The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1854-11-26

Superior Court-Special Term.


Before Hon. Judge Hoffman.
DECISION or JUDGB HOFFMAN, THAT THE COMPANY
ARE LIABLE FOR THE FRAUDULENT STOCK ISSUED.
Norris Keschum, Thomas Rogers and Bdsoard Benssni
&C. John A. Scres President of he Bank Of Commerce,of
Nes York-This action brought to from the
defendants the Of $40 with interest paid by the
plaintiffs upon transfer Of $40 shares OF stock Of the
New York and New Haven Railroad Company. This stock
had been pledged 20 the Bank Of Commerce by the firm
of R. & G. l. Schuyler. Various grounds for the de-
mand set up in the complaint but the main ques-
ton depends upon the alleged iegaly and valucless
character Of the stock having fraudulenty and
falsely issued We merely give general outline OF the
case the facts and material details are infinitely stat
ed in the opinion Of the Judge which very elaborate
and win be ready for publication in few days.
HoFTxAN, Justice.-Abstract Of 0pinion.-The course
adopted in adducing the evidence, and the arguments Of
this cause have led to the consideration Of the
validity Of the stock Of the New York and New Haven
Railroad Company issued by the late transfer agent
an amount exceeding million hundred thou
sand dollars. am satisfied that it cannot be de-
cded without passing upon that question 1 approach
it with anxiety and disrust. The interests involved
Of startling magnitude, and the questions grave and
novel An obscure and untrodden field Is before me
and there lights hndled by the wisdom
and abors of former Judges TO mark out the path Such
considerations urge TO protracted and deliberate
examination but shall fulfil higher duty to the
munty, by a prompt decision, which will speed the
upon its way for the matured determination
the general term of this court shall consider the
under the following heads =
First-The position and rights Of the parties growing
out Of the presentment and refusal of the check Of
$4,000 and the ground assumed by the Bank of Com
merce for such refusal.
seconl-The facts attending the possession and trans
fer Of the securities held by the bank to the plaintiffs
and the nature and evidence of the apparent title to the
$40 shares of stock made over to them.
Thrdhe ground Of the proposition of the defendants
that in point OF fact the transfer made to the plaintiffs
did and represent undoubted stock
Fourth-whether the action to back the price
be maintained upon the assumption that the stock
acquired utterly void, and vested the plaintiffs
with no right interest whatever.
Fifth-f such action can be maintained, then what
are the rights and position of the holders of such
spurious or fabricated stock in relation the company
Sixth, and lastly-Whether the plaintiffs charge
able with any such notice Of the character Of the stock
as will vary any rights which innocent holders Of pu
rous stock may possess.
Upon the first point of examination the decision is in
substance follows:-That no right attached to the
the plaintiffs by reason Of the check of h. and g. L.
Schuyler for upon the deposit made after the pre-
sentiment and refusal Of payment Of such check. That
the right of the bank retain the funds deposit
crued the 30th Of june 1854 and could not be af
fctd by demand Of the check the morning of the
LIST July That this right not affected or impaired
BY of the stock notes given upon the loan by the
bank being demand, and that express demand
proven by the fact Of the bank being in possession
Of the stock as collateral as well having the money
hand.
Under the second head the facts attending the posses
sion and transfer of the securities to the plaintiffs and
the nature and extent OF their apparent title to the three
hundred and seventy shares of stock the subject Of the
action stated at length and Of great Importance
in determining the rights Of the parties in this particular
respect but not necessarily upon the general and
and great questions in the conclusion is how
ever stated that event could the plaintiffs
without allowing the bank to deduct the $40 00l-the
amount of the check paid upon the arrangement. The
principle OF rescision upon which the plaintiffs proceed
involves the principle of restitution.
After reviewing the case deliberately the Judge says
" The result, Them is that the plantisare entitled
der the certificate and power taken by them from
Mr.. Stevens, the president Of the company, to b.
admitted shareholders in The capital Of the company
in common with all other shareholders whose rights
admitted, shall be established and that their
right Is in proportion 20 such whole number Of holders
allotted upon capital O. three million of dollars.
1T will be that this view Of the rights Of the par
ties excludes any right for damages to sustain
any action, except upon the grouni of
ship, unless, indeed, the company refuse admission
Whether in such suit for damages q manda
mus is proper, l do not consider"
The complaint dismissed, with costs.