New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-09-09
FRAUD IN A WATER DEAL.
JOHN r. DRAKE WINS HIS SUIT AGAINST
THE, NETWORK SUBURBAN COMPANY


Justice } o. Dykman, In the Supreme court. mas
handed down a decision In the case OF Johh ~
Dr,Lo ara,rst the New-York Suburban water
Company which has been in the courts Tor some
time In his opinion the Judge says: ne ~ o
upon which the issues have been decided arc
that the plaintiff has succeeded py ass's'''''
70 all the rights OF the owner OF ten SHARES Oh
tho initial stock OF the New-York ana Mouh'
Vernon Water Company a corporation Organic
under chapter 40 Of the Laws OF 1sS TO supply tie
village Of Mount Vernon with water. Al '''
nroperty OF that company was. on the l''h VA! "
June 1892 transferred upon the consohuauoh "a
that corporation with another. also orgaih~eu va,
der the same statute for the same purpose WIN
81 600 capital called the New-York CITY Supu' oa
Water Company The latter company hdu oi'i'
q formal existence created by ana uhue' '
troll of the persons engaged in the ilegaI scneiI.
totno,tor described and to effect the object
thereof u,.,o,
..The company resulting from the CONSERVATION
took the latter name and the possession anu -,
troll OF such property. The consolidation wa"
fected in pursuance OF fraoouiehl anrora,ion
bv the property OF the first mentioned coi ,"s
r+,ou+ compensation to its lawful stocKho'ue''
should be- and It was accordingly 9 ooo 20
the apparent lien Of q mortgage ior Si'' M,
cuted before consolidation by the orlsr, a ~,
york civ Suburban Water Company Inc ho'o
ers Of valid stock IN the frst-naneu oo.t -.
,.,,,a,ro nIa,nt,Ts assignor did not assent w.
and resisted the consolidation anu l' &C.
been paid for their interest IN inc s,ock
sets The consolidation was eHectu -. o,d
vote upon invalid stock OF 'he wy" ond COW
Mount Vernon Water Company, procureu anu -
,round FOR tho purposes Of the fraudulent Schei''
nv the members of the firm OF comm " nnn a,
Thereupon bonds to the amount Oh si'-'VV 49,.
nv clerks Of Coffin Stanton. III '"' Ct,,.
Dvrnose made president of the New-h orR W!
pu, Wo.or Company issued against the
,ortgage 10 that firm without conslder"''o' VI"
bonds being issued at least 10 ."e -,
ssoo ooo as collateral security Tor 'he nm =,
$50 no,es No consent Of the stocKhoIuciS u
the corporation resulting from ss nCi
~ said mortgage was given or nv" ~ foreclosure OF
I'd non the failure of that hrin ., - tho first
-, IPo, co against the property OF t'e 80,
the mor. ernoraaion was effected upon requcs,
addressed to H NE ETb as receiver of Coffin
e. Stanton based upon the bonds obtaheTT re-, a., en-
said and upon co STsoe Of action and
Judgment by the president OF the hn acted under
pSra onro one Of Of con Stanton and Of said re-
ceiver Said judgment directed a t sH ~ and did
bd in the property against their bonds subject 10
all prior claims and liens . Lney tbe SewYork
Suburban Water Company which now mo-, n6Ids oo III;
Said company and all persons IN tnoHiedss of the
There no valid liens upon Sond te Of the
as s MoS of T Vernon 9o
and $500 Of third mortgage bonds OF aat COM
pany has been duly served with process ana mas
SUFFERED default herein. and plantn is entitled 10
Judgment by default against !hdt CoiiP""' 'P''
ali the allegations OF the complaint.
THE plaintiff is entitled to have his interest IN
tanned bv n sale thereof. and TO receive ten one
hundred and forty hfths OF the proceeds.
None Of the holders of the capital stock OF the
aforementioned company is entitled TO share In
such proceeds except the plaintiff and II may be,
the holders OF hundred and thirty-ive other
shares: but the holders OF such shares. which are
apparently invalid. cannot be concluded. and the
entire controversy cannot be finally determined
without making such holders parties, which the
plaintiff should have leave to do. by amended sum-
supplemental
In closing. the Judge appointed John NJ; Digney.
OF White Plains, receiver, under n bond In sum
the property and carry on the business until the
property is sold at public auction for cash sub
feet to the lien OF the two mortgages OF 10000
and 5000. respectively. Out Of the proceeds of the
sale, after deducing the costs and the expenses OF
the recevershp. he IL TO pay the plaintiff and
hold the balance subject to the order of the Court
The plaintiff IL to recover his to he taxed
and allowance Of 500