The herald., 1897-09-08
A JUDGMENT CONFESSED
An Important Suit in Intervention in
the Mt. Wilson Road Case

A new and very puzzling factor has
been introduced into the suit of the Los
Angeles Safe Deposit and Trust COM
pany against the Pasadena and Mt. Will
son Railway company, brought not
long ago to foreclose a mortgage or
trust deed covering the varied belong
ings of the defendant corporation, and
that will come to trial on Friday next.
Henry M. Brownback is heavy
creditor of the road, and in order to get
his finger in the financial pie. so to
speak, he, with the consent of the d-
rectors Of the railway, has taken what
appears to be very shrewd step. In
the suit wherein he is plaintiff and the
railway the defendant the directors of
the Mt. Wilson road confessed judg-
ment in favor of plaintiff for $273, 1873 O4.
This claim arose in this way: On July
23, 1894, the directors of the road deliv-
cred to the California Construction COM
pany a note for 100000, and on the
day following another one for $50, 900,
and in September a third note for $751;
900. These notes were assigned to Mr..
Brownback, and with the accumulated
interest aggregate the amount of the
judgment confessed.
This confession of judgment placed
Mr.. Brownback in such position that he
could come into the larger suit of the
Deposit and Trust company against the
Railway company. This he has now
done by filing suit as intervenor. In
his complaint he denies most of the allie
cations of plaintiffs complaint and then
goes on to make some specific charges.
Primarily he comedies that to the best of
his belief the railway company is in
solvent and the value of the property
purported to have been conveyed by the
deed of trust is insufficient to discharge
the bonded Indebtedness with accumu-
lated interest. The issue of 300 bonds,
of the par value of 100000, series A, and
the 400 bonds of the par value of s200, 900,
series b. bearing per cent interest, the
intervenor alleges to be invalid and
void. The claim that the directors of
the company that they were authorized
by the stockholders in October, 1892, to
make deed of trust and borrow on their
own credit the sum of s50000 is pro-
nounced to be absolutely untrue. When
the bonds were issued, the intervenor
claims, the stockholders were never in
formed of the contemplated action, nor
was any meeting held to ratify the act
ion in any way. For these reasons he
claims the bond issue was invalid and
the action of the directors null and void.
If the Trust company is permitted to
foreclose the trust deed the property
will probably be insufficient to liquidate
the Indebtedness, and in such case there
will be nothing left to satisfy the judg-
ment confessed by the directors and
owned by the intervenor. The latter,
therefore, prays that the Trust COM
pany take nothing by its action; that it
be decreed that the bonded indebtedness
and deed Of trust we're illegally and i'm
properly created, issued and delivered
and are null and void.
All this means that there Is a very
pretty three-handed fight on the tapis
To one not acquainted with the intri-
cacies of the law 1t seems odd that the
directors Of the company should confess
heavy judgment and that then the per-
son SO favored should intervene in a
suit for the express purpose of charging
the same directors with illegal action
on very large scale. Inasmuch as the
Pasadena and Mt Wilson railway is in
the receivers hands it is something of
a puzzle, too. how the directors of the
company have legal status sufficient to
confess away assets Of the corporation
which is no longer under their control