OCR Interpretation


Chicago daily tribune. [volume] (Chicago, Ill.) 1872-1963, July 15, 1879, Image 11

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THE RAILROADS.
Another and Most Important
Phase of the Denver-
Atchlson Fight.
Order of the United States Court
Dismissing" Receiver
Risley.
Xho Decision in the Grand panon Oaso
Favorable to the Atohiion
Road.
Answer In Foil of tbo Atchlmm to the
Denver & Rio Grando Com
pany.
Hio Insldo History of the Great
est Railroad Steal on
Record.
Speech of Judge Beckwith, Counsel for
. the Atchison, Topeka &
Santa Fo,
la Reply to tho Application for a Be.
, ceiver in tho Grand Canon
Hatter.
THE GREAT COLORADO EIGHT.
Bpteiat Dltpatc A to The Tribune.
Dbnvsr, Col., July 14.—Tho court-room was
literally packed with a sweltering mass of hu
manity this morning,—railroad magnates, mill
ionaires, miners, lawyers, ond other prominent
persons,—lti' anticipation of tho decision upon
tho greet railroad eases arising out of tho fight
between the Denver Si Rio Grando ond Atcblson
Companies.
Immediately noon assembling, Justice Miller
proceeded to announce the views of the Court
upon the questions at Issue. ■ After stating a
general resume of the litigation, he said that
the Court was firmly convinced that the ap
pointment of the Receiver was a collusive pro
ceeding for the purpose of frustrating the order
of restitution which-was about to bo entered
agfttnst the Rio Grande Company. The case did
not warrant the appointment of a Receiver, and
justice demanded that he bo be discharged. The
Receiver waa thereupon directed to return pos
session to the party from whom bo received it,
namely, the Rio Grande Company. The latter
Company must restore possession to the Atchi
son Company by an order to bo entered la the
suit of the Attorney-General.
In the Grand Conon ease, the Court, after de
ciding In conformity with the Supremo Court
opinion that the Rio Grande had the prior right
to select Its location to Leadvillo unless by the
lease It bad transferred that right to Uib Atchi
son Company, which was a matter vet to bo de
termined, the line to Leadvillo mast bo con
sidered an entirety; and -if the Rio Cranio Is
permitted to occupy the other side of tbo river
they must pay for the entire grade to Leadvillo.
t A Commission of Engineers Is appointed to
report this and oilier matters, aud until further
•orders no work Is to be done upon the lino by
either Company,—everything regarding that to
iiomoln at & standstill.
i Leaver Is In fever beatof excitement over to
day’s decisions, and lively times are predicted
within three days.
\ Judge Miller has signed an order upon Rfsloy
to deliver up tbo Rio Grande Road to (ho Rip
( (Graudo Company before Tnursday, the 17tb.
I To the Watem AtaociaUd Pmt.
; Dsnvsn, July 14.—1 n the Grand .Canon case
jTudge Jlallet decided that the msadote of the
Supreme Court-giving'tho prlor right to, the
Rio Grande Company embraced the. whole lino
from Canon City to Leadvillo, and that (hoy
mast take nil of the constructed lino or none.
They could not toko parte hero and there, ac
cepting some and rejecting others, but roust
taue all, and pay the legitimate cost of con
struction. This includes from tbo'twcntlcth
mllo post to Leadvillo.
~ All points concerning the matter of putting
the Rio Grande Company In possession, and
for the construction of tne line westward, are
put In the hands of three export Commission*
era, one selected by each of the parties, the
third by the Court. .Both parties are enjoined
'from proceeding any further with the work of
construction until the preliminaries are settled
by the Commissioners, when further orders will
bo given.
THE ANSWER*
StteeM Corrttponrtenee of The TVifiimr.
Uenveu, Col., July 11. — The following is the
answer In full of the Atchison, Topeka & Santa
Fo Railroad Company to the Denver & Rio
Grande Railway Company, which gives the cn*
tire inside history of the groat railroad contro
versy now unpermost la the public mind. The
same was Hied in Court to-day. Judge Beck
with’s speech in reply to the application of the
Denver <fc Rio Grande Company for a Receiver
to be appointed for tbe construction of the rood
from Canon City to Lcadvllle will also bo pe
rused with great Interest:
Jn the United Stale* Circuit Court for (he Du
in'et of Colorado —The several answer of the
Atchison. Topekads Santa Fe Railroad Company
to the original mid amended bill of complalntof
Louis H. Meyer, complainant, against the Den
ver & Rio Grande Railway Comnany and the
Atchison, Topeka & Santa Fo Railroad Compa
ny, defendants.
This dofemlautnow and at all times hereafter,
saving and reserving all and all manner of bene
fit or advantage of exception or otherwise to
the many errors, uncertainties, and Imperfec
tions of the said original and amended bill for
answer thereunto, or unto so much and such
fiorllons thereof as this defendant Is advised It
s material or necessary for it to make answer
unto, ansporlngsays:
That It admits tho organization of the said
Denver & Rio Grande Railway Company on or
about the 27th day of October,. 1870, and the
making and filing by the corporators of said
Railway Company of a certificate of incorpora
tion, as Is In said bill alleged; and this defend
ant, for the purposes of this suit, also admits
that the said Denver A Rio Grsnde Railway
Comnany became authorized to construct and
operate the several lines of railroad thereafter
constructed and operated by It; but this de
fendant deulcs that under nud by virtue of said
corporation, or lu any other way, the said Den
ver Rio Grande Railway Company became
authorized to survey, locate, or construct any
other or further line or lines of rollway on or
upon any particular route whatever.
And tuts defendant further admits that on or
about the 18th day of April, 1871, Uie said Den
ver & Rio Grande Railway Company had lo
cated Us lino d! railway from Denver to Menu
ment Croek, but whether the Directors of sold
Company, on or about that time, resolved and
determined to Issue Us cornorelc bonds, or to
secure the saihe in the manner and form as
charged in said bill of complaint, this defendant
w not| advised, and can neither admit nor deny
the ailegaUons.of the said complainant's bill of
complaint In that respect.
This defendant farther answering says that It
admit# that on or about the 18th day of April,
1871, the officers of Uie Denver &Klo Grande
Railway Company executed under the seal of
said Company a certain mortgage or deed of
host of the general teuor and effect stated In
said bill of comp aim, but this defendant Is not
advised as to the particular terms and condi
tions of said mortgage or deed of trust, and
therefore calls for the production of the original
thereof, at the hearing of this cause.
This defendant further admits the delivery
and recording ot said mortgage or deed of (rust
as alleged In said bill of complaint.
This defendant further admits that the said
Denver & Rio Grande Railway Company did
execute and scli certain of Ita bonds purporting
to be secured by the said mortgage or deed of
••trust, but as to the amount of such bonds, so
executed, sold, or otherwise Issued by the said
Company, or the members thereof, this defend
ant Is not advised and requires proof of the
number and amount of bouds Issued aud now
outstanding.
This defendant further answering save that It
Is Informed aud believes that the full amount of
10,882,500 of bouds has not been issued to, and
are not uow held by, persons who are bonsfldo
bqlderH thereof for value.
This defendant further answering, sars that it
w Informed aud believes that $601,600 of the
bonds of said Company, pari aud parcel ot sold
$8,383,500, were heretofore, to-wlt: on oralmut
, the Ist day of May, 1877, by an arrangement be
tween said complainant and his cMVueque trust,
or some portion of them, mid the ssld Denver
Rio Grnndo Railway Company, set apart ns a
trnst fund for the payment of said coupons
then outstanding, width matured on Ihc Ist d«T
of May, 1877, the Ist day of November, 1877,
and tho Ist day of May, 1878, res|)cctlvclv, being
tho same coupons mentioned in said bill of com
plaint as now past duo mid tinoald; and that in
pursuance of Mich arrangement the said Den
ver Sc Rio Grande Railway Compnnyon or about
the Ist day of Juno, 1877, Issued certificates of
Indebtedness for and on account of earn in
terest coupons which fell duo on the Ist day or
Moj-, 1877, the 1» ilnv ot November. 1877, nml
the lit day ot May, 1878, a copy ot which ccrtll
icates Is herewith filed, marked hxhlblt No. 1.
