The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-09-21
The Harlem Railroad Frauds.
COMMON PLEAS.
Before Hon. Judge Ingraham.

Before Hon. Judge lngraham.
MORE OF THE KYLE FRAUDs-LIABILITY OF THE
HARLEM RAILROAD COMPANY FOR $27 ,l53 WORTH
OF THE SPURIOUS STOCK.
SEIT 20-Jdmes N. Drake and another u.s. The Neo
York and Harlem Railroad Company.-Ths was a suit for
the sum Of $25 600, with interest on loan alleged to
have been made by the plaintiffs in good faith to Aexan
der Kyle, the defendants agent Messrs. Martin and A.
T. Smith appeared behalf Of the plaintiffs who
are stock brokers in the city of New York. The
defendants, by their act Of incorporation we're
empowered to issue stock to raise money for
the construction and equipment of their road
Pursuant to the act of May 7th 1s4O authorizing the
company to increase their stock one million five hun
bred thousand dollars, thirty thousand shares at $50
per share duly subscribed for and payment made
thereon and the stock issued to the subscribers The
company made due provision for the transfer such
stock and they appointed Alexander Kyle the Secretary
of the company their transfer clerk, whose signature
with that Of the President Of the defendens should the
sole authorization required to the certificate for said
stock.
On the .Sih of June 1854 Alexander KYLE applied to
the plaintiffs for the loan Of S25 900 upon 500 shares Of
the preferred stock of the defendants and produced
the plaintiffs certificates numbered / e24 1906 ,SO7 and
sO9 which were regularly signed by the President and
Secretary of the company and in all respects rega
lar upon their face. and certified that Kyle entitled
t. 5eO shares OF preferred shares of the defendants stock
The plaintiffs subsequently applied to the defendants,
but they refused to deliver to them the certificates of
ran.er.
The defence set up by Mr.. c. W. Sanford was that
frauds had been perpetrated the company by Kyle,
and that the plaintiffs themselves guilty of negh
gence and careessness in lending large without
making inquiry as to Kye's ownership Of the stock
his authority to borrow money them. witness for
the defence deposed that Kyle only the Secretary Of
the company, AT salary of 81 200 year, up to May
54 which was then raised to 81 Co., The financial af-
fairs OF the Company conducted by the Treasurer
+. d. Stanton, stock broker in Wall street called
by Mr. Smith for plaintiff, and testified that Kyle had
been in the habit Of dealing extensively in stocks Of the
defendants company and that his (Kyles) transactions
with witness amounted 10 $500 600 for the six months pre-
vious to the discovery of the frauds.
clerk of the Union Bank deposed that Kyle kept an
account there. and at time had deposited s5s0 600
Judge Ing aham in charging the jury reviewed the law
to the liability of companies for the acts of their agents
Ii The plaintiffs guilty Of negligence they were not
entitled to recover but IL they not and the de-
PENDANTS guilty Of negligence in the transaction of
their business then they liable for the acts Of their
agents.
The jury Immediately rendered verdict for plaintiff
for S27 1853 A. the full amount claimed with interest
The Court made an allowance to the plaintiff counsel
Of one per cent in addition
Defendants got twenty days to make for review
III the Court of Appeals.