The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-09-25
VIGOROUS ATTACK
ON RIO GRANDE
Charge in Court That Bingham
Branch Was Stolen From
BOndhOIderS.
MAY BE ORDERED SOLD
ONLY TECHNICALITY CAN HEAD
OFF RAPHAEL'S CLAIMS.

That the Denver & Rio Grande rail-
road stole. the branch line from Bingham
to Salt Lake from the creditors of the
Wasateh & Jordan Valley railroad by
trick of high finance is the allegation
made by Russell Sage Raphael of New
ork, who is endeavOring to secure from
the local courts an order for the sale
of the property to satisfy a S1.S1000
judgment which he secured against it
April T. 1906, in the federal district court
for the southern district of New York.
If Judge Morse orders the sale de-
spite the objections of the Denver q
Rio Grande, this most valuable feeder
OF the Gould system viii DE put up at
auction in New York by Chester Mar
tin, who has been appointed receiver
ton.
The history of the controversy begins
IN 1873 when the old Wasatch & Jordan
Valley railroad found that in order to
operate its road it would have to re-
construct it and for this purpose offered
for sale LOCO bonds at 81 eco each Only
Sg4 were sold and 579 Of these We're pur-
CHASED by the father of the plaintiff in
the present case. On their face the
bonds were first mortgage on the road
bed of the company, and this mortgage
was recorded here June ,. 1873
Prior Mortgage ForecIosed.
There seems to have been another or
| prior mortgage. however, on some of the
| property of the company, although it is
| cOntended by the plaintiff that this was
| not on the roadbed In some manner
| the prior mortgage was foreclosed in 1881
! without notice to the holder Of the sec
| ond mortgage, but with a knowledge of
| its existence. The Denver & Rio Grande
| company was the purchaser at the sale
/ and ever since has operated this line
| which yields huge revenues each year
! Inc present action was begun year
/ ago by Russell Sage Raphael a godson
/ of Russell Sage, and the son of the orig
/ inal holder of the bonds. On April 4.
| 1906, in the southern district of New York.
he obtained a judgment against the Wa
| satcn a. Jordan Valley railway, the Den
| yer q Rio Grande railway, the Rio
| Grande Western railway and the Union
| Trust company of New York, for the
value Of the bonds and interest since
| 1879.
A certified copy Of this Judgment was
| filed in the district court here and an
| action commenced last week to enforce
| the collateral mortgage. Judge Lewis
! heard the case last week and ordered a
| judgment in favor of the plaintiff against
| the Wasatch & Jordan Valley railway.
| eliminating for the time being the other
DEFENDANTS, and appointed Chester Mar
tin of New York receiver.
| The Rio Grande, then fearing that the
! sale of this valuable property would ac-
tually be made, appeared before Judge
| Morse yesterday and asked time to bC
heard on the part of their company.
Van Colt, Allison & Ritter appeared fol
| the railroad and Joseph Martin of New
York appeared for the plaintiff. In a
motion to dismiss, the railroad attorneys
argued that the judgment of the fedora
| court was of no avail here. This was
overruled by Judge Morse.
Mortgage Juggling Charged.
Then the contention was raised that tn,
Rio GFande Western had been in undis.
puted possession for twenty years. This
Mr.. Martin vigorously denied, stating tina
the mortgage held by his client was OF
file and an open notice to the world thai
this cloud was on the title to the property
when it was secured by the Rio Grand'
| twenty-five years ago.
This road was stolen from the plain
tiff in this action by a trick of mort
gage juggling the like of which 1 hav,
never heard of before" declared the New
York attorney.
Judge Morse took the matter under ad
visement when the railroad attorneys pre-
scented the argument that the laws o.
, Utah prevented two actions involving tn,
same facts from being brought at tn
same time. This law, if enforced in thi
case, would not allow the plaintiff to Sc
cure an order of sale because he simply
has judgment from the federal cour
which cannot be collected. And there il
no other recourse.
| Judge Morse considered this a serious
point and the attorneys will submit brief
by Nov. covering this subject.
| DelOS McCurdy, one Of the leaders o
the New York bar, IS associated will
MIR. Martin as counsel in the case a!
are also Powers & MariOneaux of Sal
Lake.
If the order of sale is made the Ri,
Grande will be compelled to bid in tn
property.