This defendant, further answering, says that
ills Informed and believes that tho holders of
said bobds to whom sold Interest was nayanjo
mid to become payable to Ihc amount of $147,-
052.60, Borrondered teethe complainant the cou
pons Issued with and attached to the bonds by
them respectively held, for said amount of
$497,052.60, mid accepted certificates of indebt
edness In lieu of tho said coupons, os mentioned
In said certificates of Imlubtcdncss, u copy of ouo
of which Is.herewith filed.
And this defendant, further answering, says
that It Is Informed mid believes that it was
agreed by and between the complainant mid the
said Denver A Rio Grande Railway Company
and the holders ot tho bonds of said Company,
or somo of. them, then issued ami outstanding,
and the holders of coupons which fell due on
tho Ist day of May, 1877, the Ist day of Novem
ber, 1877, and tho Ist day of May, 1878, or some
of them, that the holders of such coupons
might exchange tho same, or any port thereof,
for any of said $804,609 of bonds at gbc rate or
80 cents on tho dollar for said bongs for tho
amount of the coupons so exchanged* k
This defendant further auswcrlug efts that it
Is informed and believes that It was agreed by
mid between the complainant, the Denver A
Rio Grande Railway Coini>nny, and the said
coupon holders last mentioned, or some of them,
that said $801,500 of bonds should nut he sold
: or disposed of, except for the purpose of paying
said coupons, or lu exchange therefor.
And this defendant further answering says on
Information and belief, that none ot tho said
$801,600 of bonds, so set apart as a trust fund
os aforesaid, were over exchanged for raid cer
tificates of Indebtedness, or for tho said coupons
which fell due on the Ist day of May, 1877, the
Ist dayof November, 1877, and thu Ist day of
May, 1878; and tho defendant says that If said
bonds have been sold and disposed of as In said
bill alleged, and tbo coupons and Interest cer
tificates Issued therefor have uoi been paid, such
sale was fraudulently made, and thu proceeds
of sold bonds bare been fraudulently misappro
priated, lu violation of the trust hereinbefore
mentioned.
. And this defendant further answering,
save - that the market value of, said
$W4,500 of bonds has at* till limes since
the Ist day of November, 1877, been
sufficient to pay said Interest falling due on the
Ist day .of .Mnv, 1877, the Ist d:iv of November,
18T7. and the Istdav of May, 18f8, and tlmt said
bonus were an ample security for the payment
of said Interest, and the prococda of said bonds,
It n sale thereof had been made, were amply
suQJdont to pay tbo said interest so falling duo
as aforesaid.
And this defendant denies that the sold Den
ver «fc Rio Grande Railway Company has used
and disposed of the bonds In said bill of com
plaint mentioned In the lawful exercise of its
powers and authorities, as is in said bill alleged.
This dofendaut further answering, says that
It has ho knowledge, Information, or belief rela
tive to'tho surveys, maps, or plans of different
routes of contemplated railway Hues, or exten
sion thereof, hs Is in sold bill alleged, but this
defendant admits that the said Denver A Itlo
Grande Railway Company has constructed a
ndlwav from. Denver southward, via Colorado
Borings, Pueblo, and Cueharas, to El Moro,
la Colorado, ami from Cueharas westward to
Alamosa on the Rio Grande Del None, n dis
tance of about 295 miles, and tlmt Urn said Den
ver A Rto Grande Railway Company acquired
rights of . way, lauds, depot, depot-grounds, wa
ter-stations, station-houses, and other struct
ures, erections. and fixtures, and rolling-stock,
machinery, fuel, supplies, mid material for the
use of said road, but relative to the extent of
su?h acquirements, or the manner In or mejms
bv widen they wore made, this defendant has no
knowledge, Information, or belief.
And this defendant further answering save
that It admits that the Denver A Rio , Grande
Railway Company claimed to have, In addition
to the property hereinbefore mentioned, certain
other rlgjils, powers, and property, and particu
larly Urn right to construct, maintain, and oper
ate a rallroadfrbru'Pnohlo to Canon Cltv, but
this dcfoadaat has no knowledge. Information,
or belief of miv other right or property of the
said Denver A Rio Grande .Railway Company,
This defendant further answering says that It
has no knowledge, Information, or belief relative
to any resolution of the Denver A Rio Grande
Railway Company adopted by Its Hoard of Di
rectors on or about tbo first day of May, 1812.
as is In said bill alleged, and requires proof of
the same,.
Bat,this defendant admits that the said Den
ver A Rio Grande Hallway Company, on or nttut
the first day of May, 1872, executed, under the
seal of said Company, a certain mortgage or
deed of trust of the general tenor and effect
stated In said bill of complaint, but this defend
ant Is not advised as to the particular terms of
the said mOrtgogo or deco of trust, and, there
fore, calls for the production of the original
thereof at the bearing of this cause. Ami this
defendant admits tlmt said last-mentioned
mortgage or deed of trust was recorded as Is In
said'bill alleged.
And this defendant admits that tho snla Den
ver A Rib Orundo Railway Company did exe
cute ami jell certain of Us bonds purporting to
bo secured by said last-monlloncd mortgage or
deed,of trust, but as to thu amount of such
bonds so executed mid sold or otherwise issued
by tho said Company this defendant is not ad
vised, and requires proof of thu number and
amount of sucb bonds Issued and now out
standing.
And this defendant admits tlmt on or about
the 37th,day ol Mov 1874, John Edgar Thomp
son died, os Is In said bill alleged, and that on
or" about tho 'tilth day of October, 1874, said
Samuel M. Felton, in said bill mentioned, re
signed his trust lu writing, as In said bill al
leged, and that, by reason ot such death and
resignation, the complainant became thu solo
surviving- and remaining Trustee under said
deeds of trust, mid that complainant Is now tbu
sole acting Trustee thereunder.
And this defendant further answering eavs
that. It has no knowledge, Information, or be
lief relative to tbo manner in which thu said
Denver & Rio Grande Railway Company is
sued und.dlsposcd of said last-muntlonod bonds,
and requires proof thereof.
This defendant further answering say a that
It admits that the Denver & Rto Grande Rail
way Company acquired, between Pueblo mid
Canon City, rights of wav, lands, depots,
depot-grounds, water-stations, station-homes,
and other structures, erections, and fixtures,
and also rolling-stock, machinery, supplies, fuel,
and materials far use in connection therewith,
but relative to tile extent of such Requirements,
and the means by which tho same were made,
this defendant bos no knowledge, information,
or belief. i
* This defendant further answering ears that It
has no knowledge, Information, or belief rela
tive to any rights acquired by tho said Denver
«fc RloGrando Railway Company under tho laws
of the Territory of Colorado, or under the Jaws
of the Territory of New .Mexico, nor has It any
knowledge, informallon.or belief relative to any
rights acquired by the Denver A Rio Graudo
Railway Company under the acts of Congress In
sold complainant's said bill of complaint men
tioned.
This defendant further answering says Hint
relative to Urn allegations of the laid complain
ant s said bill of complaint os to the agreements
and stipulations In said deeds of trustcontnlncd.
It refers to the said deeds of trust for partied*
lars relative to said agreements and stipula
tions.
And this defendant further answering says that
It admits that on the Ist day of May, 1877, there
became due ami payable on cirtaln of Uio bonds
of the said Denver & Hlo Grande Hallway Com
pany; then Issued and outstanding, and secured
by*said deeds of trust respectfully, a semi
anauaUnstallmentof Interest; and tbuton the
Ist day of November, 1877, there became due
and payable on certain of the bonds of the'said
Denver & Hlo Grande Hallway Company, then
Issued and outstanding, and secured hr said
deeds of trust respectively, another semi-annual
Installment of Interest, excepting so far us said
last-mentioned Installment of Interest was In
cluded in certain certificates of Indebtedness
hereinbefore mentioned; and that on the Ist
da? of May, 1678, ihero became due and payable
on certain of the bonds of thu said Dcuver &
Hlo Grande Hallway Company, then Issued and
outstanding, and which were secured by said
deeds of trust respectively, still another semi
annual Installment of Interest, excepting so for
as said Installment was included in tho certlti
cates of indebtedness hereinbefore mentioned.'
