The sun., 1915-06-19
$24S,21S SAVED TO
DIR. SEWARD WEBB
Judgment Against Vanderbilt
SOn-in-law Illegal, Appel
late Division Decides.
CONTEMPLATED FRAUD"

A Judgment for s2is.21S against Dr.
W. Seward Webb, son-in-law OF william
H. Vanderbilt. in n suit to recover
sl,47s.333 brought by Henry L. Sprague
lawyer and promoter. was reversed
yesterday by the Appellate Division OF
the Supreme Court and the complaint
was dismissed on the ground that
Sprague had no cause OF action against
DIR. Webb. The court commented sharply
on the transactions involving both DR..
Webb and Sprague.
The suit. which was heard by Carlisle
Norwood as referee. was brought for
damages alleged TO have been sustained
bv Sprague because Dr. Webb failed TO
use his best efforts for the success OF
venture by which they and one Arthur
l.. Never expected to acquire without
cos, TO themselves practically all Of the
stock Of the Canada Atlantic Railway
new a part Of the Grand Trunk system.
The stock was controlled by one John X.
Booth and under an agreement Booth
was to sell to Meyer fer himself ana
his associates substantially the entire
issue OF stock. aggregating SI'2OO'ooo'
for si0.oooooo.
The decision, Written ny JuS'l'' '''N''
saws IL was no part OF the scheme or
Never, Webb and sprague to provide
sny par, Of the purchase price. but
,hey Intended to issue bonds suificient
TO nav the 10000. 600 and also TO as
charge a small mortgage on part OF
the railroad property They Intended
then to turn over TO the Rutland nan
road. in which they were interested ana
of which Or. Webb was the president.
voting purposes, but planned to retain
the beneficial interest in the stock them
selves in order To collect the dividends
thereon. according TO Justice Scott. The
remaining 40 per cent. was 10 he diVlded
smons them These statements were
based on the testimony OF Sprague. the
court said
The contract was modified later 70
provide that Never. Webb and Sprasue
must deposit s250.00e to insure the carry
ing out OF the contract with Booth q
helf OF which was provided by Webb and
n half by Never and Sprague. Shortly
before the option on the stock expired
Sprague and Never were unable 10 ma
n purchaser for the proposed bond issue
and Dr. Webb took up the task himself
but also failed.
Justice Scott said that a short time
before the option expired Meyer. who
was largely involved IN many sPeCuia.
tive enterprises. became insolvent and
his failure heavily involved Webb. who
had been interested with him in many
other matters besides the proposed pur-
chase Of the Canada Atlantic Railway.
The court said. further:
80 seriously was Webb involved that
MS relatives found II necessary TO come
TO his assistance with large sums o'
money. running up into the millions. and
TO undertake the liquidation and adjust
ment Of his affairs."
The court said that the sa5o,000 con
tributed by the parties 10 the scheme
was kept by Booth and their plan came
20 nothing Among the advances made
20 Webb by members of his family was
$500. 600 which he paid over to Meyer
20 meet some OF his most pressing
liabilities.
Justice Scott's opinion said that tn
scheme by which the parties were Il
buy the Canada Atlantic road anC
issue the rosds own bonds to pay foi
II contemplated working fraud either
upon the railway company or upon the
purchasers of the bonds" and that "it Is
the fundamental law that the courts will
not enforce, as between the parties to il
an Illegal contract or one which is con
trary TO public policy or good morals.
For this reason the complaint was dis
missed.