The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-03
Development Company Seeks
Damages for Alleged
Loan Failure.
LOVETT PROMISE ALLEGED
Plaintiff Says Lack Of Money
Caused Loss Of Many
Properties.

southern Pacific Railroad Company to
keep an agreement to lend $500. 900 to the
Development Company OF America caused
q loss to that company Of S15.000.00o a
suit to recover the sum alleged to have
been lost was filed In the Supreme Court
yesterday against the railroad company.
The complaint says that the agreement TO
make the loan was made in 1910 by Judge
r. S. LOvett. then president Of the South
ern Pacific. and that there was no reason
sor the refusal to advance the money.
The Development Company Of America
u Delaware corporation chartered to
buy and operate mining and smelling prop
critics and TO build and operate railroads
In It's suit against the Southern Pacific the
company alleges that II controlled rights
and concessions OF great value to rail-
roads running through Arizona. The
plaintiff company's capital stock on July
], 1910, was 100000, OF which S4,401.-
300 was outstanding and s2.59s,S00 In
she companys treasury. The company had
q bond Issue OF 5000. 900. OF which s3.-
7is.200 was outstanding. si,0i7.S00 re-
tired and s234,0O0 in the treasury
The chief subsidiary corporation con-
trolled by the defendant. the complaint
says, WAS the Tombstone Consolidated
Mining Company, OF which tho plaintiff
held s8.005.515 OF the 100000 capital
stock, s35s.02o Of the 100000 bond
tssue and almost 100000 OF notes.
The next most valuable subsidiary, ac-
cordng to the complaint, was the I'm
perial Copper Company which owned the
stock OF the Southern Arizona Smelling
Company and the stock of the Arizona
Southern Railroad Company which
touched the Southern Pacific line at Red
Rock, Ariz. The plaintiff held majority
of the Imperial companys 100000
capital stock and it's s2.0O0,000 of bonds,
and all OF an issue OF s1,050o00 OF notes.
Many Other Holdings.
The plaintiff. the complaint says. con-
trolled all the 100000 stock of the Con-
Eress Consolidated Mines Company, Ltd.
the majority OF the s2.500.000 stock OF the
Poland Mines Company. and all OF Its
sl,2l0,0 600 notes; the majority stock OF
the Lookout Copper Company. having
S453,l63 capital the majority OF the $5,-
74s.920 stock and $4,000 notes OF the
London-Arzona Copper Company and the
majority OF the Sl,3S0.100 stock and $685.
600 of the 100000 issue OF notes OF
the Gila Copper Sulphne Company. The
plaintn had sl0l,233 due from the Tomb
stone company and smaller sums from
several OF the other subsidiaries 1t ID
alleged.
The complaint also alleges that the
plaintiff had contracted to buy for $l25.0 0(
all of the stock OF tho Arizona and Gull
of California Railroad Company, line Il
be constructed from Port Lobos. State OF
Sonora, Mexico. 70 a point on the Arizona
border and owned the stock OF the Art
coma. Mexico and Gulf of California Rail
road Company, to be constructed through
Arizona to Port Lobos.
The plaintiff alleges that on June 80
1910, It's book assets were S3A.657.2St
and that It's liabilities outside OF III
capital stock. bonds and contingent la
bilities were only s2.106,404.
The complaint says that on July !
1910, the company wanted to raise CAPT
tai at once to meet the interest on bond,
and notes and for its contracts ant
payroll. The Tombstone company had In
vested s45O0,000 in operating It's prop
erty, large part of which had been ad
vanced by the plaintiff. The plaintiff
says that on July /, 1910, II was advised
that the Southern Pacific wanted to ge
control OF the property and concession
Of the Arizona, Mexico and Gulf OF Call
fornia Railroad Company and the plain
tiff started negotiations to get the neede'
cash from the Southern Pacific.
Loan Agreement Alleged.
The complaint alleges that F. "
Murphy, pIesluenl OF tne utNelopHl'ii
company submitted financial statemen
to Judge Lovett- then the president o
the southern Pacific, in order to &c
$4,000 600 that was needed Immediately
The Southern Pacific. II was alleged. the
agreed to make the $500, 600 loan on Jul
80, 1910 on the plaintiffs note. TIL
Southern Pacific also agreed to bu
sS,500.0O0 Of the plaintiff companys capt
tai stock and TO make payments OF $4,000
every turec months until May 10, 1871.
according TO the complaint.
The plaintiff says that In reliance o
Judge Lovetts assurances that the South
ern Pacific would lend the 100000 tn
development company notified all Its credit
ors that II would be In funds on July II
1910. and advised them TO draw on III
plaintiff for s4S0,C00 on that date tn
money was not forthcoming and the plair
tn lost the $1,000 900 of assets while
would have been saved had the loan bee
made, the complaint says, The Toni
stone property was shut down, a pettlo
In bankruptcy was filed against the con
Jany and the entire property was lost
tire plaintiff, II is alleged
Then, according to the complaint. n
Imperial Copper Company was throw
into bankruptcy and the plants OF all II
other companies were shut down and Il
construction OF the railroads abandone
Finally. Il is alleged. the Empire Tru
Company foreclosed on sl,500,000 OF Il
plaintiffs bonds and sold the plaintiff
stock In the SUBSIDIARY companies white
had been deposited as collateral. Accor,
ingly, II Is alleged. the plaintiffs asse
became q total loss and the suit seeks
hold tho Southern Pacific responsible.