Tbls defendant dentes that said Company
follfcd to pay said several InstallmcnUuf interest
and made default In the payment of the same,
os In said bill allecod, but says that said com
plainant, tbe said Denver & Hlo Grande Hall
way Company and Its bondholders, or some of
them, on or about the Ist day of Juno, 1877,
concluded tho arrangement hereinbefore men
lioDcd for funding tho said interest so falling
due as oforesaid. '
• And tbls defendant further answering says
that It is informed and behaves that the interest
Upon said ceriiflcatca of Indebtedness and upon
said coupons falling due May 1, 1877, Nov. 1,
1877, and May 1,1878, out Included in sold cer
THE CHICAGO TRIBUNE! TUESDAY. JULY 15. 1870-TWECVE PAGES.
tlfiralcs of Indebtedness, was folly paid up lo
tiic Istdavof May. 1870.
Ami this defendant, upon Information and
belief, denies Hint the sold Denver A Hlo Grande
Railway Company Is Iti default with respect to
any Interest Installment for more than six
months, ns In said hilt alleged.
This defendant further answering nays that
the said Denver Si Rio Grande Railway Com*
pony Is amply able to pay said Interest falling
duo on the said Ist day of May, 1877, the Ist
day of November, 1877, mid the Ist day of
May, 1878, If It has not been paid, unless It has
fraudulently disposed of the proceeds of tho
$301,500 of bonds hereinbefore mentioned, and
that if It has so fraudulently sold and disposed
of the proceeds of aald bonds, such sale mid
fraudulent disposition of the proceeds have
been made with (he assent of llmcjtnplalnunt
and of tho holders of n largo majority of tho
bonds represented by him.
This deicndant furlhcranswcrlng savs that It
wnsdulycrcatcd and organised a corporation tin
der (ho laws of Kanins, and Is mnv transacting
business by am) under Its corporate noma of tho
Atchison, Topeka Sc Bantu Fo ' Railroad Com
pany, with such powers mid authorities as were
oy the laws of Kansas, conferred. noon and
granted to this defendant, and. this defendant
(lies herewith and makes u part hereof a copy of
suen laws of Kansas as conferred authority up
on this defendant.
This defendant denies that It has no power or
authority under tho laws of Kottsas or of Colo
rado to acquire, possess, operate, use, main
tain, and enjoy railway lines and other property.
In the State ot Colorado, as In said hill alleged.
This defendant further answering says that It
has the right under the laws of.. Colorado to ac
quire, construct, maintain, and operate lines of
railway in said State, mid lias the nght to charge
tolls for thu trausnortatlun of persons and
property thereon in ns full and ample a manner as
any corporation created by and organised under
laws of the State Of Colorado. ’
This defendant further answering says that It
Is entitled to possession of all thu 'property
mentioned In said deed ot trnst, and Is the own
er of such portions of said property as arc
hcrolnaltor specified,' mid that thu allegations In
said complainants said bill of complaint that
this defendant has'no right, title, claim, or de
mand to said property, or to tho possession
thereof, arc untrue.
The defendant admits that the agreements
hereinafter mentioned by'Which this defendant
acquired Its Interests In said property were modo
after tho execution of said, deeds of trust here
lubeforo mentioned, hut this defendant denies
that the said Denver & Rio Grando-Railway
Company was in default when said agreements
were executed. • ■ •••
This defendant admits that a suit was hereto
fore Instituted hr (ho complainant In tins court
against the said Denver Si Rio Grando Railway
Company for foreclosure of said deeds of trust,
vet this defendant says that* the-sald complain
ant. by his agents and attorneys, at the time tho
agreements hereinafter mentioned were exe
cuted, and at the time of .the payment to him
of $183,303.75, os hereinafter mentioned, fraud
ulently concealed said suit from this defendant
for tho purpose of Inducing this defendant to
enter Into said agreements, and to mako said
payment.
And this defendant - further answering says
that at the time of the execution of the agree
ments hereinafter mentioned, ami at the time
of the payment of the $188,203.75, ns herein
after mentioned, it .had no .notice whatever of
nnv default on the. port of the said Denver &
Rio Grande Railway.Comoony In the payment
of Its Interest or any. part thereof, and this de
fendant nays that if any default existed the
same was fraudulently concealed from thi* de
fendant by the agent and solicitor ol complain
ant, for the purpose of Inducing this defendant
to enter Into said agreements hereinafter men
tioned, and to make said payment.
And this defendant denies tlmt there Is any
such provision of the Constitution or laws Of
the State of Colorado, or policy of said Slate,
ns is in said Ml) alleged.
This defendant admits that n fraudulent pro
ceeding In the nature of a quo warranto was In
stituted by the Attorney-General of thu State
of Colorado, for and on behalf of the people of
said State, In the District Court of the Statu of
Colorado, In aud for. the .Couutv of El Paso,
requiring this defendant to show by what war
rant and authority it was-exercising hs corpo
rate franchises to -operate a railroad In
said State, unit to charge tolls for transporta
tion of persons or property thereon, and tlmt
this defendant duty appeared and submitted to
the Jurisdiction of the Court, and demurred to
the complain then and there exhibited against
it bv the oald Attorney-General of the Stale of
Colorado, and that thereupon such proceedings
wen* had that on or about the —day of
April, 1870, a Judgment of ouster was entered
thereon against this defendant.'
Hat this defendant snvs tlv.it (he said proceed
ing was a fraud In Its Inception, the Judgment
therein for thu complainant was a fraud, mid, as
it is Informed aud believes, corruptly procured,
and that said judgment has been superseded by
an order of the Supremo Court of said Stain,
mid tlmt said Supremo Court has practically de
cided tlmt there was no warrant on the part of
the Attorney-General of said Slate for tiling
said information In the manner and form In
which It was tiled, nor on tbo part of the Judge
fur thu judgment rendered Jn said cause,''and
tlmt the whole proceeding was a fraudulent
abuse of tlie powers of the Court for the pur
pose of harassing and annoying this defendant.
This defendant further answering says that it
denies that the said Denver A 1110 Grande Rail
way waj, oil the 18th day of December, 1878, In
thorough working order and condition, ami ade
quately equipped with motive power, rolling
stock, machinery, tools, materials, and supplies,
mid also with side-tracks, depots, and other
structures as is lu said bill alleged.
This defendant admits that It claims the pos
session of said railway and property under thu
contracts herclnntter mentioned, .and It avers
that thu said Denver A Rio Grande Railway
Company had full power and authority under
tbo Constltuikm mid laws of thu Statu of Colo
rado to make said agreements, and this defend
ant had full power and authority to make the
sumo mid to accept Iho provisions thereof and
the properly described therein..
This defendant further answering Bays that It
had lull mid ample authority under the laws
of thu State of Colorado and laws of the
United States to acquire,, maintain, and
‘operate thu railroads .lu thu said agree
ments mentioned, and their nopurte
nances mid appendages; mid for that pur
pose had authorlty.to make ami enter Into all
proper contracts mid agreements, ami that none
of the agreements hereinafter mentioned wore
ultra vires the power of this defendant or In vio
lation nt the Constitution or laws ot thu Statu of
Colorado or the nolley thereof. .
This defendant denies Unit when tho agree
ments hereinafter mentioned were made Unit
ttie said Denver A Rio Grande Railway Company
was about recovering from Us financial embar
rassments; Unit Us business mid earnings were
steadily Increasing, mid that Us net earnings
were sufficient to pay the current interest upon
its bonds os is In said bill alleged.
