The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1901-06-17
RAIL ROAD STEAL.
Chancery Asked to Interfere
in the Eouadorian Con-
cession.
Mr.. GRIGGS's TACTICS
He Gains a Point With His
Quiet Little objec-
tions.


Chambers this morning, heard argument
Ia the Ecuadorian case. The case came
up on the return of an order by Vice
Chancellor Stevens requiring the United
States Mortgage Company to show cause
why it should not be restrained from
making delivery of $5,OOO,0O0 of bonds Of
the Ecuadorian Association of Great
Britain. The Mortgage Company repre-
sents in this country the association and
recently advertised for sale the bonds.
The compliments are George D. Num-
ford of New York City and ST. George
Lane Fox Pitt of London, while the de-
PENDANTS are the Ecuador Development
London, the Guayaquil & Quito Railway
Company, Lord Hillingdon, Lord Wolver-
ton, Sir James Sivewright, K. C. M. B.
Sir Robert D. Monsreiffe, Hon. sydney
Carr Glyn, Hon. Pascoe, Charles Glyn,
William Mills, Hon. Algeron Henry Mills,
William Lyon Mackenzie, Evermont Hope
Norton, Archie Harman, all of England,
and the United States Mortgage and
Trust Company of New York.
The bill alleges that the Ecuador De-
velopment Company was organized under
the laws of New Jersey in September,
1900 preferred and 700 common shares.
The company was organized to build the
Guayaquil and Quito, Railroad, under
very valuable concessions from the Hon
DURAN Government. The profits of these,
counsel said were at least $6,oOO,OOO 1t
was stipulated that the management of
the companys affairs should be vested in
the holders of the common stock.
The complainants claim that they own
Ill of these shares and that up to April,
1899, the minority interest was not jeop-
ardized. In 1899 E. Hope Norton and
Acker Herman conspired with other of
the defendants to secure control of the
unissued common and preferred stock and
the complainants charge the Ecuadorian
Association was organized for that pur-
pose.
In its ia printed pages the bill shows
the progress of each step in the trans
action. 1t ayers that contrary to the
rights of the minority and contrary to the
rights granted by the Incorporation ION
September Is. 19Oo Elliott c. Smith
presented, as a part of his report as pres
ident, to the stockholders, a contract en-
tered into by him, as president of the
Ecuadorian Development Company, with
the Ecuadiorian Association, bearing date
of September 6, 1900 executed by William
Lyon Mackenzie, on behalf of the Ecua-
dorian Association, which purported to
transfer to the Ecuadorian Association
all of the cash. assets, securities con-
tracts and property of every kind and
description belonging to the Ecuadorian
Development Company at the time
nj 1air a,1tc ~
transfer was fraudulent and that at the
time it took place the business of the
New Jersey corporation was in very
prosperous condition, and that its assets
at that time amounted to s3. 2OS,OO0, and
that its prospective profits amounted to
at least $14, $4,000.
When James e. Howell, counsel for the
complainant, moved the case this morn
ing for argument, ex-Attorney General
Griggs, counsellor the defendants, said
that before the matter was brought up for
argument he would like to have Mr.
Howell state how many of the defendants
had been served with the order to show
cause Mr.. Howell replied that only
two, which were New Jersey corpora
tions. The ex-Attorney General then
objected to the case going on further un-
Ill all the defendants had been served a.;
required by the Vice Chancellors order
The Vice Chancellor was inclined to take
the Attorney Generals view of the case
and said before he proceeded further he
would like to have the bill Of complaint
read and Mr.. Howell gave a synopsis of
the document. After some further argu-
ment it was agreed to drop all the de-
PENDANTS except the Ecuadorian Develop,
ment Company ard the Guayaquil and
Quito Railroad Company.
The argumen was then opened by Mr..
George Mulford of the New York Bar,
who is a counsel as well as complainant.
In the course of his remarks Mr.. Null
ford said
This transfer is one of the most bare
faced efforts on the part of majority
stockholders to ruin the minority in
terest by voting away TO another cor
poration which they control all the assets
and property of a parent corporation"
Mr.. Mulford further declared that it
was deliberate attempt on the part of
English stockholders to take the control
of the concessions and contracts granted
to the New Jersey corporation out of
American jurisdiction into their own
country
The case was on at recess.