St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-01-26
A COURT SAYS STOP!
MeSSaba Railroad and Iron
Kings Enjoined by Judge
Nelson
From Carrying Out What w.
L. Brown Says Is a Big
SWindle.
The Chicago Man Claims He
Is to Be Euehred Out Of
a Million,
And That the Others Are Pre-
pairing to Corral Stock
Illegally.

y
William L. Brown,of Chicago, is after
the directors of the Duluth, Messaba d
Northern Railway company aud several
persons who had a contract 10 build
section of the road in st. Louis county.
Mr.. Brown practically charges the di-
rectors of the road with being NapoleOnS
of finance. and has whetted his knife
and started in to chop his way INTO GER
tam deals. With this purpose in view,he
has placed the United States circuit
court at his back. 1t is claimed by
Mr.. Brown that the directors have ac-
Quired 100000, aud even much more i'll
stocks and bonds without returning
quid pro quo. The board of directors
of the Duluth, Messaba & Northern
were to hold a meeting on Monday in
Duluth to dispose OF a large block of
stock below par. Mr.. Brown, through
Lusk, Bum and Hadley. attorneys of
this city, prepared voluminous bill of
complaint, and went before Judge
r. r. Nelson, OF this city, and
securedE temporary injunction.
which was served on Monday and made
returnabe at the federal court house
in this city at 10 a. IN. today, when
motion to perpetuate the injunction
will be submitted. The defendants
named are the Duluth, Messaba a.
Northern Railway company, James L.
Hale. s. r. Payne, Roswell II. Palmer,
Alfred Merritt, LeOnidas Merritt, G. c.
Merritt and NJ. ID. Merritt, of Duluth;
K. ID. Chase, Albert S. Chase and Don
aid Grant, of Faribault.
By the temporary injunction issued
Monday by Judge Nelson. Messrs. X.
D. Chase, James L. Hale, S. r. Payne,
Roswell I'll. Palmer and the Merritts as
directors are restrained from voting,
selling, assigning or transferring any
stock held by them in the railroad
named, which was originally issued i'll
consideration of the construction of the
railroad, and are restrained from par
ticipating as officers or directors or
agents of the railroad or any other way
forwarding or assisting any issue, sale
or delivery by the railroad company any
of its corporate stock without the cor
poration receiving par value therefor.
The directors named are also ordered to
appear today and show cause why they
should not be enjoined from doing the
things complained Of.
Story Of the Case.
The story told in the complaint at
great length is in substance as follows: |
The Duluth, Messaba IL Northern Rail |
way company was incorporated May GO, |
1891, with a capital stock of S5.000,000 |
The road was TO run from some point on |
the navigable waters of Lake Superior, |
or st. Louis bay of the st. Louis river,
or some point Oh constructed |
railroad connecting with the wa
tiers named - taking northerly
course. the road was to run to the
nOrtherly boundary OF the state of Min
nesota On Feb. Is. 1892. bonds were
issued to the extent of S1,30G,000. paya-
bic in gold of the United States coin
bic in gold coin, at the rate of per
cent. The company then proposed to
build section of road from near the
mouth of Artichoke river, ill st. Louis
county, and extending in northerly
direction to the property OF the
Mountain Iron company in section
8, township IS north, OF range Is west
in st. Louis county. On Jan. 90, 1892,
the railroad company entered into an
agreement with the Mountain Iron
the Biwabic Mountain Iron
and Donald Grant, by which
part Of the road was to be built. BY
this contract it was agreed that the di-
rectorS of the railroad would issue first
QUO, upon which the interest was
to be guaranteed, and $945O00 OF
paid-up common stock. These shares
of stock were to be guaranteed.
Then the Mountain Iron company and
the Biwabic Mountain Iron company
were each to issue bonds in the sum of
S2OO.OO secured by paid up stock. The
stock and bonds were to be placed III
the hands Of trustee to secure the pay
ment of the contractor for building the
section of the railroad. Then on
Jan. 30, 1892, Foley Bros. IL
Guthrie, who are railroad COLI
tractors, and Albert S. Chase joined
with Donald Grant TO construct the road
!
pany. By the terms Of the agreement
by which the bonds and stock we're
placed in the hands Of the trustee, the
company was to furnish
the money to construct the road, as
agreed by Donald Grant and the rail-
road company. 1t was agreed that the
company was to receive
1900, 900 face value of the railroad !
bonds of the first mortgage issue
1888, 3}3 of the face value of paid-up
common stock Of the railroad company,
5000, 900 of the fully paid-up common
stock of the Mountain Iron company,
and 5000, 900 face value Of the fully paid
up stock, of the Biwabik Mountain Iron
All this stock was to be de-
ivered for the construction OF the rail
road. The Chases were to furnish three
ifths of the money for doing the con-
structIOn.
Browns Interest.
The way that William L. Brown, OF
Chicago, got mixed into the matter was
through Foley Brothers and Guthrie.
These gentlemen received one-fiith of
he stock ana bonds, namely, they re-
,elVed S240,U00 of the firSt-mOrtgage