This defendant denies that the said Denver A
Rio Grande Railway Company has aluco I ho l it b
day of December, 1878, allowed or permitted the
earnings of Us railway lines to bo diverted, and
uot'to 1m applied for thu purposes contemplated
bv thu said deeds of trust, or that tbo complain
ant mid his cestuls quo trust have been damaged
or injured by said agreements; but, on the con
trary thereof, tills defendant navs that thu said
complainant assented to all al said agreements,'
ami by tils representatives mid agents induced
this defendant to enter Into aud execute thu
same, as hereinafter mentioned.
This defendant denies that It has with tho
knowledge and consent of tlie situ Denver A
Rio Graddo Railway Company, or otherwise,
misappropriated any of thu earuings.of the said
Denver A Rio Graudo RallwayCompsny, or Hint
the complainant slid bis cestuis quo trust have
been injured by any act or iblng which has peep
done hv the defendant, or that any act or thing
has been done to .thu detriment of the complain
ant mid his cestlus quo trust or lu fraud of his
rights or In violation of thu terms and coudltious
of said deeds of trust.
This defendant further answering says that it
Is Informed and believes Unit the said Denver &
Ulo Gaiulo Hallway Company Ims given out and
published that it was wholly insolvent and wltn
nut means to meet Us obligations due or to be
come due, and that It had a large floating debt
In addition tolls bonded Indebtedness mid the
Interest In armor thereon.
And tbls defendant admits (hat it has repeat
ed from time to time tho assertions so made by
the Denver & Hlo Grande Hallway Company,
believing that some of Its assertions might be
true, but of which it has grave doubts, since it
has violated Its trusts mid fraudulently appro
priated the proceeds of said 1801,600 of Donas as
hereinbefore mentioned.
This defendant further answering says that
It refers to any legal procccdinga It has had or
taken relative to Its assertions and allegations
therein.
i. tbls defendant denies that tho Denver As
Hlo Grande Hallway Company, 1U affair* and
InaaW wh'aHogS.* o^ ° r os la
And this defendant further answering savs
that on or about tho 18lh day of December. 1878,
thu Denver & Hlo Grande Hallway Company
delivered possession of Its railway and property
to this defendant, under thu agreements berdri
afteraoentloued. and that such delivery was
with Dio knowledge of the complainant, and
made by the procurement of himself and hla
ccslula que trust os hereinafter mentioned, and
that this defendant had possession of said prop
erly until tho lltb day of Juue,Tß7P, when tho
Denver & Hlo Grande Hallway Company, with
the aid and assistance of the complainant, took
forcible possession of the same and of a large
amount of other-property belonging to thia de
fendant
This defendant denies that (lie properly men
tioned in tiic said deed of (rust, or nnv of It.
lias, since the 13th day ot Deex-mber, 1878, been
waited or Its valnolmpalred, or that any quanti
ty thereof rcaulrcd for use has been removed
by the defendant.
This defendant denies that, since (he 13lh day
of Deccinlicr, the sold. Denver Si Klo Grande
Railway has not been properly operated and
maintained, or that It has been operated exclu
sively In the Interest of any other line owned or
controlled by this defendant or any • other com
pany, or that trains have been run Irregularly
thereon for the benefit of lines controlled by
Dlls defendant or ahy other company, or have
been in any manner or for anv cause run Irregu
larly, or that the malls to points along the line
of the said road have been delayed or have not
been delivered on schedule time, as required by
law*.
This defendant denies that the said Denver Si
RJo Grande Railway has, by reason of anv mat
ter or thing, In said hill of complaint alleged,
become liable to be fined or to have Its mall
contract canceled, and soys Unit sold Denver Si
Ulo Grande Railway Company has no mail con
tract not transferred to this defendant, or
Unit Us local business has seen destroyed,
impaired, or Injured, w that Us busi
ness amt resources have l>cen wasted, or that
anv arbitrary and excessive rates of fares and
freights have been established so ns to divert
the business and earnings ot said lines, or tluit
the business and earnings of said Denver Si Ulo
Grande Railway have been diminished, hut on
the contrary thereof, this defendant says that
the earnings of saki Denver Sc Rio Uruude Rail
way Company have, since the 13lb day of De
cember, 1878, steadily Increased.
Tills defendant dentes that the earnings of tho
Denver <fc Rio Grando Railway Company were;
prior to' the llUh day of December, 1878, suffi
cient to pay the Interest oo the bonds of enld
Company, as alleged in said bill, and while It Is
true that the earnings of said road from the 13lh
day of December, 1878, have not been sufficient
to par thu Interest upon the bauds uf tho said
Denver Sc Rio Grande Railway Company, vet
the comings of said Company have largely In
creased.
This defendant further answering says that
it has no knowledge, information, or belief rela
tive to the earnings of (he Denver Sc Rio Grando
Railway Company from the Ist day of July, 1878,
until the lOlh day of December, 1878, ana can
not state the amount thereof, nut this defend
ant says that from and after said iet dav of
July, 1878, until iho 13th Uoy of De
cember, 1878, purposely false and fraudu
lent accounts' of said earnings wero kept
and published by the said Denver & Rio Grando
Railway Company, and (bat in oucb false and
fraudulent accounts credit was given for trans-
Kortutlon of all materials used m the construc
on, repair, and operation ot said road, and by
such false and fraudulent accounts the earnings
wero made to appear much larger I ban they
wero in fact, that oo comparative statement of
actual earnings can bo made by reason of such
false and fraudulent credits to the earnings uf
said road.
This defendant has no Knowledge, informa
tion, or belief , rotative to me earnings of said
road since the 10th day of .Mine, 1870, and by
reason of the folso,' fictitious, mat fraudulent
credits to said earnings mmlo In the manner
hereinbefore stated, this defendant is unable to
estimate the comparative carings of said road
for tlmMlme, but 'this defendant admits that
the business of the country has since the 13th
day. of December, 1878, increased.
And this defendant says that tho increase of
business of said rand since l lie Ist day of April,
1870, would have been much larger had it not
been for the well-known conspiracy of the ofil
curs mid agents of the said Denver A Hlo Graudo
Railway Company to lake possession of said
road by force, thereby endangering the safely
of person# and jiropefty passing oyer the same.
Thin defendant denies that any act or thing
of this defendant bus demeaned tbe buslnesr of
said road, hut, on the contrary, this defendant
says Unit its management has largely Increased
the business n{ said road anil Us earnings.
lids defendant denies that the said Denver 6c
Rio Grande Railway he* at any time since (ho
18th nay of December, 1878, been in a bad nml
unsafe condition, for use, or that the track,
sn|tcr*.tructure, or rolling-stock used thereon
have not been maintained in good working order
ami condition, or that necessary in id proper re
pairs, renewals, replacements, alterations, and
additions have nut been made, so that the
condition nml value of said property have
been Impaired; hut, on the contrary
thereof,- this defendant savs Hint said
railway has been kept mid Is in a good nml
safe condition for use, that the track, super
structure, mid rolling-clock In use thereon lias
been maintained in goad working order ami con
dition, mid (lint (tie necessary and proper re
pairs, renewals, and
additions have been made, mid (but the condi
tion mid value of said property have been great
ly enhanced since the llltli day of December,
1876, und It Is now in n better condition and
worth more than It was at that time.
Amt tills, defendant further answering says
that It has no knowledge, Information, or belief
relative to the prices of labor and materials
when said road was constructed, ns Is in said
bill alleged, or relative to what discounts the
Denver & Rio Grande Railway paid for obtain
ing money, as is lu said bill alleged, nor is It ad
vised relative to the reason for the indubtednu-**
represented bv the bonds of the Denver 6c Rio
Grande Railway Company, as is in said bill al
leged. .
But this defendant is informed nml believes
that at the present time a railway through (lie
same territory mid with tho same gauge,
length, and qualltr, nml of tho same general de
scription, with equipment similar in quantity,
quality, und value, could be constructed and pro
vided at less than thu sum of $28,000 per mile,
but precisely thu sum such structure und equip
ment would cost, this defendant is unable to
state.
