The weekly tribune and the Cape County herald. (Cape Girardeau, Mo.) 1914-1918, 1916-12-01
Judge SanbOrn, in Z. S. Cir
cult Court, Upholds Referee
Fauntelr0y.
PROBABLY CONCLUDES
LENGTHY LITIGATION
Suit Filed by Cape Girardeauan
in Washington, Likely to
be Dropped.

Judge Walter D. Sanborn, in the
United States Circuit Court at st.
Louis yesterday. upheld the report of
Thomas Fauntleroy, master in chan
very of the Frisco Railway receiver
ship. which awarded Louis Houck of
this city his claim of S1,O37 $685. for
the Frisco's failure to live up to its
contract to take over the Cape Girar-
deau and Northern Railway, which
runs from this city to Perryville.
The report of Master Fauntleroy
was made to tho Federal Court two
months ago, only a short time before
Judge Sanborn approved the Frisco
organization and sale to a syndicate.
At the time he approved of the Frisco,
he failed to pass upon the claim of
Mr.. Houck which had been approved
by Fauntleroy.
III view vi lliC NOOl - dNNiOiA Ia 'iSN
passing upon the c. G. & y. case, 1t
was interpreted to mean that Judge
Sanborn might overlule the findings
of Mr.. Fauntleroy. Mr.. Houck there
upon went to Washington, where he
filed a suit in the United States Court,
asking for a Judgment in the amount
of S1,O27, 1866 against the Frisco
Railway. The action Of Judge San
born Yesterday virtually closes the lltl-
cation, and Mr.. Houck expects to be
paid the amount of his claim within a
very short time.
Mr.. Houck was Joined in his litiga-
tion against the Frisco by the St.
Louis Unition Trust Company of St.
Louis, which also held some of the
railroad bonds. but the large majority
of the paper was owned by Mr.. Houck.
The bonds were given to Mr.. Houck
several years ago in part payment Tor
what were known as the Houck lines.
four small railroads, which were or
panized bv a subsidiary company OF
the Frisco into the Cape Girardeau q
Northern. BY the terms of the con-
tract made for that deal. the Frisco
Railroad stood back Of the bonds. They
amounted to S1,5O0,OOO and by reason
of the fact that the Frisco guaranteed
the pavment of the interest and prln-
cipal on the bonds they found mar
ket.
MANY of them were sold on the mar
ket and the funds used in financing m
! provements on the c. G. & \.
In 1913, however, when the Frisco
went into receivership, the receivers of
the road refused to recognize the val
iditv of the purchase of the c. &. q n
or Houck lines, claiming that the
stockholders did not approve the deal
This announcement also withdrew
the Frisco's guarantee of the bonds
and their value on the market dlsap'
neared. Tie action also forced the L
iG, & n. into receivership.
Mr.. Houck and the st. Louis Unlor
Trust Company, holding a large ma
ioritv of the bonds. filed a suit IN the
Federal Court. seeking to try out the
validity of the sale of the c. Il. d n
to the Frisco, and thus restore thf
value of the bonds.
The trial of the case was referre'
bv Federal Judge Sanborn TO Mt
Fauntleroy as special master. AT th'
close of the trial, Fauntleroy, yea
ago. submitted a report to Judge San
horn in which he asserted the vahdlt!
of the sale of the c. G. & \. an'
dacIared that the Frisco would have t
stand good for the bonds which MI
Houck and all other bondholders pQs
seSsed.
Judge Sanborn made that order Il
the court last November, but follow
ing that step, it became necessary 10
, the court to determine how much tn
Frisco would have to pay on the bonds
Judge Sanborn decided that in orde
to maintain the Frisco's contract as
guarantor, it would be necessary TO
. that road to pay damages amounting
| to the difference between the par valu
: of the bonds and the market value I'M
| mediately after the Frisco went t
into receivership.
: In order to establish this amount