The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-02-03
BONDS NOT GOOD
This Is Claim Made by Banks
in Suit.
Stops Payment of Devlin Sc
curities to the Santa Fe.

Five banks, three or them In the
hands Of the receivers, pulled down by
the Devlin failure. have filed a petit
ton in the United States district court
contesting the validity of $4,000 of
Devlin Coal company bonds which the
Santa Fe railroad holds and which it is
stated are about to be paid by the trus-
tees. If the bonds are held to be in
valid the depositors of the defunct
First National bank Of Topeka. the
Toluca National bank of Toluca. ILL.,
nois. and the Spring Valley bank of
Spring Valley, Illinois, will benefit and
may secure additional dividends.
Judge John c. Pollock has referred
the application made for restraining
order directed at the trustees to keep
them from paying over this amount of
money to N. H. LOOMS, special
referee.
The plaintiffs mentioned in the petit
ton are: H. e. Taggart. receiver of
the Toluca National bank; Continental
National bank of Chicago; George c.
Rankin, receiver of the First National
oeiver of the Spring Valley bank. and
the Bank of Topeka. The trustees men,
toned as the defendants are Cyrus Lee
land, J. e. Hurley and Walter Reeves.
1t Is stated that on January 10, 1907.
the trustees filed an application to sell
pany at private sale. That an order
was duly issued by the court in Nav
authorizing the sale and that out of
the proceeds 425 first mortgage bonds
should be paid, included in the number
being 243 bonds held by the Santa Fe.
The other holders were the Corn En-
change bank Of Chicago, so bonds;
Fourth National o. st. Louis, 35; Geo.
R Peck, 20; First National of Leavep-
worth. IL; Bank Of Topeka, 25; Ma
l. - 80 II q
%y, rs.
The debt due George r. Peck has
been nqutdated and the 30 bonds held
by him have been returned to the trus-
tees. The other bonds still remain out
standing.
The legality of the bonds held by the
Santa Fe is contested on the ground
that G. J. Devin in making the trans
fer never received any consideration az
president Of the Dev1in Coal company
though he as an individual received
consideration previous to the forma-
ton Of the Dev1in Coal company.
The transaction shows the specula-
tive manner in which Dev1in acquired
holdings
Previous to December 20, 1892, the
Santa BE railroad controlled the lands
and properties which subsequently be-
came the Devlin Coal company holdings
at Toluca- A company was formed by
D6vhn on that date to take over these
properties, the capital stock being $3.50,
900 divided into 1000 shares. This stock
was turned over to ]. w. Reinhart
president Of the Santa Fe as trustee
for the railroad, for monies advanced
to Deylin to make the purchase price
and to cover the interest on the prin-
c1pal which totaled all together 1915, 600
Later this stock was turned back tc
Dev1in. in 1888. without any lien on II
IN exchange for 31s twenty five year {
per cent gold bonds secured by a deed
OF trust, Devlin having while pretend
Ing to act as president, issued 500 bonds
OF par value OF 200 secured by a
trust deed on the Devlin Coal company
properties. Later $4,000 was paid by
the company to the Santa Fe which
retired Is OF the bonds.
The petitioners claim to represent
$3.50 GOO Of claims which have been duly
allowed being valid but which are I'M
secured and unpaid.