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

agreement fail to make any arrangement
for the procurement OF the 81, ,00O, COO ex-
cept by sale of the bonds of the new COM
pany after it shall have been organized and
its bonds issued whereas, under the de-
cree, the 100000 must be paid in i'm
medlately.
Judge Calkins and John P. Fay, of Seat
tie, appeared as counsel for plaintiffs, and
! +. c. Bronaugh and Paul r. Deadly for the
defendants.
THE TESTIMONY.
The testimony offered was entirely in the
form of affitlavits, of which each side pre-
sented large number, none of them very
| long. The forenoon was occupied in the
reading of the testimony for the plaintiffs,
and the reading of the affidavits for the de-
fense occupied the greater part OF the after
noon session.
| The plaintiffs fled afiidavits of J.indley
Smyth ami De B. Keim, stating In effect
that all the material allegations of the COM
/ plaint are true; tina. committee Of bond
"
meeting, to report a plan for reorganizing
the defunct railroads, and who did suhse-
iquently report plan whereby Colonel
Hogg was to purchase the Oregon Pacific
railroad and its property at sheriff's sale, or
/ procure it to be purchased at SAID sale by
some other person who shall hold it in trust
for the benefit of all the bondholders that
the purchasers at such sherfs sale should
turn over sheriff's certificate or deed to
new company to be organized under the
bondholders as their interests were made to
appear; that Colonel Hogg did get z. Job,
of Corvallis, to buy in the property at sher-
ifs sale for 81 LOCO, 900. The decree of the
court provided that no bid of less than ST.
100000 should be received, and that $25,
600 should be paid in cash before the sale,
as an earnest of the good faith OF the bidder.
This, the atlantis charge, was done, and job
acted at Hogg's dictation in the purchase,
and that H"gg was bound to purchase in
good faith for the benefit of all the bond.
holders.
They further allege in their afidavits
that $l4, 100000, par value of bonds out of
the 5000, 600 total, had under the reor-
ganization scheme been deposited with the
Farmers Loan and Trust company of New
York, and under the plan agreed upon be-
tween Hogg and the bondholders, the new
railroad to be organized was to issue $lS,-
100000 of bonds secured by mortgage of
all the property of the railroad, and an ad
ditional $4,000, 900 of income bonds was
also issued, secured by the net income and
property of the railroad, which new issue
was to be sold and the proceeds applied
first to the payment of the $40, 600, 900, and
second to the payment of such other neces-
sary costs in and about the reorganization
as might accrue, and third, to the extern
sion of the railroad easterly to the Cascades
divide, and for the purchase of steamboats,,
and generally to the betterment and COM
pletion of the road as originally contem-
plated that, in pursuance of this agree
ment, Hogg and Job deposited their own
old bonds with the Farmers. Loan and
Trust company, and fully consented to the
contract, but after Job purchased the road
at the sheriff's sale, he and Hogg both gave
out that it was not purchased and held for
the benefit of the old bondholders at all.
That Hogg about this time appeared in
New York and prepared to have Job trans
fer the title he acquired at the sheriff's sale
to new company to be organized, leaving
out the old bondholders, and proposed and
said that he would cause to be issued what
he called an interim mortgage, for 5000
900, and bonds secured thereby, which were
to be sold to all English syndicate and the
proceeds applied to the payment of the ST.,
100000 bid by Job, and the betterment
and extension of the road as before men-
toned, thus encumbering the property i'll
advance by permanent mortgage Of $5,-
600, 900, and which he proposed should be
taken up after six months out of the pro.
ceeds of the Sis, ZOO, 900 mortgage provided
for in the bondholders' original scheme; but
nowhere Gid he offer any security or make
pledge to the old bondholders that the $lS,.
600, 600 mortgage would be taken in time to
pay off the 100000 mortgage The
plaintiffs in this suit and other bondholders
objected to this new S., 900, 600 scheme as a
gross violation of the original contract and
brought this suit to prevent its consumma-
tion. N.
Samuel S. Sands, James A. Blair, John
Crosby Brown, Stephen III. Little and Sam
uel A. Stern all filed their afiidavits in sup.
port of one or more of the objections con-
tanned in the afidayits of Smyth and Deb.
Keim, as above set FORTH
Roswell G.. Ralston, president of the
Farmers Loan and Trust compay, files his
affidavit in regard to correspondence be-
tween himself and T. Job, which correspon-
dence shows that Job entered heartily into
the plan of reorganization, and deposited
the old bonds owned by him with that
company.
Robert johnson, of Corvallis, filed his
affidavit, stating the admission made by
Job and Hogg as to the purchase OF the
railroad in the interests of the bondholders.
John J.. Fay filed his affidavit to the
same effect, and also identified various cor.
respondence between certain of the parties,
and the reorganization plan as reduced to
writing by the parties, and various reports
made by the committee of bondholders at
their several meetings in regard to the pur.
chase of this property.