This defendant Is not advised whether the
properly mentioned lu euld deeds of trust is a
scant? unci inadequate security for the payment
of lli'o money wherewith the sumo is charged or
not. but this defendant denies that the property
Is charged with the sum mentioned In the hill of
complaint, and this defendant says that It the
business of said road should continue to Increase
the rental of said property to become duo from
this defendant will bo nearly or quite eufllclent
to pay tile interest hereafter to become duo
upon the bonds of the said Denver & Klo Grande
Hallway Company, and that futhcr increase of
business may bo expected as soon as this do*
fcmlnut completes Its lino to Lcadrllle, now In
process of construction.
This defendant further answering Miys that it
has ho knowledge, information,or belief relative
to the non-payment of taxes ti|>on any of said
properly as is in sold bill aliened, but If there
tins boon uny dclault in (but respect such do*
fault occurred prior to the IJilii day of Decent*
ber, 1878. with the knowlcdgo of the complain*
ant,'and such default has continued with Ida
Ivuowkd&u and was concealed by the complain*
ant from this defendant at the time of its enter*
ing into the agreements hereinafter mentioned.
And this defendant further answering save
that It has no knowledge, information, or belief
oilier than as herein stated relative to any sales
of said property for unpaid taxes, and if any
such sales have taken place ther occurred prior
to Uiolllthdoyof December. 1878.
This defendant denies that the wages of cm*
ployes engaged in the operation of said road, to
nnv considerable extent, remain duo or unpaid.
The pay-day of this defendant is on or about the
mill day of each month, for all labor doao
prior to tbu Ist day of such month; and this
defendant says tluil on or about the 15th
day of May, 1871). being the doy on which tlio
pay-car of this defendant was on the Hue for the
purpose of paying Us employes, payment was
made to all of its laborers who requested pay*
ment, and substantially the entire sum then
duo was paid; and that'oh thoTSth day of
June, 1870, this defendant was unable to run Its
nay-car over tlio road, as It had been accustomed
to do for the payment of. Us laborers, and per*
sons to whom the Company was Indebted were
requested by this defendant to apply to \V. W.
Horst for payment, and all persons who have
made application to said Horst for payment
buvu been paid or their accounts have been
transmitted. ami.will bo paid as soou fs current
chucks for tiiu same can be returned.
The defendant denies that the Denver & Rio
Grande Hallway Company has allowed the earn
ings of the property in said mortgages motioned
to ho received by this defendant in violation of
the rights of the complainant, or that Uto same
have been mlsauulled, or that bUu same have
been misapplied lu any manner whatever, or
that this defendant has uegied by and with said
earnings to pay taxes or interest on bonds nr
wages of employee, or to make necessary re
pairs, renewals, mid replacement of ties, rails,
chairs, rolling-stock, equipment, material, mid
supplies, as Is in sakl bill alleged.
This defendant denies that it has asserted any
control over the property of the said Denver «fe
Klo Grande Hallway Company, or its otUccra,
other than it was authorised by law so to do;
that It has operated said read, or any part
thereof, other than for the best Interests of the
Denver <fc Hio tirundo Hallway Company, and
for the benefit ol this defendant, as is m said
bill alleged; or that it has received any benelit
other than such as it was entitled to receive
from Uto operation of said road.
Defendant admits tliat it controls a line of
railway from Kansas City lu the Bute ol Mis
souri to La Junta, and from La Junta to Pueb
lo, a point on the Denver & Hio Grande Hall
road In the State of Colorado, a distance uf oyer
COO miles, and from La Junta to Trinidad, lu
said Slate.
This defendant denies that It has been the
policy of the managers of this defendant to In
crease the traQlc over its lino to the detriment
ot the lines of the Denver & Uio Grande Hall
way Company, or that, with tliat end lu view, a
pooling arrangement or contract was entered
Into by and between tiio managers of this de
fendant, tbe Kansan Pacific Railway Company,
the Union Pacific Railroad Company, and trio
Colorado Central Railway Company, for n di
vision of territory whereby business has been
diverted from the railroad of the Denver & Rio
Grande Railway Company and discriminations
made against but on the contrary thereof this
defendant mva the arrangement made by it for
a division of business with some one or more of
the railroads In said bill of com plaint mentioned
was largely for the bcneilt of the said Denver &
Rio Grande Railway Company, and by It said
Company received at least Id per cent more
business than It bad ever received before from
the same sources or could obtain by any oilier
arrangement or means.
This defendant denies that the said Denver &
Rio Grande Railway Company was n competing
lino with any of the lines controlled by this de
fendant for the business and traffic of Southern
Colorado and New Mexico, at Trinidad or Kl
Moro coal-fields, or the surrounding country, tut
Is In mid bill alleged.
This defendant denies that Uie managers of
this defendant and other persons Interested
lliercln, or other lines by It controlled, for the
purpose of ortlilcinllr stimulating through
business from the Missouri Hirer and Increas
ing tiic earnings of such lines, or for any other
Improper purpose, have established,discriminat
ing rates to the injury or prejudice of the local
business in Colorado of the Denver & Rio
Gramlo Company's lines, or to the Injury and
detriment of the complainant and bis ensiles
quo trust, or have failed to meet nnd fulfill the
requirements of the public mid Uie State, or of
the Denver Rio Grande Railway Company, or
In Us duties to them, whereby Its corporate ex
istence bos been endangered, as la In said bill
alleged.
This defendant denies that it has omitted to
provide rolling stock and equipment and other
facilities for transacting the legitimate business
on said lines mentioned In said deeds of trust to
the said complainant as Is in sold bill alleged or
ha* Improperly benefited the other roads where
in this defendant Is Interested, or has Improper
ly used said property to Its own benefit or ad
vantage, or bos transported thereon any quanti
ties of fncl, materials, supplies, or passengers,
without charge, or lias removed materials, sup
plies, or roiling stock to the detriment of the
earnings of the property mentioned in the deeds
of trust to complainant, or has Injured the busi
ness facilities of the Denver & Rio Grande Rail
way by taking up side-tracks, or in any other
manner whatever. ,
Tht* defendant further answering says that It
h entirely solvent, and able to pay all of its 11a*
blllUcs, and is responsible and able to perform
nil acts required by it to be performed under
the agreements hereinafter mentioned, and that
the rental under said agreements is more than
tlics sold rood can earn in any other manner, and
that for the reason that such rental would bo
largely to the benefit of the complainant and his
ccsliu* quo trust, this defendant was urged bv
the agent of Um complainant and said bond
holders to enter Into the sold agreement* here*
luafter mentioned.
This defendant dentes that it has no money
Invested in the property need on the* Denver 6c
Rio Grande Railway other limn It has received
from the earnings of said property, as is In said
hill alleged, but on the contrary thereof, this
defendant says, as Is well known to the com
plainant. It has Invested a large sum of money
as hereafter mentioned in the property useil
and to be used in the operation of said road.
Defendant denies that It has in any manner
manipulated the said property or its revenue
accounts, ns Is in said bill alleged, or has kept
such accounts in any manner bo as to prevent
ascertaining the true and correct revenues
thereof, and says that the said property has
been honestly managed fur the benefit of the
said Denver it Hlo Grande Railw.iv Company
and its creditors, aud that In no manner other
wise could said property earn os much es it has
earned mid will earn under the provisions of
the agreements hereinafter mentioned.
This defendant denies that it, or persons in
its Interest, nod by it supported, hare barnssedor
embarrassed tbe Denver & Rio Grande Railway
Company bv costly litigation or bare prevented,
or sought, or endeavored to prevent the said
last-named Company from ttlllir.lng Its fran
chises and liberties for tlic benefit of its cred
itors and stockholders, but on the contrary
thereof, this defendant ears that tho complain
ant mid his cestlus quo trust have bv all means
in their power, by force, violence, and fraud, en
deavored to ruin the said property and deprive
tills defendant of the money which it has paid
for the same.
