Capital journal. (Salem, Or.) 1893-1895, 1893-09-16
The Suit Against Willard.

John Swope, of Pennsylvania, one of
the stockholders of the Northern Paci.
fic Railroad Company, on behalf of
himself and other stock holders, has be-
gun an action ia the supreme court of
New York against Henry Willard,
Charles l.. Colby, Colgate Hoyt, Ed
win H. Abbott, of the Northern Pacific
railroad; +. F. Oakes, Henry g. Rouse,
Henry {. Payne, its receivers, and the
Chicago & Northern Pacific Railroad
Company, to compel the individual de-
PENDANTS TO make restitution of millions
of dollars which, it is alleged, the
Northern Pacific company was deprived
OF ny means of fraud. The complaint
alleges that Willard, Colby, Hoyt and
Abbott, In September, 1889, owned land
at Harrison street and Fifth avenue,
Chicago, upon which was then being
constructed the Grand Central passsen-
ger station, and also controlled the Chi
cago q Great Western Railroad Com
pany, the Bridgeport & South Chicago
Railroad Company, and the Chicago.
Harlem d Batavia Railroad Company,
which operated lines of railroad within
the limits of Chicago. The value O
the land mentioned and the railroad
properties was said to have been So, ,OOO,-
900 in March, 1890. Swope charges
that these four men, in September, 1889.
conspired to defraud the Northern Pa
chic company by selling 10 it, through
themselves as directors, all of this Chi
cago railroad property and land for
price ia excess of its value so that they
could make an exorbitant profit to
themselves personally in fraud of the
Northern Pacific company. BY the
scheme they received about SIS, 800 900
For the purpose of Disgusting the
conspiracythe Chicago & Northern Pa
cific Railroad Company was organized
oy Willard, Colby, Hoyt AID Abbot in
November, 1889, with capital stock OF
$4,000, secured by mortgage on the
property of the Chicago & Great West
ern Company. 1t is alleged that $19,-
$4,000 bonds were delivered to the four
men in question in payment for the
different properties mentioned, and
their shares of capital stock in the
three railroads in Chicago were assigned
to the Farmers Loan & Trust Com
Pany as the Trustee. Willard and his
associates then made to themselves, as
owners and in control of the Wisconsin
Central Company, a lease of SO years of
all property of the Chicago & Northern
Pacific Company, subject to lien of
$50, 1000, 900 mortgage and other out
standing mortgages. Then the Wis
consin Central was leased to the North
ern Pacific on mortgage for SO years.
Willard was then chairman of the
Northern Pacific AID two of his associ-
ciates were directors. This was ar
ranged so that in addition to a profit of
$40, $50, 900 already realized by them ON
the bonds, they would be entitled to
about one-third of the profits derived
from the operation of the Chicago &
Northern Pacific so soon as il became
self supporting. The purpose of the
suit is to have them restore to the
Northern Pacific, or the Chicago &
Northern Pacific, $40, $50, 900 of bonds
and 94,25O shares of stock obtained for
their Chicago properties. An account
ing is sought at fair market value OF
the property at Harrison street and
Fifth avenue, Chicago, and also of the
three Chicago railroads. After deduct
ing 81, ,049, 900 0encumbrances upon those
railroads, the petitioner asks that Vii
lard, Colby, Hpyt and Abbott be ad-
judged to deliver to the Chicago &
Northern Pacific all bonds of the com.
pany received by them in excess of
fair market value of the property. He
also asks for an accounting of the sum
OF money contributed by the Northern
Pacific to the Chicago IL Northern Pa
cifie for the payment of interest on the
SSO,OOO,OOO mortgage, aud to pay for
94,S5O shares of the capital stock of the
Chicago d Northern Pacific received by
them Mt its par value.