Omaha daily bee., 1897-11-19
VENNER COMES OUT LOSER
New York Supreme Court Decides Against
Him in a Suit.
SETTLES THE OMAHA WATER WORKS CASE
UphoIds the Validity of the Fore
closure Sale in This City and De-
clares Present Company
the Rightful Owners.

NEW YORK, Nov. 1s.-Justice Laughlin,
in special term OF the supreme court today,
dismissed the complaint in an action brought
by the United Water Works company and
others agains; the Omaha Water Works
company and the reorganization committee
of the defunct American Water Works COM
pany TO prevent the further execution OF the
plan whereby the property OF the last named
company, which was bought in by the COM
pany at a foreclosure sale last year, was
turned over to the Omaha Water Works
company, which executed a mortgage of
s6,OOO,oO0.
The property consisted Of water works,
franchises and plants situated in Omaha ond
other cities in Nebraska formerly owned by
the American Water Works company. When
that company defsulted in 1898 most of the
security holders deposited their holdings
with committee in whom full power was
conferred. The plaintiffs represented fifty
eight out OF 1850 holders of the bonds OF
the old company. The new company was o.
ganized under the laws of Maine and the
objections raised by the plaintiffs to the re-
Organization pi:n were overruled by The court
on the ground that no provisions Of the Maine
statutes are violated.
Inc new comply mas OUiaAuSu Tue l4sAA
to the franchise from the state Of Nebraska
and that state alone can attach the enjoyment
Of the franchise by the new company.
OUTLINED BY THE JUSTICE.
In the opinion filed by him, Justice Nc
Laughlin said:
The situation is this: a new corporation
formed under the proposed plan, which has
received a conveyance of the properly in
question, upon which it has executed In
accordance with the laws of the state In
which it was incorporated the mortgages
sought TO be set aside the mortgages have
delivered and recorded in the state in which
the property is located, and the corporation
is now in actual possession and operation OF
the water works referred to; the securities
OF the new company have been issued and
distributed among the holders OF the sur
rendered certificates, representing upwards
OF $4,000 COO in amount of the bonds which
have been already used in paying for the
property purchased.
The owners of those bonds, or those
who have succeeded 10 their interests, have
not only acquiesced in, but, so far as the
evidence shows, approves OF the acts OF the
committee, and yet these plaindfs, repre-
senting a; most but ffty-eight certificates
out of 5,63S. ask 70 have the approval OF
such large majority set aside and the whole
declared Illegal and void. This court Of
equity ought no: to do
When the above dispatch was shown to j.
VI. Woolworth, leading counsel for the Omaha
Water company in the case in the United
States circuit court, in which the city is
plaintiff he stated that the case was one
which the water company had never re-
garded as an important one. He said the
very same case had been tried in the courts
OF Maine and won by the defendant and had
then been brought in the courts OF New York
state with the same result.
This suit" said Mr. Woolworth, was one
in which the United Water Works company
and other parties who held certificates for
mortgage bonds which they transferred TO
the organization committee OF the Amer
lean Water Works company brought a suit
to have the conveyance to the Omaha Water
company under the foreclosure sale and
NOR tgages bonds and stock issued by that
company adjudged void. The plaintiffs held
certificates for for1y-eight bonds out Of 1863.
The action was brought in the New Yrk
court last spring before Mr.. Justice Laugh!in,
who has held the same under consideration
until this time. Mr.. Venner is the president
Of the United Water Works company and
holds the majority of its stock, if not all
of it.
This decision establishes the regularity
OF the plan Of the reorganization OF the
Omaha Water company and the validity of
its mortgages. bonds and stock. 1t does not,
however, affect the questions that are in
volved in the suit now pending in the United
States circuit court for Nebraska, in which
the city Is the ostensible plaintiff"