This defendant denies that the Denver & Rio
Graudo Railway Company tins or ever had any
such road os Is mentioned in the bill of com
plaint which It has not completed or construct
ed, and cays that it has no knowledge, informa
tion, or belief relative to the BUS miles of road
lu said bill of complaint mentioned, which, ac
cording to the complainant’s own statement,
has neither route nor termini.
Tills defendant denies that the Denver & Rio
Grande Railway Company has nnv such fran
chises or property as is in said hill alleged.
Tills defendant further answering says, that
it has no knowledge, Information, or belief
relative (o the value of the pretended rights
and (ranchies of the said Denver 6s Rio Grande
Railway Company, If honestly used by it, nor
what such honest user would enoblc It to pay to
complainant, but- this deicndnnt denies that by
litigation it lias deprived tlie Denver 6c Rio
Grande Hallway Company of any right or Inter
est belonging to It, or that it or, persons la its
interest have supported, or aided, or assisted
litigation, or delayed or prevented tho Denver
& Hlo Grande Railway Company from recover
ing Irom its financial embarrassment with tho
view and in the hope in said bill mentioned or
otherwise, or Unit it has endeavored to appro
priate any franchises or property belonging to
said Denver 6c Rio Grande Railway Comnany on
the unconstructed portions of its said
railway not Included la tho said deeds
ot trust, or that It has endeavored to
compel the said Denver 6s Rio Grande Rail
way Company to abandon any of its rights or
sources of Income as Is In said bill alleged, br In
any other way proposed to injure tho said Den
ver & Rio Grande Railway Company or Us Inter
ests, or to prevent tho construction of railways
under the charier of (he Denver 6c Rio Grande
Railway Company in extension of its construct
ed road, for the purposes fa sold bill men
tioned, or for any other purpose.
This detendant denies that it bos usurped or
assumed control over tho property mentioned
in said deeds of trust, with the intent and for
tho purpose of defrauding the complainant’s
cestius (jnc trust, as is in said bill mentioned,
und domes that any false or inaccurate accounts
were ever kept or that any false returns were
even made of the business or Income of tbe said
Denver & Rio Grande Hallway Company’s lines
or that tho same were so managed or con
trolled ns to impair the earnings or earning
capacity of the said Company, or for the pur
pose of Impoverishing or ruining tiie said Den
ver «fe Rio Grande Railway Company’s lines or
depreciating the value thereof or of Its bonds,
his is in said bill alleged.
Delendont dentes that said trust property was
In danger or peril at the lime It was In the ikm
session of this defendant; but tbia defendant
admits (Iml the Denver 6c Rio Grande Railway
Company, by tho aid and with tho assistance of
the complainant, has forcibly taken possession
of said property from this defendant, and this
defendant believes that unless said property is
returned to this defendant it will become utterly
valueless and unable to earn 1U operating ex
penses.
This defendant refers to the said deeds of
trust respectively for any pledges therein con*
tnlnctl of wild property, mid this defendant ad
mits tlmt said property can more conveniently
bo operated a* a whole, but this defendant denies
that (lie holders of bonds mentioned in one of
said deeds of trust have any lion upon the prop
erty mentioned lu Urn other deed of trust, or
that said property Is hold In common for the
benelit of said trusts respectively.
This defendant denies thatanvappUcatlon has
been made to the complainant bn behalf of the
holders of said bonds Issued under said deeds of
trust or uf the holders of the unpaid interest
thereon to represent them, mid In their behalf to
enforce the terms and conditions in satd deeds
of trust contained, and protect their Interests as
in said bill alleged.
Tills defendant admits that no proceedings at
law or otherwise are now ponding to enforce the
trusts and conditions ot said deeds ot trust, as
is in said bill alleged.
This defendant denies that by reason of the
non-payment of said several sums of money re
quired to bo paid according to the tenor and
ellect of said bonds before mentioned in said,
several deeds of trust as is lu sold bill alleged,*
the whole uf tlm principal sums of said bunds
has become due and payable, os Is lusaid bill
alleged, or that the complainant la entitled to
enforce Uie terms and conditions of sold deeds
ot trust by taking possession ot the* property
thereby convoyed or to manage and operate the
some, or effect a sale thereof, ss la la sold bill
alleged.
And this defendant farther answering says
tliat heretofore, to-wll, on or about the 4th day
of October, A. D. JB7B, Its officers had a confer
ence with Sebastian B. Schlesingcr ami Joseph
D. Putts, a committee ol the bondholders of the
Denver <k Hio Grande Hallway Company and
also representing said Denver &> Rio Grundo
Hallwsy Company and William J. Palmer, Presi
dent thereof, for the pun*** of agreeing upon
the terms of a lease from the said Denver &
Hio Grande Hallway Company to this defendant:
and that at such conference sold Committee of
bondholders exhibited to this defendant a
statement In writing of the indebtedness of the
said Denver & Hio Grande Hallway Company as
of the hist dav of August, IbTS, us shown from
its books, in which statement it was slated that
said Company held of Us bonds for the
purpose of funding |Wd.COO uf unpaid interest
upon the bonds of said Company, falling duo on
tflo Jut day of Mar, 1877, the Ist dar of No
vember, 1877, and tnc Ist dny of May, 1878, and
that such -statement, so submitted to this de
fendant, was relied upon In making Uic agree
ments hereinafter next mentioned, a coov of
which said statement i< herewith filed, marked
Exhibit No. 9; and that on the day and year
la.it aforesaid an agreement was mode between
the officers of this defendant and the officers of
the Pueblo & Arkansas Valley Railroad Compa
ny and the agents ot the said Denver «fc Itio
Grando Railway Company and the representa
tives of Us said bondholders, a copy ot which
agreement Is herewith filed, marked Exhibit
No. 8.
And this defendant farther answering says
that said agreement last mentioned was after
wards, to wit, on the sth day of October, 1878.
approved by the President of the said Denver &
KIo Grande Railway Company, he havltig full
power and authority to act for the said Com
pany In making said approval. -
And this defendant further answering says
that afterwards, to wit, on the 10th day or Octo
ber, 1878, the officers of the said Dcnver&Rlo
Grande Railway Company executed a lease of
that date to this defendant, or nil of the con
structed road of the said Denver ds Hlo Grando
Railway Comimny, upon certain terms and con
ditions In said lease contained, a cony of which
Is herewith Died, marked Exhibit No. 4; and
that, on tho dav and year Inst aforesaid, a cer
tain oilier agreement was entered Into between
Aldcn Spoore mid William J. Palmer asanart
and parcel of Ute agreement between Uie par
ties. a copy of which agreement Is herewith
filed, marked Exhibit No. 5; and that, on the
same day and year last aforesaid, a certain other
agreement was entered Into between said par
ties, and as part ami parcel of said agreement, n
copy ot which Is herewith filed, marked Exhibit
No. 0.
And Ibis defendant further answering says
that prior to tiiu execution of the said several
agreements hereinbefore mentioned, marked
Nos. 4. 5, and G respectively, the said Sebastian
B. Sehleslnger, William J. Palmer, and Theo
dore F. □, Meyer, solicitor of tho complainant
In Ibis cause, and Mien acting as the solicitor
and agent of the said complainant, made to this
defendant a verbal statement nf to Its Indebt
edness, correcting said written statement as to
Its unsecured Indebtedness but in no other par
ticular whatever.
Tins defendant further answering soys that It
relied upon sold statements that $801,500 of the
bauds of the Denver & Rio Grumle . Railway
Company were to bo retained to fund SGI3,COO
of coupon certlflcatca and coupons authorized
to be converted Into sold certificates.
And this defendant further answering says
that at the time last-mentioned statement was
made to this defendant, as aforesaid, it was
represented to this defendant by the said Will
iam J. Palmer, representing die said Denver &
Rio Grande Railway Company, and assented to
hr the sold 8. B. Schleslnger, as the representa
tive! of* dm bondholders, and by the said
Theodore F. It. Meyer, as the agent and
solicitor of the said complainant, that the said
($01,500 of bonds were set apart as a trnst fund
for the purpose of exchanging the same for said
coupon certificates or coupons which might ba
converted into said certificates, and if not so ex
changed that said bonds were to be sold ami the
proceeds applied os a trust fund for the purpose
of paying raid coupon certificates and coupons
which might be converted Into such certificates.
