The evening world., 1894-05-12
SUIT FOR $4,000.
Manhattan Trust Co. and Amos
T. French Defendants.
Fraud Alleged in the Pacific Short
Line Deal.
Stocks and Bonds Said to Have
Been Illegally Hypothetical.

Suit was begun in the United States
Circuit Cour this morning on behalf Of
Gordon r. Badgeron n Charles Bruen.
of Sioux City, la. against the Manhat-
tan Trust Company. of this city. and
Amos 7. French, as an individual and
as AN executor OF the will OF his father.
Francis o. French, to recover $500, 900.
1t is alleged his sum was f~raudulently
hypothetical.
Messrs. Donald Mclean. Edward r.
Gedney and George r. Blanchard are
also conce ned with the defendants in
the action.
This suit, with accompanying charges
OF fraud, dishonesty and conspiracy to
defraud, grows out of the project, partly
executed by the defendants, to build a
railroad, to be called the Pacific Short
line. from Covington, Neb, on the Mis-
lake CITY, a distance Of $50 miles. 20
r4 rTa9e's p6 o.; hre mel.ea his E. Foni r.. A GeGne r;
the scheme, formed the Wyoming
Pacific Improvement. Company, with a
was invited to subscribe for stock for
building the first section Of the road
from Covington to O'Neill, 1923 miles. 1t
was proposed 10 nave a SSnulCate Ol cap
~itaists construct the remainder.
The plaintiffs say they were among
about nifty persons who subscribed and
paid 1854, 707,s5 to build the first section.
financial agent for the Improvement
and railway companies, and all stock
issued was delivered to the Trust Com
Pany, and the voting sSntro wSd
elected trustees and directors.
1t is further alleged that In 1880, with
the .c~onnivance Of French, all of the
bonds issued or to be issued to the I'm
provement Company by the Nebraska
and Western Railway Company were
hypothecated with the Manhattan Trust
p1%eany 'e seGsTs q Of i; 8, SOo t 'Soo, the At tm
wards, 1t is charged, all the stock Of the
Railway Company and the stock Of the
Improvement company were hypothe'
Gated with the Trust Company to secure
an additional loan Of $500, 900.
The plaintiffs and those who sub
scribed with them to the construction
fund. contributed more than $500, 900, for
to receive trust certificates for stock
and subscription receipts for bonds. en-
titling them to stock OF the Improve
ment COMPANY and first mortgage bonds
of the Railway Company. Certificates
of the par value of $3.50, o0 were made
and delivered.
lege, was made in violation of an agree
ment with them.
All the bonds and stocks h~ypotnecated
70 the Trust Company were sold OUT In
1899. and the sale, It is claimed, was
~fraudulentl!y concealed and not dis
closed till long afterwards.
The first section of the road has been
sold under a decree Of foreclosure; the
Improvement Company, becoming hope
lessly Insolvent in 1890. passed into the
hands OF n receiver. and has since prac-
tiCRllv ceased to exist.
They ask the court to decree that the
| first mortgage bonds of the Railway
Company. issued or account of the con
struction Of the first section. were sub.
ject to q lien on behalf OF the subscrib'
ers, and that these contributors become
owners as equitable assignees.
They also ASK the court to say that by
the hypothacation Of the bonds and
stocks, with the alleged fraudulent con
nivance Of French. the Defendants rem
dered impossible the performance OF the
subscription agreement upon the part OF
the Improvement Company.