48 rmnmiun napomma. ‘
CALDWELL, J. The Arkansas Central Railroad Company was formed
for the purpose of constructing a railroad from Helena to Little
Rock, with a branch to Pine Bluff. The chief ultimate promoters
of this enterprise were Stephen W. Dorsey and J. E. Gregg. Dorsey
was the president of the company, and its nnancial agent and man-
ager, and generally controlled and conducted all the affairs of the
corporation. ·
What is commonly called an exhaustive contract was entered into
between the company and J. E. Gregg & Co. for the construction of the
road, by the terms of which Gregg & Co. were to build the road for
all its stock subscriptions and other assets, and a majority of its
stock.
The directors of the railroad company and all its ohicers, except
the president, seem never to have had more than a mere nominal ex-
istence after the making of this contract. From that time Gregg &
Co. were regarded as owners of the road, and its assets in hand, as
wellas all that might thereafter be acquired.
Dorsey was a member of this firm also, and in the double capacity
i of president of the railroad company and a member of the Erm of
Gregg & Co. he seems to have managed the financial affairs of both.
The company executed a mortgage tosecure its Erst-mortgage bonds,
which were put upon the market and sold to the amount of $720,-
000. The defendant, the Union Trust Company of New York, was the
trustee in this mortgage. Dorsey went abroad to effect a sale of the
bonds, and succeeded in placing most of them in London and Am-
sterdam.
By the fall of 1872, 48 miles of the road, which was a narrow gauge,
hadbeen completed in an imperfect manner. The work of construc-
tion was never resumed after that date. About this time Dorsey en-
gaged actively in politics, and having been elected to the United
States senate in the early part of 1873, and the assets and resources
of the railroad company having been exhausted, he and the Erm of
J. E. Gregg & Co. soon ceased to take any further interest in the en-
· terprise; and the defendant Johnson, who had at the solicitation of
Dorsey invested some money in the concern of J. E. Gregg & Co.,
was elected president, and had the control and management of the
road and the affairs of the company from that time until the com-
mencement of proceedings to foreclose. The company had neither
resources nor credit, and the earnings of the road were barely suf-
ficient to keep it running, without making needed repairs and improve-