldavlt o
Mr. James A. Blair, who states that in.
formed him that Colonel Hogg had assured
me that he had concluded arrangements with
some syndicate of foreign capitalists to pur.
chase the new bonds to be issued under the
plan of reorganization and thereby secure
sufficient funds to make the cash payment on
the purchase of the road, etc. Mr.. Blair here
falls into the same error as the .complainants
in not perceiving that the purchase price
would have to be paid before the new bonds
could be issued and consequently that there
would have to be a Temporary loan secured as
a prior lien upon the property, until the new
Company could be formed and take title to
the property and issue the new bonds"
LEGAL AUTHORITIES.
When Mr.. Paul r. Deadly had concluded
the reading of the affidavits for the defense
he stated that he wished to adduce somt
legal authorities on the subject, and read
several extracts from the books bearing on
the case, and finally asked that if the in
junction asked for were not granted the wri
be dismissed, as, if it is allowed to proceed
it will prevent Colonel Hogg from carrying
out his plans for raising the 81 ,00O,O 600 anc
reorganizing the road, and will be pref Judi
cial TO the interests Of all concerned.
FARMERS LOAN AND TRUST COMPANY.
Then Mr.. j. r. Bryson. of Corvallis, pre-
sented a petition on behalf of the Farmers
Loan and Trust Company, who, as trustee TO
all the bondholders, propose to intervene il
the suit. Hcspoke at some length, and quot
ed authorities in sepport of the right OF tht
company to intervene and have these pro
ceedings dismissed. and to induce the oppos
ing factions Of bondholders to settle their dis
putes.
He though. the stipulation which had beer
prepared for signatures by Hogg aud Jo
and by he Farmers Loan and Trust Com
pany, defining the conditions tor dismissin.
thes4. proceedings, should be satisfactory I,
all concerned and ought to pave the way IA
! resumption of work on the road, as we'll u
for the payment fall the obligations OF tn
| receivership.
THE STIPULATION.
The gist Of the stipulation proposed is Il
follows:
| That, in consideration of the Farmer
Loan and Trust Company retaining frott
moving to set aside the sale, which it nov
stipulates to do, and in fur her consider,
ton of the dismissa on May 2, 1892, Of th
Lindley Smyth suit with the consent ofth
plaintiffs therein, and the withdrawal anc
termination ofa litigatioms brought agains
said Zephin Job for the purpose of prevent
ing the completion of the sale, he tJob
stipulates that thereupon, and if 10 other lit
igation is commenced, he will hold all th
property purchased by him at the said sal
and nvey it to Il new company to be formed
| for that purpose, which shall issue the securi
| ties provided for by the reorganization
| agreement. without any further modification
| than that he shall be ut liberty to hypothecat,
| the said property so purchased for sucl
| amount as may be necessary to provide tn
| money to be required to complete the pur
chase, 81 600, 900. and to pay al claims exist
| ing against the property at the time OF its con
| veyance to the new company, including tn
| expenses connected with the sale and reor
ganization, together with interest thereof
| from the time the same is paid, the said Jo
/ or said new company to be at liberty to ny
| pothecate the. said property as security TO
| such additional sum as may, in the opinion o
y majority of the reorganization committee
| with the concurrence of the directors of tn
new company, be advisable for the purpose O
| paying anv amount equitably due, forming s
lien on any property Of the con,bany, purch
asing steamships and other necessary equip
ments, extending the railroad, this additiona
sum, however not to exceed $1,000, 900; ant
| that the said property shall be released from
| the lien ofany such hypothecation as soon a
a sufficient sum for that purpose can be OBJ
as provided by the terms Of the reorganiza
] ton agreement under the first mortgage TO
| SIS ,0O0, 600 and the second income mortgage
! for SO, 100000.
The case has been argued and is now un
der advisement.