Samuel Blatchford

“ The defendants Stout, Fish, D. R. Garrison, Samuels, W. R. Garrison, and C. K. Garrison were, during all these transactions, up to the commencement of the foreclosure suit, either directors of the Atlantic Company or of this plaintiff, or creditors of, or otherwise interested in, the Atlantic Company, and benefited by said frauds, and were fully cognizant of the creation of said fraudulent bonds and of said fraudulent acts. and are not holders in good faith of said third mortgage bonds. ”

“ The allegations in the bill, of facts showing the existence of hostile control of the corporate affairs of the plaintiff by its directors, from before the bringing of the Ketchum suit till after the foreclosure sale, are entirely adequate as against a demurrer. Under such circumstances, mere knowledge by or notice to the plaintiff, or its directors or officers, or more or less of its stockholders, is unimportant ”

“ The court added: 'But the demurrer goes further, and raises the question whether the bill and exhibits do not show affirmatively that the present complainant, through its stockholders, had notice of the foreclosure suit, knowledge of the defense now insisted upon against the third mortgage bonds, and ample opportunity to make that defense. It is, we think, very clear that, in considering the question of notice, no distinction can be made between the corporation and its officers and stockholders. ”

“ The bill of complaint fails to aver that its stockholders were at the time ignorant of the various facts alleged as occurring and existing prior to the foreclosure suit, or during the pendency of said suit, or that they were in any way precluded from making any defenses that they might have to said decree of foreclosure, all which averments, under the facts and circumstances of this case, should be made to appear by the bill of complaint, in order to entitle it to any relief or discovery. ”

“ The defendant C. K. Garrison agreed with Andrew Pierce, Jr., Baker, and D. R. Garrison that if they, controlling, as they did, the defense to the Ketchum suit, would consent to a decree therein in the manner and form in which consent to the entry of said decree was given, he would pay all their liabilities in connection with the Atlantic Company. ”

“ C. K. Garrison, on his examination in the Ketchum suit, said that he was one of the complainants in that suit, and the owner of over $1,500,000 of the third mortgage bonds, and represented the owners of the rest. By the terms of the lease the Atlantic Company undertook to pay all the debts of this plaintiff, as well as all operating and repairing expenses, and all interest on bonds to be issued after the date of the lease, for extending its lines, buying rolling stock, and rentals. ”

“ There are two demurrers to the bill,-one by the Missouri Pacific Railway Company, O. Garrison, D. R. Garrison, Samuels, and Baker; the other by Ketchum, C. K. Garrison, Pierce, and Stephens. The two demurrers are substantially identical, wxcept that, in the first one, O. Garrison, D. R. Garrison, and Samuels allege that they are not proper or necessary parties, and in the second one it is alleged that the circuit court has no jurisdiction over the suit. ”

“ Prior and subsequent to November 1, 1875, Baker, one of the directors of this plaintiff and its general attorney, with Andrew Pierce, another director, and others unknown, confederated with some of the defendants herein to institute proceedings to foreclose the third mortgage for the entire $4,000,000, in order to obtain the entire property for themselves for greatly less than its real value. ”