Show AN IMPORTANT SUIT A suit of more than ordinary importance artance has been brought in the third district Ni district strict court against the salt lake city railroad Company Francis armstrong walter P reed A W mccune B R WC hambers spencer clawson and joseph S wells the plaintiffs being samuel M jarvis and roland B F conklin in their complaint the plain plaintiffs state that at the time the company was or originally igi nally incorporated january 26 1872 its capital stock was valued at 0 divided into shares to be issued at the rate of per mile for aae each b mile of single track of railway constructed which at that time was not to exceed nine miles on january so 1878 the articles of incorporation po ration ioD were amended providing for the further construction of the road and on the of february 1889 the articles of incorporation were amended increasing the capital stock to 1 1 divided into shares to be I 1 issued at the rate of per mile for each mile of single track so constructed and making it the purpose of the company to construct maint maintain aill and 0 erate lines linee upon each and all of the streets of this city to the full extent and terminal lines thereof M since the date last mentioned ti wed no other amendments have been made to the charter of the company in anywise anyei so affecting the capital stock and durpos es of the company and beginning with july 1889 the plain plaintiffs tinis have from time to time purchased 2389 shares 2167 47 4 7 shares being beine held by J jarvis arris CoD conklin klin shares by priscilla jarvis 10 57 shares by samuel M jarvis and 10 67 57 6 7 shares by roland C conklin notwithstanding the purposes of the incorporation co ration limits its powers as stated to t the e building of lines within the corporate limits of the city the board of directors the defendants have without the consent of the plaintiffs and against their objections constructed and are now operating lines of street railway outside of the corporate limits of the city that the number of miles so go constructed and operated is two and one fourth miles that the cost was that at the time of construction the finances of the company were in an embarrassed embar assed condition that there was no business necessity for the construction st of the extra mileage of railway that the same was constructed through territory at a time when it was well known that the same would not be profitable that the corporation of the extra mileage necessitated the purchase e and equipment of extra motor power and cars and the employment of an extra force of motormen and conductors and in the repair department and has otherwise increased the daily expenses of the company that the amount by which the daily expenses is increased creased is largely in excess of the earnings of these portions of the railway system and that the operation thereof is at a great loss of money the plaintiffs further allege that since july 24 1889 the number of shares of stock actually issued has not exceeded shares and of that number they own 2389 2889 that the officers and directors of the company well knowing that the building etc of railway lines outside of the limits of the city was contrary to the charter powers of the country and that in order to amend the articles of association so as to give the right to build such outside lines of railway it would be necessary to have a vote at a meeting of the stockholders called for that purpose which should represent at least two thirds of the capital stock held a meeting in this city on april 1891 at which 47 shares were represented the plaintiffs not being present nor any portion of their stock represented an amendment to the articles of association was proposed whereby further extensions of the railia railway y system were to be authorized The he meeting says the complaint was an annual one and the plaintiffs whose residence is at kansas city sent notice that they could not attend and requested that the meeting be adjourned until may 20 1891 aud ad as shown by the records the request was disposed of as follows on motion of R K U chambers second ed by mr wells wella the following resolution was ordered spread upon the minutes u tea of the meeting resolved that in consequence of the inability of S M jarvis and R R conklin to attend this annual meeting of the stockholders stockholder of the salt lake city railway company that this an annual nual meeting be adorned ado until n ti I 1 et may y 30 1 1891 8 91 this th resolution ol 01 tio n received 1 d no 0 second od and was therefore not nol voted on notwithstanding the large interests of the plaintiffs the complaint goes on and well knowing that they would oppose the extending of the lines of railway of the company and increasing the indebtedness and operating expenses of the company for such pur pose se A W meccune walter P beed B R C chambers and spencer clawson controlling said meeting of shareholders refused to in any way recognize or pass upon the said request of the plaintiffs and that in so doing and in the subsequent election of officers and directors they were save joseph 8 wells secretary and treasurer parties to the conspiracy and plan for the conduct of the said corporation contrary to its charter powers and to the wrong and damage of the interests of the plaintiffs as aforesaid since that time the sets acts of the board of directors and officers have been without the knowledge or consent of the plaintiffs for the benefit of themselves and against the interests of the plaintiffs they further allege that A W mccune B R C chambers krapels francis armstrong spencer clawson and walter P read have conspired together gether to manage the affairs of the company to the injury of the plaintiff plain tifis a and in order to build equip and maintain the lilies libes outside the city limits they have permitted the liabilities of the company exclusive of bonds to increase to the present amount of that heretofore with the knowledge and consent of all the stockholders including the plaintiffs it was voted to issue its bonds in the amount of the same to be secured by a first mortgage upon all the property right and franchises of the company said bonds to be held by the company and sold to raise money for the legitimate corporate corporaL 6 uses thereof that said bonds being duly executed the directors in order to provide for the