The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-12-07
AGAINST CANADIAN PACIFIC.
United states Court viii Review the Norti
Star Construction Co. Deal.

United states Court win Review the North
Star Construction Co. Deal.
Judge Wheeler has overu ed the demurrers to
the complaint OF John Berwind OF New York
against the Canadian Pacific Railway Company.
Berwind having brought suit in the United
States Circuit Court for an accounting OF the
securities and assets OF the North Star
Construction Company. which tho Cana
dian Pacific had secured and In which
company Berwind held stock. The plaintiff
declared that the Canadian Pacific sold secur-
tiles OF tho construction company. including a
railroad. for less than their value and less than
the amount OF debts which he says the Can
adian Pacific assumed when II accepted tho
capital stock Of the construction company He
says that lie has been a stockholder to the
amount Of $4,000 in the construction COM
pany throughout the various phases OF Its ex-
istence and he wants an accounting from the
Canadian Pacific. which made. he declared.
great gains by its transactions with the assets
an securities OF the construction company.
According to Berwnd the North Star Con-
struction Company owned the Duluth and
Winnipeg Railroad Company. the Duluth and
Winnipeg Terminal Company and the North
Star Iron Company. The construction COM
pany borrowed from its President, Foley.
100000 on Il note. and deposited with Foley.
as collateral securtv. tho common and Ire-
ferrei stock oil the l'ulutIl ana " lnhlltH kall.
road Company. the bonds of the Terminal
con- pany and the stock OF the Iron Com
pany. Berwnd says that Foley was about
TO collect on his noe when the majority
OF the capital stock OF the construction COM
pany was turned over to the Canadian Pacific
under an agreement with its President, Sir
William q. Van Horne. that II would take M
and hold the debts Of the construction COM
pany until the bonds III the railroad could be
marketed and sold in sufficient quantity to pay
the indebtedness. Officers and directors Of the
construction company were then elected, III
the interests OF the Canadian Pacific. aud they
managed the property so that its apparent
value was lessened. Berwnd declared that tho
securities pledged we're colluslvely sold and bid
in for much less than tho amount of the debts
on which they were pledged and for much less
than their value. The Canadian Pacific then
forecOsed the mortgage OF the railroad and tho
corporation was reorganized into tho Duluth,
South Shore and Atlantic Railway Company.
AMI then sold.
Tho demurrers set UP that the court had no
jurisdiction and that there was no ground for
relief. Judge Wheeler rules that the court has
Jurisdiction and that II the allegations oil Der
wind were true the Canadian Pacific obtained
control vi the assets of the construction COM
pany In such manner rs TO be accountable for
their management. disposition and avails. He
held that the forms OF corporate act ton and OF
legal proceedings colusiNely taken in the inter-
psts oil the Canadian Pacific Raj way Company,
as alleged did not take away its obligations as
sumed when II secured the majority OF capital
stock OF the construction company,