The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-06-10

Creditors Will Get the Wash
ington Southern.
HOPKINS OBJECTION FAILS
Judge I.anghorne Declares Lowman's
Purchase Good and Hopkins Bid
Not in Good Faith.

The protest entered By Ralph Hopkins
against the confirmation OF the sale Of
the Washington Southern railroad 70 j.
L.. Lowman was brushed aside with
small ceremony by Judge LanghOrne. OF
Chehalis ard Mason counties. who made
some severe structures on the conduct OF
Mr.. Hopkins. and confirmed the sale.
This proceeding disposes Of the ltiga-
tlon IN which the road has long been in
volved and opens the way for putting II
on a sound financial basis by wiping out
all old claims against II.
After the controversy al the sale az
Shelton, when Ralph Hopkins made
hid of .pe4 which was rejected by Re
ceiver Isaac Dobson. the matter was
taken up al MonteSano before Judge
Irwin Langhorne. of Mason and Chehalis.
The purchaser. J. y. Lowman. moved the
court for confirmation on May 81, pre-
senting a stipulation TO that effect from
all the parties OF record. Mr.. Hopkins
protested as a bidder against the con-
firmation. His objections set up fraud
in the sale on account of collision be-
tween Dobson. the receiver. and ]. ID.
Lowman. r. r. Spencer. Lester Turner
and their attorney. + \. Bausman. His
claim was that his hid. being the highest,
should have been accepted. while the pur-
chaser claimed that he was a bidder in
bad faith and had refused. after repeated
requests on the receivers part al the
sale, 10 give any tender of payment or
assurances OF his ability 70 carry out the
bid. whereas Lowman had made his bid
good at once. AS the affidayits of Mr..
Hopkins made some very strong charges,
the court decided to give him a hearing.
but required that If he still insisted that
the property should have been knocked
down TO him fer $50 coo, he should make
deposit before the hearing and within
three days OF $1,000. so that if the court
decided to accept his bid that sum
should remain in the possession of the
court pending the hearing as a pledge OF
good Earth. On failure TO give this pledge
he was not 10 he heard. BY the terms of
the order the deposit could be made either
in cash or in the railroad bonds. of which
Hopkins claimed 10 be the owner of five.
This deposit was not made by Hopkins
but on his failure to make il the court
still gave him a hearing and took the en-
tire charge of fraud and of the bid
under consideration.
After full hearing and argument the
court, without leaving the bench de-
cided that the sale to Lowman was per
fectly fair and regular. that the charges
of fraud We're not sustained that Hop
hlns was not bidder in good faith, and
that the right of Lowman TO a confirma-
ton of sale was sustained by large pre-
ponderance of testimony
The evidence of the case disclosed that
In the latter part ofSIarch a reorganization
agreement had been signed and printed in
winch theHopklnseS were recognized. They
were at first allotted four bonds and sub
sequently five. of the class allotted to the
National Bank of Commerce. These
bonds In the old company were first
mortgage, subject to the receivers GER
tifcates- The various banks signing the
reorganization agreement were creditors
~ he
certificates to the extent of about $780,
and they had agreed TO bid up to this
amount at the sale and allot themselves
as We'll as the Hopkinses and Others
bonds in new company 10 be ORGANIZED
after the sale. The charge made against
the Hopkinses in the present litigation,
which the decision of the court would
seem to sustain. is that in spite of many
interviews with MIR, Bausman and the re-
organization committee before the sale
they gave no notice of their discomfort
with their share OF the new security. but
knowing from the agreement, of which
they had been given a copy. that the
committee was ready 10 bid up to Sl50.000,
they decided suddenly TO appear as bid
ders and to force the committee by straw
bids 10 run the price up high enough to
ohlige 1t as a purchaser. through Low
man, TO pay the Hopkinses bonds in cash
In this way the Hopkinses would get
cash, while the other bondhOlders would
have 10 take new bonds and wait until
the road could pay them off. The re6r-
sanization committee. however. stopped
the bidding, and gave Hopkins an oppor
tuuity 10 make his bid good.
The effect of the present decision is
that the Hopkinses. not having accepted
the new bonds under the reorganiza ton
plan, and not having been apparently
able or willing to make their bid good
and acquire the property. have probably
lost their entire lain against the road.
The reorganization agreement was put in
evidence. and WIS pronounced by the
court to he substantially just and fair.
In refereuce to the amount bid by Low
man. 5000, the court decided that the
value of the railroad was always uncer-
tain and speculative, and that the sale
could not he set aside on the ground OF
inadequacy of price. and that while much
more money may have been already in
vested in It, yet q might require cousid-
cradle more expenditure to make avail
able 10 the line the necessary tracts Of
timber for traffic. The court did not
doubt that the road could be made to pay
hut did not believe that because the COM
mitee was willing TO bid Sl5000n on &C
count Of having that amount OF claims
against the road, the property was nee
essarly worth that amount, or that tho
committee would have been willing 10
give that amount as an original bid.