largely increasing expenses paused caused by the extensions borrowed depositing as collateral of bonds that the said indebtedness matured on august 29 1891 anti and that being unable to raise the money arranged with the bank that they might have of the of bonds released on payment of of said indebtedness and thereupon the directors obtained from another bank maturing january and deposited as collateral of bonds leaving the other with the first bank as collateral security for the payment of remaining unpaid of the indebtedness which is due upon demand that said company under its present management is nt not able to make payment of the and the bonds of the company are in jeopardy and if placed upon the market to be sold as collateral would necessarily be sold at a sacrifice and toe the property lost to its shareholders that the parties through whom these two several loans of had bee been n obtained and to whom they are due are friendly to the interests of the defendant directors and if said bonds were offered at forced sale as collateral their purchase the foreclosure of the same and ana the reorganization of the company under such foreclosure could be so con ducted and it is the intention of the said directors that it shall be 96 so con ducted as to secure to them the whole of the property of the company thus thug ignoring entirely the interests of the plaintiffs plaintiffs further allege as evidence of the plan and purpose of the board of directors to wreck the railway system and wrong the plaintiffs that it has been grossly mismanaged that while there have been many improvements made and put in recently to the better operation of an electric system and while the knowledge of methods of the economic conduct of such systems has greatly increased the directors have persistently and continuously refused to adopt improved methods in their operation of the railway system that abey have maintained said system which now has thirty miles of lines one electrical circuit and as a result thereof a breaking in the line carrying the current at any point would cause the shutting down clown of the entire system and the stoppage of every car the manner in which the cars apparatus pa ratus etc are said to be neglected is dwelt upon at length and the statement is made that because of the attention chich has been given to the extensions with the motives aforesaid the proper attention has not been given to the use of the company lis s property for its care and preservation and for the most moat profitable operation of the road the manner in which the road to is operated and the alleged eni employment of a large number of unnecessary men on account of the repairs needed on account of the tax system comes in for a fair share of attention the complaint stating that by reason thereof the expenses per sea of the road are increased to an unusual and unreasonable amount that the books of the company show that while the gross earnings are increasing the expenses are indrea increasing in a much larger proportion that the books show that during arg may 1890 the earnings of the road were and the operating expenses making the net earnings while during may 1891 the earnings were the operating expenses and the net earnings bonfy only that during the four months from april 1 1890 to july 1890 1690 the total earnings were and during the same period in 1891 an increase of while the operating expenses in 1890 for the four months were and in 1891 making the net earnings for the four months in 1890 as against for the same period in 1891 a decrease of notwithstanding there was an increase in tho gross grosa earnings in 1891 over ever the earnings of 1890 of 2179 the plaintiffs plaintiff further allege that they have notified the defendants in writing asking and demanding that AL a meeting of the board of directors be hold held and that proper action be taken to at once protect and care for the interests of the defendant company com rally and seek redress for damages sustained ty by the company from the individuals named in the complaint for their wrongful acts but that they have failed to call and hold a meeting and have failed to demand of said individual defendants and to make re aa a hoard icard reparation for the wrongful acts complained of wherefore plaintiffs pray that an order may be entered appointing a receiver for all the rights and properties and business of the company directing said receiver to take possession of all such property of the defendant company and to operate and care for the same under the order and direction of the court and for the protection and benefit of the plaintiffs herein and all other stockholders that a restraining order be issued directed to each of the defendants restraining them as officers and erectors from further incurring obligations against the company in the making of extensions and in carrying on and operating of extensions of the roa road d not authorized by the charter thereof and from further using the bonds of the cona company pany and from giving obligations of the company with large and unusual rates of interest 12 per cent and from further carrying on in any way any wrongful acts with the intent ind and purpose of destroying the credit and assets of the company and that an accounting may be had that it may be determined what moneys of the corporation have been expend edin extensions outside of the city and what sums have been lost by the maintaining and operation of such lines that defendant directors and each of them be adjudged to return to the company such sums of money re as have been by them in this manner wrongfully expended and that in default thereof plaintiffs may have judgment against again such parties and each of them for t the amount in which they are dami damaged ged and which shall be determined by the accounting further that the court will make such orders to the receiver as shall enable him to save the company from the loss of its bonds bond held as security for of the debts of the company by the issuance of receivers receiver Is certificates and the raising of money thereby to save the forfeiture of the collateral or by such other means at as may dy seem best beat and that the plaintiffs may have tuch ruch other and further re lief as aa the court may direct and as in equity la Is just powers and ogden hiles hilea are the plaintiffs plaintiff attorneys |