This defendant further answering says that
the said Potts and Scblcslngcr bad before that
time represented to this defendant that the In
debtedness of the said Denver &RIo Grande
Railway Company would hot exceed the sum of
$22,00f pur mile, but upon said verbal statement
of such unsecured indebtedness it appeared that
the entire indebtedness exceeded the said sum
of S23,CGI per mile, and thereupon the said
Denver «fc Rio Grande Railway Company In mak
ing sold agreement undertook »o p.iv such ex
cess of Indebtedness, but with (be distinct under
standing between the parties that the said $804,-
500 of bonds of the sale! Denver & Rio Grande
Railway Company should be used for the sole
purpose of poring Mid coupon certificates or
coupons so authorized to bo converted Into such
certificates.
And this defendant further answering savs
that, relying upon such statements, the agree
ments hereinbefore mentioned were entered
into by this defendant.
And this defendant says that at the time said
agreements were entered info It was well known
to the said Theodore F. H. Mover and the said
William J. Palmer that a suit was pending In
this court to enforce the payment of coupons
Tailing due May 1. 1877, Nov.l, 1877, and May 1,
1878, but the said Theodore F. 11. Meyer .and
the said William J. Palmer fraudulently con
cealed the fact that such suit was pending from
this defendant for the purpose of Inducing It to
enter Into the agreements hereinbefore men
tioned.
And this defendant further answering snrs
that the said lease hereinbefore mentioned,
marked Exhibit No. 4, was ratified bv the Ex
ecutive Committee of this defendant, having
the authority of the Board of Directors of said
Company for that purpose, anil that said lease
was afterwards, to wit, on the Cth dnv of
November, 1878, ratified by the Board of Direc
tors of the said Denver & lUo Grande Railway
Company, and on the 20th day u’f
November. IS7S, was ratified by the stockholders
of the said Denver «fe Rio Grande Rahway Com
pany at a meeting duly called for tint purpose,
w ith a full knowledge of ail the matters and
things hereinbefore stated.
And Ithls defendant further answering savs
that the said Denver <!c 1110 .Grande Railway
Company, on the 10th day of December, 1878, n't
the request of the said bondholders, authorized
William J. Palmer to deliver said lease, so rati
fied as aforesaid, to this defendant, whenever
the oilier provisions of the agreements between
the parties should be compiled with, with a full
knowledge of all the matters and things herein
before stated.
And this defendant further answering says
that the said William J. Palmer, In accordance
with the said agreement between him and the
saKl Alden Bpcarc, a copy of which is herewith
filed, marked Exhibit No. 5, delivered toT.
Jefferson Coolidge 42,510 shores of the capital
stock of the said Denver Rio Grande Railway
Company, and the said Alden Bpeare delivered
to sold T. Jefferson Coolidge for the purposes
of said agreement 8.502 shares of the capital
stock of the Pueblo & Arkansas Valley Railroad
Company, and that said Palmer has received
8,602 shares of said last-mentioned Company of
the value of at least $210,000.
This defendant further answering says that,
delays having occurred In making the appraisals
of personal property sold to tins defendant by
said lease, and It being desirable that this de
fendant should take possession of the demised
premises, it was agreed between the said parlies
that the said Denver & Ulo Grnuilo Railway
Company should deliver possession of said de
mised premises to this defendant on the 18th
day of December, 1878, and (hut this defendant
should deposit with Sebastian B. Hchlcslngor
the sum of $75,000 on account of property so to
he appraised as aforesaid for the use of the said
Denver & Rio Oramie Railway Company, and a
further sum of $75,000, whereof so much was
to 1)0 paid to the said Denver & Rio Gramiu
Railway Company as should bo necessary, in
addition to t!m firat-mouiloncd sum of $75,000
to pav for said personal property, so to be ap
praised os aforesaid, and the residue of said
sum of $75,000 was to bo returned to this de
fendant.
And this defendant further says that pos
session of said road, rolling stock, mid personal
property was delivered to Hits defendant on
the l!tih day of December, 1878, and this de
fendant deposited tho said sum of $150,000
with the said Sebastian R. ttchlcalngcr for the
purposes hereinbefore mentioned, and that this
defendant thereafter, until the llthday of June,
1879, operated said road in accorUunco with the
terms of said lease, and that the said Denver A
Rio Grande Railway Company received the said
sum of $75,000, so deposited with tho said
Pobastiau 1). Schlcslnger, and applied tho same
to its own uis. ,
And this defendant further answering says
that the dellvcrv of the possession of the said
railroad, rolling'stock, and personal property of
this defendant was mode by thu authority of
said Denver A Rio Grande Railway Company,
and with thu knowledge and assent of tho said
complainant. .
And this defendant further answering says
that on Uio 37th day of December, 1878, an ap
praisal woe made of the personal property so
purchased by this defendant at the sum of
$143,108.23. ,
And this defendant further answering says
that after sakl appraisal was made, the said
Denver A Rio Gruude Railway Company claimed
that a small number of articles, not exceeding
S4OO in value, wuro inadvertently omitted from
sold inventory, and this duleodant avers (lint ft
was rcadr and willing to pay fur any such ar
ticles (if 'there wore anv). and that thu money
deposited with the said Sebastian U. Behlcsluger
was ample for that purpose.
And this defendant further answering says
that It has In all things complied with the terms,
stipulations, and agreements In ssid lease con
tained, oud with the several agreements herein
before mentioned, on Its part to bo kept aud
performed.
And this defendant further answering saya
that heretofore, to-wit: on the Both day of No
vember, 1878, tho sakl Denver A Rio Gronda
Railway Company, having ratiliod and confirmed
said lease os aforesaid, aud in anticipation of the
delivery thereof, executed and delivered two sev
eral assignments of all Us right, title, aud Inter
est under said lease, and to tho rents therein re
served to the complainant, in and by which as
signments the said Denvir A Rio Qramlo Rail
way Company recited that it, the Denver A Rio
Grande Hallway Company, was about to lease
and demise its constructed railway to this de
fendant for tho rental ana upon tho terms and
conditions theretofore agreed upon by the said
parties, and that thu said property so to bo do-
•raised was part and parcel of the premises eor-i
crcd by the mortgages hereinbefore mentioned,
and conveyed to too said Loots 11. Merer, as
trustee, and, thereupon, said Denver A KIo
Grando Railway Company assigned all its right,'
title, Interest, claim, and demand In, to, and
under sold lease made or to bo made, ami to the
rents and moneys therein reserved and agreed
to ho paid, or to be therein agreed,' and
to ho ascertained and determined os therein pro
vided or to bo provided, and according to tho
terms and provisions of said IcoJo, together with
all remedies at law or In equity and powers of
re-entry'against this defendant for tho recover/
of the aforesaid rent or any arrearages thereof,-
or damages for waste or for violation of any of
the provisions, covenants, or agreements In said
lease contained, or which should be contained
therein on the part and behalf of this defendant,
a copy of which several assignments are herein
Hied, marked Exhibits Nos. I and 8.
And this defendant farther answering says
that relying upon Dm good faith qt Uie said com
plainant, upon his representations, and upon
tho representations of the said Joseph D, Potts,
Sebastian B. Schlesengcr, Theodore F. 11. Merer,
agent of the said complainant, and William J,
Palmer, It entered into possession of Uic sold
property so demised to it, and assumed - the re
sponsibility of the said lease and other agree
ments.
