The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-08-04
TIVE SCHUYLER FRAUDS.

p.ss..a-e .s,sy. q. J.; Campbsa, Bssverth, HOFFMAN
and SIosson, J. J..
Ysrrs. Lord and Van winkle for plaintiffs.
y,,se-s. W. C. Noyss and Geo. Wood for defendant
povruAs. Justise-Ths President, Directors
.,S Company Of Me Asehanses Bank, IN he city Of
,s.,c YORK. against the Ns,c York and Ns,o AaUsn
a.,lyoad CorpGay.--lt ia unnecessary for me- 80
...,a ,ne lacts Of this ease for tie purpose OF az
,J..n,.s he views hsve taken. They Arc saih.
sersIv detailed In the opinions or Jcstces Boswo
ana sosson. deem Il only material 10 transcyibe
,as certificate delivered by Kyle 70 the plaintiffs q.
sas time of the loan, which Sas a. follows
Ney York and New Hayso Railroad Company No.
ASIA CAPITAL 81 go; New York Ohce, shares 500
ssaA.
ss 10 eighty 1851 Ahares OF the capital sto,k OF
~ New Yorh and New Haven Railroad Company, trans
sa. New ss sn Yos BY ss said Kyle his
sssspey, On the bartender Of n sais %rp
npw YORK. April 20, 1854. Transfer Agent.
me ussal poyer Of attorney to transfer stock,
rAAds in fsy,r Of T. ". Edmonds, Cashier OF the
nlsintifs accompanied this certificate. The plain
ssffs applied bafore tho comnsnc amsnt of this ~:
Hon, 70 have the stock transferred which was re-
eused, upon the ground stated II the answer. Tais
syplic asion, as appears rom comparison Of state
msnts in the answer, folio AZ 70 49,) must have
SSsr made after the ssh OF July, 1864. judgments
pas Deen rendered for the sum ascertaiDsd
70 have beer the market value of the stock,
being at ninety'oar md 9 fraction per cant.
N ahis COMPANY car % held at all Responsible Tor
ycss Tins fYauanlsrtlT ,asuel II must bs n OF
the fallosihg modss:-Flrss- By considering tbss
skexe was Is contract, nicer which it WAS boaad 30
drnt the holders OF tho celaicste to be members Of
ITO irscrporsCiOn allow sriis Ter on soe books; CON-
rode 10 .hem share IN oil corporate privileges, ard
sard 70 them represented value in the property
ss ans comp any squ,vsent either to tae advance o..
ehe plaintiffs upon il, Of % rs par vans, the ad
Vssce sxoeess such value. SscoAd-H this was
Ne contract and this che obligation q the company
under is, aid thoY have refused ID fulDt it, toen
xhss Tbs plaintiffs must bs relieved either by decree
ing performance OF the contract, or BY awarding
ssasges for th;s refusal has for shis refusal alcae
Or, thirdly holding that Sl.aough the company
Nss absolutely and leg Ally incompetent u ccea,e
ssah tn oJlig asScn, yet IL Is bound TO make god
are representation contained IN the Certificate thai
Ne sseek EXPRESSED N Was part ol tae trus capi-
tsS; ard ghsn ths nsrket value OF such genaine
sscOk afcrds the just general rule Of damages III
Es case.
the frGSnleat isgue il one million dve hundred
Thousand doTara. II this Bum, or any SUI neac
should pass into Judgments, with executions over
re property, and hrsce % cosnpstlsion ong the
creditors 10 realize their demands, utsa- aud ire
hsevshle less TO al the Stockholders must eesue.
shese claimants are admitted upon .hs basis OF
eSnnDsNSsy OF interest, something may be saved
nom TIE rains. Such c)nsi deI;ssons, il 10 sdm.ss
Dis, and trast not admitted, 10 influence judo
decision, Eaust prevail teach o moro than us RAJ
sSltioD IN stating the principles which I've led
Judge 10 hia result.
]. There d no possible ground, in my opinion,
npcL Which liability Of any kiEd can ha fixed upon
the company which mrst not depend upon or ariss
COT Of the certificate Issued TO Ky and deposited
vhh the pl&intifs. That certificate may b. treated
~ contract Of the conpspy i;selt, authenticated
by Ne ohesr; or, as the representation OF agent,
Sufficiently authorized in the PARTICULAR alter, that
Zoe facts stated in Is gre true, and an implied pro.
