The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-03-25

these facts, IL u alleged. the Lake shore would
have earned enough 70 pay interest on ia
bonds, sinking fund CHARGES. taxes, operating
expenses and dividends on stock. but by reason
OF the contract the road has been operated by
the Northern Pacific at an apparent loss OF
SIS, 29a s. which sum has been added 70 the
floating debt and the value CT the stock being
destroyed and rendered worthless and the
plaintiffs deprived of their property represented
BY their stock
1t IL averred that although BY the articles OF
incorporation the company's principal place OF
business II located at Seattle. the Northern "a.
cifc and the board Of trustees have removed the
records to Tacoma, ST Paul and other places so
that the plaintiffs are unable to have access to
them or to ascertain the condition OF the cor
poration. 1t is further alleged that the COM
pany owns buildings and terminal grounds at
Seattle valued ct S2.0 600, but that aimee the
making OF the contract the trustees and the
Northern Pacific have taken control Of them
and used them for terminal purposes OF the
Northern Pacinc In Seattle without compensat-
ing the company for their use; that since this
contract was entered into the Northern Pacific
has caused the company's repair and work
shops at Boulevard to be torn down and has
caused the machinery to be transferred to the
Northern Pacific car shops near Tacoma Be-
sides this the Northern Pacific 10 accused of
having takea all the company's rolling stock
except two locomotives, without any compensa-
ton, for use upon its own lines; for new and
valuable locomotives belonging TO the COM
pany. IL is alleged that the Northern Pacific
substituted old and worthless ones.
It II also claimed that the Northern Pacific
Issues passes which the trustees have instructed
the company's employees to honor over its lines,
and that, through the connivance of the trus.
tees. the Northern Pacifict IL using the company's
property as its own without making any account
TO the company. 1t Is then stated that the trus-
tees of the Lake Shore are all officers OF the
Northern Pacific ard that they are acting at the
dictati0n OF the latter road in order TO depre-
ciate the value Of the property OF the Lake shore
and to render it insolvent 30 as to absorb it and
make il part Of the property OF the Northern
Pacific in disregard of the rights OF the minority
stockholders, and that they refuse to protect the
latter's interests. Tho trustees are alleged to
have permitted indebtedness of the Northern
Pacific to be charged to the Lake Shore and
earnings of the Lake Shore to be credited to the
Northern Pacific under this traffic contract,
whereas q true accounting would show that at
least $4,000 was due the company from the
Northern Pacific. Further, 1t fs claimed, the
policy of the Lake Shore is directed by the ex-
ecutive officers Of the Northern Pacific.
1t is claimed that owing to the relations Of the
trustees to the Northern Pacific they will not
revoke the contract nor prosecute any action
against the Northern Pacific: that it IL useless
to apply to the stockholders, as the majority OF
the stock is held by the secretary of the North
ern Pacific and voted directed by that COM
pany. In conclusion 1t 10 alleged that If the
Northern Pacific is left in possession Of the Lake
Shore the plaintiffs will be unable to present a
showing Of their rights At the trial. and that I'M
less receiver is appointed the trustees and the
Northern Pacific will continue to deprive it of
its earnings and to convert its property - here
tofore.
Wherefore 1t IL prayed that the Northern Pa
cifc be decceed to account foe aud pay to the
/ Lake Shore company its just share of freight
and passenger earnings since the making of the
trafic contract; to pay over all profits derived
from violations Of the rights OF tho company
and that 1t DO restrained from further violations
OF these rights, and from further operation Of
the road under the contract. An Injunction 10
also prayed for restraining the defendants or
their sgents from operating the road under the
contract and from interfering with the rights,
property and franchises of the company: also
that the property OF the company in possession
OF the Northern Pacific may be ordered to be re-
turned to the company; and that the Northern
Pacific be required to account to the company
for its share OF freight and passenger receipts
and pay over the amount due: further, that the
court annul and set aside this contract as fraud
ulent and void: and that receiver be appointed
TO take charge, control and possession OF the
company and operate 1t for the benefit of the
stockholders during the tendency of this action.
The affidavit OF Angus Macintosh alleges
that he is the owner of asa shares of Lake shore
stock, and proceeds to recte the organization Of
| the company under the laws of Washington,
with its principal office in Seattle It then re.
iates the provisions OF the bylaws as to the
number OF trustees, stating that under the
articles OF incorporation it was increased TO
| thirteen on June l6, lsSs. by an amendment to
the bylaws which has never been repealed, and
any or all OF the trustees may be removed and
Others elected in their places at Q special meet
| ing OF stockholders called for the purpose, but
| only BY two-thirds vote In amount of all the
| stockholders. It then states that in May, 1890,
\ . part of the stockholders, owning Sl.625l Z
shares out OF a total OF also, entered into
an agreement for the sale OF their
| stock to the Northern Pacific. among them
being several OF the trustees. and by reason of
their intimate business relations with other
trustees were able to control the action of a
| majority OF the trustees The provision OF the
contract tina. the stock should be placed in
escrow until it was fully paid for, and that
meanwhile the road should be operated a. d.
| rected by the Northern Pacific, is stated Then.
| IL is stated, meeting OF trustees was held in
New York on May 2s, 1880, which was not legally
called or held, as no valid meeting could be held
In New York state, aud no notice was given to
| any of the trustees except those who partici.
pated. Mr.. Macintosh goes on to state that
| Joseph Z. Cook and John H. Bryant were only
nominal stockholders. and tells of Mr.. Dicxin-
| sons appointment and OF the change In the by.
| laws to extend his powers, and of the max.
| ing OF the traffic contract with the North.
ern Pacific He also tells of the change
| in the bylaws reducing the number of trustees
and says that this action void, as the by
| laws provide that they shall be altered aud
amended only by majority of the whole mum.
Der OF trustees at regular meeting or at a spe-
ciai meeting called for the purpose. He speak 8
| Of the trustees as the Eve pretended trustees
and recites their connection with ;he Northern
Pacific. lie then recltes the increase In tho
business OF the road, which he believes Is ssy-
! erai fold greater than at the time when the con
| tract was made. but owing TO the removal Of
| the books and accounts from this city has no
| means OF ascertaining accurately what are the
! receipts and the amount of freight TRANSPORTED.
| He tells. however, OF the appointment OF the
stockholders investigating committee, quotes
from the committees report the statement,
that the books OF che Lake shore showed A larve
| deficit and then quotes the passage from the
| directors reply relating to the affairs o! the
Lake shore. " hich has already been puhlishea
| in tho fosT-iNTgLLidgScER He says that the
/ figures contained in these documents are tina
only precise information he 10 able TO furnish as
10 the profits. or what ought to be the profits OF
the road. He SAYS, however. that under the
| contract the Northern Pacific has appropriated
to its own accounts and deprived the Lake Shore
| OF its proper share OF revenue from throue n
/ rsfne; tina; in consequence OF this diversion
and of fraudulent management, of tho
accounts the books show q large defci,
| though on proper division of rates they would
show large surplus sufficient; to pay handsome
/ dividends. As another result of the divers ior