New-York tribune., 1896-09-01
THE MANHATTAN TRUST co. SUED.
WRONGDOING AND FRAUD CHARGED
IN CONNECTION WITH WESTERN
RAILROAD BONDS

Elbert H. Hubbard assignee for the benent OF
creditors OF the Union Loan and Trust Company, OF
Sioux City, Iowa. and John Pierce and r. j. Chase
in behalf OF themselves and other persons
have brought suit In the United States Circuit
Court against the Manhattan Trust Company. OF this
city, and the Wyoming Pacific Improvement Com
pany. alleging wrongdoing and fraudulent trapsac-
tons upon the part OF the defendants In connection
with the hypoihccation of certain first mortgage
bonds OF the Nebraska and Western Railway Com
pany, issued account OF the construction Of the
section Of railway from Covington to O'Neil. Neb
The bonds II Is asserted subject to first lien
in behalf OF the plaintiffs and other subscribers 10
the construction fund and the court is asked to caus,
the Manhattan Trust Company to account to the
plaintiffs for bonds and stock hypothecated.
The complaint recites that the Wyoming Pacinc
improvement Company incorporated In
March. 1883. and reincorporated in March, 1882
with a nominal capital OF s3.Oo0OOo. for the pur-
pose of constructing and equipping line OF rail-
way from Covington Neb.. to Salt Lake City or
Ogden Utah, a distance Of $50 miles, and that
the Manhattan Trust Company actively partci-
pated In the project. The only part Of the road
actually built the section from Covington to
ONei The plaintiffs alleee that they and others
became subscribers to the construction fund for
the building of the road the amount subscribed
In Sioux City alone being sS3750o. The Manhattan
Trust Company, the complaint. became
financial agent of the syndicate. controlling the
Improvement Company was delivered to the Man
haitian Trust Company in trust for the subscrib-
ers II is alleged that Francis 0. French. who
was one OF the promoters and directors OF the
Improvement Company. with the aid or George
r. blanchard and Edward +. Gedney. secured
control of the stock of the company and elected
officers of their choice. French for three
years was president OF the Manhattan Trust
Company. while at the same time his son, Amos
T. French, was secretary and treasurer OF the
Improvement Company.
In 1880 it is alleged through the procurement
or connivance of the Messrs. French, bonds OF the
Improvement Company 10 the amount OF NtVu~
were issued and hypothecated with the Manhattan
Trust Company secure loan OF 81 ,oopgr SUP
sequenty. In the same year. all the bonds OF tne
improvement Company. amounting TO sZ,9ShoW,
We're again hypcthecated 10 The Manhattan ! rust
Company to secure loan of 100000. II Is alleged
that Francis O. French received a commission OF
2is per cent these transactions.
The plaintiffs assert that. having paid their sub
scriptims they entitled 10 receive ccrtih-
Gates and receipts for stock and bonds, they be-
ing held I'm trust by the Manhattan Trust Com,
pany but In spite of this all OF the stock and
bonds hypothecated sold ont in 1899. and
passed into the possession of various persons un-
known to the plaintiffs. These transactions, II Is
alleged fraudulently concealed from the COM
plainants by the Trust Company. The Improve
ment Company became insolvent: the railway IT
built has been sold under mortgage foreclosure,
ard the plaintiffs. they say. have neither their
money the bonds and stock they bought
with IL.