MSxe THAT the engagement contained in IL shall be
fu 6fed; or guaranty by the Company that
Schuyley's representations ars corsecs, aid al
Interpret the certificate in any ma iner which es a
criticism can devise, ard il will be- found taa'
me ESSENTIAL elements Of contract pertain t, il.
4 Wba: is that contract? Il cSntasns four ma
1ssil particulars: Isl, This. Kyle WAS entitled t
eighty.fve shares Of the capital stock Of til,
company; I'd, That such capital STOCK YVES tlro
niallStn OF dollars; ID, That the shares were ca
hundred dollars each; and Ash Yhas uIon produc. io
~ the certificate the company vOud allow tra- &c
and regrisaton Of the shares to Kyle or ts alsigas
Asrme then for the present, thai The origin
stockholders had protansedy entered into this IN
kaet the questions are could tasy legally nlAks It
md can they legally sstisy it, snd in wcat manner
1Aese questions ase TO be considered as between ta'
sonpaDy and tho holders of the certificates than,
sslves, irrespective Of tbs charter and the 8 aye
and next affected by the provisions CT the forne
and TIE policy of the latter.
FEst, the admission Of the plaintiffs as ss,ck
holders Of toe company, representing elgbty-tiYe
additional shares, so TAR SIS 10 confer right o.
voting and 10 participate in all corporate pr
sasgsa seems clearly to be matter n Of msrs
prohibited. u ls simply the increase OF tbs mem
kersofa partnership for the purposes Of ,nageclsut
Second, the increase Of The capital stock OF coz
pssatloD il such capital is not fixed By the csartsr
and NO other statutory prohibition "a ia force would
mot he Illegal. The joint stock companies q Eag.
land, organized under various acA Of Pacianlen.
sapisal Indefinitely. Wordsworth law of joint
sesek comp. p. 37) Third, the third partioG 3,
- representation il tie certificate, viz tho she
sAaxes ere one hUndced dollars each, is OF more
importance. II is undenisse that il this the stock
holders do no more than state th8s the no1l'nl
salUe Of each share when fall il 800. Tasy d
nst represent that this y khe actual value. rhs
sesslsd rule Of damages in ordinary c,sos, bud
adopted in the present .ance, proves this. Tn,
market value Of the stock at the time Of demand
fsy a trsrsfer, or at sry time prior 70 tbs com
recovery. Commercial Bank Of Buffalo vs.. kors
yigAA22, Wendell 34s,) Had the market valae bsea
twsAty per cent instead Of ninety four In the pre-
ssnt Instance, that would have been sll the PLAZA
sifs could have obtained upon their owo theory
Bot the agreement o. behalf OF the holder of the
agu.'ous stock may then DC presen.sd ia this, it,
Aes, he statement o. Is, ansve: as % tbs smonnt
Of The spurious issue, viz: 81 100000. The c,rl-
R0y has represented in this certiG :ats that the
ss2Asl Is three millions, and Ia. shazes 800
hence Is 10 Represented that she eighty igs
shsres in question are component part d
thirty thousand shares, no. Of forty-fve thousand
n, then, fifteen thousand OF uui,ubte6 shares wars
dipiseed, and these substituted, abs,uss justice
wsnld be done, and tue contract, in Its utnjst la
tude Of construction, oe entirely tuiled. L sg.ie
the holders Of the thirty thousand shares aba.e tbc
nominal vaine OF what they hold cne-half and toe
spurious Shareholders are admitted ct tbs fol valus
bow could il be possible to ssY that every portion
.; The engagement OF the compsny was not pe-
funed7 Assume the agreement 30 DO, tast the
hoIder shAIl have his share Of stock 6. 800 %
Mat his dividend upon sind interest In the property
shall be upon that amount. these holders thea
sepNseut in the company $1,000 shares, OF
al,6oooOo; and By treating The osnor shares as re.
dsoed 70 nf.y dollars, the ssne sum "a produced
npoa thirty thou sAod shares. And thus there would
ne G.ecn thousand shares at 300 each, AMI
1Ansy thousand At ffty dollars esch, keeping tns
sayfsA n three millions Suppose In this case, IN
eu6apaDy had permitted n trsrgser Of these sAares