The San Francisco call., 1895-05-23
FINANCE ON A BIC RANCH,
Serious Charges by English
BondholderS Against an
Agent Here.
twas Worth 100000, and He is
Said to Have Got 1t
- IA Cheap.

A suit, involving the Laguna de Tache
or Kings River ranch, in Fresno and
| Tulare counties, comprising $1,000 acres,
was filed'yesterday in the Supreme Court.
The plaintiffs are the United Trust
| Uimited), the Liverpool Mortgage Insur-
ance Company, the National Insurance
and Guarantee Corporation Uimited) and
| the the Canadian and American Mortgage
and Trust Company (Limited), and the de-
fendants are the Fresno Canal and Irriga-
ton Company, S. ]. Menzies and others.
The object of the suit is to restrain the de-
PENDANTS from selling any of the lands in
volved and to have certain deeds and
mortgages set aside as fraudulent and
void.
The doings of one of the defendants, S.
j. Menzies, constitute the pivot of the
case. MenZ1es was an agent of the English
companies and used to visit this country
in the supposed interest of his employers,
but it is charged that he started in to
speculate on his own account and caused
the whole trouble thereby.
Itappears from the complaint that GER
tain foreign companies of which Menzies
was director, namely the United Trust
(Ld.), the Canadian and American Mort
gage and Trust Company (Ld.), and the
| Manchester Trust, were in the habit of
annually to report on good fields for in
vestment of their capital.
In October MenZies found that the
Laguna de Tache ranch was in demand by
the Fresno Canal and Irrigation Company,
having capital stock of ST. ,25O, ,OOO Two
thirds of the stock was held by DR.. E. B.
Perrin, the San Francisco and Fresno capi-
talist, while the other one-third was held
by G. G. Cheape. 1t is. alleged that
Menzies looked at the Laguna ranch and
hankered after it, and that while appar-
emily engaged in business for the plaintiff
companies he was seeking to acquire the
ranch for himself.
His first move in this regard was to pur-
chase from DR.. Perrin one-fourth of the
irrigation company's stock for $3.50 900.
This was in December, 1890. Then he
foated 81 ,OO0, 900 of the companys bonds
in London and purchased another one-
twelfth of the stock, paying in all $685.
33S 33, and then he, Cheape and DR.. Perrin
owned the stock in equal shares. Finally,
the .Laguna ranch was bought by the
Fresno corporation for $780, 900, realized by
the floating of the 81 200, 900 bonds by Men
zies, who then returned to England, send
ing E. Shorrock. confidential clerk, to
look after his interests.
Shorrock was apparently. made useful.
The Laguna ranch was made to stand in
his name, and the mortgages on the other
property of the Fresno Irrigation Com
pany,. given to secure the one million
bonds, did not cover the ranch. By this
arrangement the ranch, valued at 81 900,
600, was not incumbered, although it
had been purchased with the pro-
ceeds of bonds sold by Menzies in Eng
land and purporting to. be secured by all
the assets of the irrigation company. A
mortgage covering '.all'' the assets was
Trust Company for ST. 100000.
MenZies first maintained that $500, COO
had been devoted to the redemption of a
prior issue of $500, 600 in bonds, which had
never been sold, and in satisfaction of ex-
ipensive claims for water rights.
The English corporations found out
in 1892 that the mortgage securing the
$1,000,000 did not cover the Laguna de
Tache rancho and was inadequate without
that asset of the Fresno company. They
investigated and started action, but Men
zies persuaded them to drop litigation as
likely to cause the bonds to depreciate.
Menzies was apparently still unsus-
pected by the English companies and he
maintained that he would bring about a
settlement without publicity At this end
he apparently expected to arrive by driv-
ing DR.. E. B. Perrin, one of the three
stockholders, out of the Fresno company.
Perrin, according to the complaint, was in
debted to the company for water. of which,
as large landowner, he used a great
quantity. In order to derive an income he
was willing to sell out, and he was bought
out in October last by Cheape and Men
zies.
The former gave the late Colonel Harry
l. Thornton power of attorney and made
him president of the company. The i'm
mediate lever used to work Perrin out was
by refusing, in 1898 and 1894, to sell him
any more water. He only received $50, 900
cash for his one-third of the stock beside
release in full of the claims against him.
This last stroke of fnesse left Menzies
and Cheape in control of the Laguna de
Tache ranch, unincumbered, although
Fresno Irrigation Company bonds.
Now the English companies are suing to
have the big ranch included among the
securities Of the mortgage covering the
issue of the 81, 100000 bonds of the Fresno
Irrigation Company.