New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-06-19
FAMILY MILLIONS
AIDED DR.. WEBB
Decision Reversing Judg-
ment Against Him Re-
vealS Period of Need.
RECALLS PLAN TO BUY
CANADA ATLANTIC
Henry L. Sprague Got Award
of S243,213 for Failure
of Deal.

A decision by the Appellate Division
yesterday in favor of Dr. ". Seward
Webb in q suit brought by Henry l..
Sprague, lawyer and promoter, 70 re-
cover Sl,47S,333 indicates that DR..
Webb, director of railroad and other
corporations, and son-in-law OF the
late William II. Vanderbilt, was heav-
lily involved financially in 1902. His
situation at that time was such that
it was necessary TO procure aid from
members of his family, which he was
successful in doing, receiving several
million dollars 70 tide him over
The Supreme Court, on the report
of Carlisle Norwood, as referee,
granted Spraguc a judgment for $243,-
2l3. This is reversed by the Appellate
Division, which holds that Sprague
had no cause of action.
Dr. Webb, Spraeue and Arthur L.
Meyer were in a joint venture TO buy
practically all the stock Of the Canada
Atlantic Railway. Sprague sued Dr.
Webb on the ground that the latter
did not use his best efforts to con-
Summate the deal The stock was
owned or controlled by John K. Booth
In an agreement with Meyer, acting
for himself, DR.. Webb and Sprague,
Booth agreed TO sell stock having a
par value of S7,20O,0OO for S10,000,000
The plan of the would-be purchasers
was TO pay for the stock through
mortgage bonds. There was q modif-
cation of the agreement under which
DR.. Webb, Meyer and Sprague were to
put up S250,000 TO insure the carrying
out of the agreement. Meyer and
Sprague were unsuccessful in their
efforts to find purchasers for the bond
issue, and just before the option on
the stock expired Dr. Webb undertook
to find purchasers.
The referee held that he had failed
to use his best efforts, and was liable
for the amount Sprague and Meyer
had deposited with Booth, Sl25.000,
with interest. The Appellate Division
held the plan was illegal and i'm
moral"
Justice Scott in the opinion dissents
from the view of the referee and calls
attention to tho fact that the bond
issue could be disposed Of only through
an arrangement uder which the Rut-
land Railroad Company would guar
antee the payment of the bonds. Dr..
Webb is a director of the Rutland.
There is not the slightest indica-
ton in the evidence" said Justice Scott
that such a guarantee could at any
time have been arranged for. Ger
tainly not after May 2, 1902, when
Webb's efforts to find a purchaser ap-
parently ceased. Because then OF
shortly afterward Webb lost his inhu-
entail position with respect to the Rut'
land Company. 1t is apparent that
from that date Webb was in such a
financial position and in such a state Of
health that it is quite improbable
that any efforts he might have made
to carry out the contract with Booth
would have been successful.
The joint adventures proposed e
purchase as their own property anC
for their own benefit the stock Of the
Canada Atlantic Railway Company anC
proposed to pay for it, not with theil
own money, but with money TO be Dor
rowed by the railway company, with
out any consideration moving to it OF
advantage accruing to it. In other
words, they proposed that the rail
way company should issue it's bonds
and that they should receive and use
the proceeds thereof for their own
private and personal ends"