The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1895-07-25

Supreme Court Sustains Trans
fer of the Oregon Pacific.

On Monday last an opinion was handed
down in the Oregon Pacific case, which was
reported in Tuesdays Oregonian as follows:
In the supreme court today in the case of
the Farmers Loan & Trust Company, as
trustees, respondent, Us. the orrgon Pacific
Railway Company, appellant, on appeal
from Benton county, the Judgment
Of the lower court was affirmed, the o;ir:-
ion being by Judge Moore. After reciti'g {
the well known history of the case Ia is
various stages, and discussing adversely
various legal technicallties urged against
confirmation Of the sale. the court sustains
the action of Judge Fullerton, and then
comes to the final objection, the made
quacy of the bid, which is handled in the
following m INNER:
''The most important contention is that
the property and franchises offered for sale
were of the value of $1,000, 900, that the
rails. rolling stock and miscellaneous prop
srty alone, not including the land or build
ings, were worth $3.50, 600, and that the bid
Of 100000, is SO grossly inadequate to
shock the conscience and raise the Inference
of unfairness. fraud, mistake or surprise.
"The uniform holdings of the authori-
ties in Mariet VS.. Warwick, Is N. j., E.,
settles that mere inadequacy of price,
where the parties stand on an equal footing,
and where there are no confidential relations
between them is not of itself sufficient to
set aside sale, unless the inadequancy IS
so or oss as to furnish proof of fraud, or to
shock the judgmnt or conscience. In the
case at the bar, it is not claimed that the
that there were any confidential relations
existing between them, or that there is any
proof of fraud, and hence the inadequancy
sufficient to set aside the sale must be so
gross as to shock the conscience
"We have examined the transfer before
US in vain to find any evidence of the value
of the said property and franchises. The
receiver, upon his appointments. made an in
ventory of all that came to his possession,
but he does not appraise single article or
give value ia gross, except of soms unusual
material on hand. There was no evidence
before the trial court of the value, and it
would be extremely difficult for us to con-
cIude that the bid was inadequate, until we
have some evidence upon which the conclu-
sion can be based. 1t is said that some sx-
perts were appointed by committee of the
bondholdsls to examine the property and
appraise its value, but we cannot find that
thoy were ever appointed by or made
report to tha courts upon this important
subject. 1t does appear, however, from the
report of J. W. Whalley, who was appointed
referee to take account Of the receipts and
expenses of the defend ant company under
the receivers management, that for the
period of about IA months prior to January
l, 1892, the lines OF railroad and tho river
and ocean steamers connected there
with had been operated at total loss of
SS7, 1888 IS, S62S4 45 a month; that the re-
ceiver had, prior to said date. issued Ger.
tifcates amounting to S638. .04l 29 and that
total liabilities, June 80, 1882, were $685..
Ala 40, less S3S S36 Sc. which Was available
in part payment of that amouat, thus show
ing total indebtedness at that date of SS67,
5S7. .54 beyond the bonded Indebtedness of
SIS, 600, 900 and interest, which were secured
by mortgage. How much this debt was in
creased from June 80, 1892, at which time
the referee made supplemental report, to
December %, 1894, when the sale occurred,
the record does not show, brt-is was admit
ted IN argument that an indebtedness of
more than 81 900, 900 had been incurred
by the receiver since his appointment, Octo-
Der %, $780,
"Viewed in tho light Of business ven
ture, and not considering the amount neces.
sary to be expended for bstternent, prop
erty which was operated at total loss of
over Sc 600 per month does not it must be
conceded, present very inviting field to
capital: and while the amount bid for the
property may be grossly inadequate, we can
not say that it is so, in the absence of any
evidence as to It's value; and considering
that no sum in excess of that amount has
been offered by any one. 1t is indeed unfor-
tuuate that the expenses of the manage
ment of the property cannot be realized
from its sale. No oae can examine the
record before us without being impressed
with the conviction that the trial court has
labored long and earnestly to accomplish
this result, but without success, and to con-
tinue the operation of the road under the
management of receiver would result in
further expense, which must be borne by
those who can i'll afford to add it to their
| present Losses.
'Ths court, hoping the bondholders would
| by reorganization buy the property and pay
off the expense of the receivers manage.
ment, fixcd the minimum price at 81, 600,
900, and at another tims $l,25O, 900, but
was unable to effect sale on these terms,
and, after waiting more than four years for
the consunmation of its hopes, found tbs
illusion dlspslled. The only remedy remain.
ing was to sell the property for what ii
would bring; which, having been done, the
sale was confirmed by court acquainted
with the property, and must have known
it's value. We can, in the absence of any
evidence as to the value, do nothing more
| ha dacraa which ic or ordareJ