The defendant further answering says that,
relying upon said statements, so made as afore
said, this defendant, on or about tho Ist day of
May, 1879, advanced to the said Louis 11. Meyer,
the sura of $168,203.75 for the purpose of nav'
Ing the Interest falling aue upon tho bonds of
tins sold Denver & Rio Grande Railway Compa
ny on the Ist day of May, 1879, and Ute Interest
unon $210,547.50 ot coupons falling duo May 1,
1577, Nov. 1,1577, and May 1,1878, hereinbefore
mentioned: and that the said Meyer, well-know
ing Unit this defendant believed, umi bod reason
to believe, that the Interest which fell duo ou
the Ist dav of Mar, 1877, or the Ist day of No
vember, 1577, and tlio Ist day of May. 1878, had
been provided for by the trust fund hereinbefore
mentioned, fraudulently concealed from this de
fendant the matters stated In his said, bill of
complaint, and by such fraudulent concealment
Induced this defendant to advance him the said
sum of $183,203.75 for tho purposes aforesaid,
the said Meyer well knowing thutthlsOofendant
would not have advanced sold sum of roonev
last mentioned If the matters and things stated
lu his said bill of complaint hud been known.
This defendant, further answering, says that
for a long time past, 10-wlt: several years, tho
said Theodore F. 11. Meyer has acted as Ute
agent and representative of the said Louis 1L
Meyer, and has been the solicitor of the sold
Denver & Rio Grando Railway Company, and
that Hanson A. Kfsley, heretofore appointed
Receiver In this cause, for several tears past has
boon the solicitor of the said Denver <fc Rio
Grande Railway Company, and was its solicitor
in the suit of tho said Louis Q. Moyer hereinbe
fore mentioned. "
And this defendant further says that the said
Denver Rio Grande Railway Company, its
President, and solicitors aforesaid, entered Into
a fraudulent conspiracy to obtain possession of
the property so demised to this defendant, and
for that purpose procured the Attorney General
of the State of Colorado to Qle a bill In the Dis
trict Court -of the State of Colorado
for Costilla County, for the . purpose
of obtaining an injunction against this
defendant retaining possession of sold prop
erty unci operating said road, and that snch bill
was (lied In said Court, and an order for an in
junction was fraudulently procured, bat before
said injunction was Issued, sold cause was re
moved to the District Court of the United States
for the. Western Division of Colorado; that
notwithstanding such removal, the said Palmer,
Merer, and Rtsler, combining and confederating
together, procured cue William U. Lawrence,
pretending to be the Clerk of the said District
Court of Costilla County, to issue a writ of In
junction restraining this defendant from retain
ing possession of said road and property and
from using the some, which said writ of Injunc
tion was wholly imantborteed and veld, bat
nevertheless the said Palmer, Risky, and Moyer,
combining together under color of said void
writ of Intimation, by force and fraud, unlaw
fully obtained possession of the said Denver &
Rio Grande Railway, Its rolling-stock and prop
erty used in connection (herewith, together
with a ‘largo amount of proportv belonging to
this defendant to which the said Denver & Ufa
Oraiidu Railway Company had no claim what
ever.
This defendant, farther answering, says that,
heretofore, 10-wit: on the ■ 11th day of June,
1870, it made on application to the District
Court of the. United Btales for Uie Western
Division of Colorado lor tlie rostltuUon or'B.Ttcr
property: that the said Denver «fc Rla Grande
Railway Company, the said William J. L’almer,
llanson A. Ulslcr, and Theodore F. 11. Meyer
had notice of such application,' and that alter
the hearing thereof was commenced and before
the final decision thereof, 10-wlt: on
the 14th day of Juno, 1670, the hill
In this cause was . filed, and eaid
llanson A. Rlelcr appointed Receiver upon the
voluntary appearance and content ol the said'
Denver & Rio Grande Railway Company, and
witnout any notice to this defendant: that tlm
Said proceedings wore commenced (or the pur
pose of evading any order which the District
Court of the United States for the ‘Western Di
vision of Colorado might make relative to the
rcsUtu'Jon of said property; thutafterwards, to
wit: on the 25th day of June, 1870, the said Dis
trict Coart of the United Stats ordered the said
Denver «fc Rio Grande Railway Company, Its
ofilcors, agents, servants, etc., to restore said
property to this defendant, which (ho said Den
ver & Rio Grande Railway Company declined
to do on account of the fraudulent proceedings
caused to be Instituted bv it, in which the said
llanson A. lUsley was appointed Receiver, as
aforesaid. •
And this defendant 'further answering, eayr
tliai In pumianeo of said fraudulent con
spiracy, tbo said Denver A Rio Qraudo Railway
Company and Us said Receiver, took forcible
possession of o largo amount of freight m the 1
possession of this defendant as a common car
rler, upon which a largo amount of money, to
wit, the sum of $15,000, was duo as charges for
thu transportation thereof, and that by reason
of having obtained such possession they extort
ed from the consignees of such freight said
amount of money so duo for the carrtsgu of tho
same, and that tho said Denver A Rio Grande
Railway Company and the said protended Receiv
er took forcible possession of a large amount of
Umber, Iron, and other property belonging to
this defendant, which has been partially wasted
mid destroyed, and the residue of which they
now retain. •
This defendant further answering says that ik<>
has not only paid Urn 970,000 hereinbefore men* >
tloned to and for the use of tho Denver A Rio*
(Irundo Railway Company, hut It has bought!
live locomotive engines, costing $7,000 each, *
making la the aggregate $85,000; seven passen-<,
gcr cars, costing $2,400 each, making In the ag-v
gregata 610,800: 100 Rat cars, costing s3o3f
each, and 180 box cars, costing $40%
each, making an aggregate of $82,00(V
which engines and cars were for pso on the line
from Denver to Lcadville; 3,000 tons of steel a
rolls, costing (including transportation) $55 nor
ton, amounting in the aggregate to $110,000;
and a corresponding quantity of splices, bolts,
and spikes, costing (including transportation)'
$12,010; 80,000 tics at 35 cents cecb, amounting
to $30,000: and largo amounts of other prop
erty, all of which were (or use on the lino of the
Denver A Rio Orando Railway, awl Ibis de
fendant has paid for all of said property, or
obligated itself to pay for tho some, amt fas
which it has received no compeosaUon whatever.
Tills defendant further answering says that
on the lllth day of December, 1878, the Denver
A RJo Grande Railroad Company was
.to tho Philadelphia A Colorado 1 rust Equip
ment Company and the Raldwlo Locomotive,
Works in large sums of money for property'
purchased of said Companies respectively by tho
said Denver A Rio Grande Railway Company*,
and Uiflt in mid by the terms of said purchase*
said Companies were entitled to retake poasca
siou of sold property If payment was not made
therefor, and this defendant was obliged to pay
to said Companies tho sum of about SIH,OOO,
and assume further payments to ho made upon
the said property, in order to retain possession
of the same. . . • • lt
This defendant further answering says that
the payments made and obligations assumed by
it were made with tho knowledge of the sold
complainant, and were for the use and bcnellfc
of said railway property, and form no part of
the operating expenses of said railway.
This defendant further answering says that ,
It has kept a true and just account of all tho
earnings of the said road, and such accounts
have been at all times open to tho inspection of
the Denver A Rlu Grande Railway Company
and its officers, and this defendant ■ herewith
files (marked Exhibit No. 1U) a true statement
of tho earnings of said railway from the 18th
dar of December, 1878, to tho 80th day of April,
1870, including the expenses of operating tho
said road for the same Ume.
This defendant furUkk answering says that It
has not been able to moke up a statement of
the earnings of said road from the 80th -day of
' April, 1879. to tho 10th day of Juno, 1879, by
reason of the depredation committed by the
said Denver A Rio Grande Railway Company
tnd Its olllcora, and tho said Receiver, of the
books and papers of the Company, under color
of an order of the Hon. Thomas M. Bowen,
Judge of the District Court of Costilla County,
from which this defendant lisa thus far been un
able to obtain any relief. •• ... . . A .
And this defendant docs and will insist that
the Receiver heretofore appointed in this came
should bo discharged, uud that this defendant
should bo allowed to retain possession of said
property until it Is reimbursed the sums lost by
it by reason of tho depredation committed by
the said Denver A Rio Grande Railway Com
pany tdul its oUlcers, uad thu said Receiver, and
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