Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1860-09-25

lility?
But it is supposed that the fact that the slate
is a stakeholder makes 4 difference anu null
fes the general power Of the corporation over
its property. This, Us the authorities citcl
show, is n mistake Of the law, ana wen IL
is, for there would be an end OF all JOINT
stock companies with the State, II 1t were
not Il mistake, rs it would give inc otate,
in the most effective form, the control Oh
the company without regard to her interest
nc n stakeholder in it. In some companies the
State owns two-flfths OF the stock, IN some
three. i(ths, and in the james River and Kama
wha Company it WINS en-twelfths, BUTT might
own only onc.tenth. Now, will any man grarcly
affirm. that besides her right to vote as 4 stock
holder, by her proxies, she has also 4 veto upon
the action of the stockholders if she dislikcs
it9 Thus, if 4 railroad or other company, in
which she is a stakeholder, wishes to borrow
money TO complete its road or pay its debts,
and for that purpose to execute a mortgage or
deed of trust, can she first vote against 1t IN
general meeting of the stockholders, and whcn
She is out-voted, by her absolute will, nulllly
the act? Is there man in the Commonwealth
so insane rs to enter into such an unequal anu
oppressive co-partnership as that with the State?
| presume not. But even this does not eXloolt
fully the monstroSity of the view which | am
answering, for, by that view the State may, oy
her proxies. 90 into q general meeting OF the
stockholders and vote for 4 sale, or mortgage,
of the whole of the property Of tho company,
and tbon say that the act was void; not because
there was a law %lorbidding it, but because
there was not one expressly authorizing II. Is
there a ioint stock company in the State, that
will tolerate such n view Of the powers OF the
State If there is, is not all its property at
the mercy of the State at once: For IN
the first place tile power to mortgage may DC
necessary to prevent ruin, and the State might
choose to promote that ruin, in order to pur-
chase at a ~ruinous price. In the next place, il
by some inherent power in her, as the State,
for it can be by no power which she possesses
rs a Stakeholder, that power being limited by
the amount of her stock, the State can thus
forbid the sale of the common property, OF
which she owns the smaller share; she may
command Il sale, by act Of Assembly, and sell
ont every Railroad in the State when she
~pleases, for it requires no more power to order
a sale than to forbid one: If it was intended to
confer any such Iower upon the State, why Is
her vote scaled always according to her stock
or below it-below, | believe, invariably, eX-
cept in the james River and Kanawha Company,
without limitation as to subjects? Why do not
the charters say "but none OF the property OF
the Company shall be sold except in pursuance
of an act Of Assembly," ] cannot believe that
the Legislature ever intended to practice such
a fraud upon the Companies, as to provide what
the scale of her vote in general meeting should
be. with a secret reservation, that she should, IN
addition to that, have an unqualified veto upon
the most important acts of the company. Has
.,ak H., ~ cold So,np nj IFS rpHl estate
before it became mortgaged to the State, with
out an act of Assembly? If it has were the
sales void, and is the property now liable to lie
reclaimed from the purchasers? | know not
how the fact is, as the company was mortgagcd
beyond its means before | became a director,
but | know it did sell property 4 long time
ago.
confess that | have looked most earnest
" and anxiously for II reason to support the
strange opinion | am combating, because |
wish to know the truth and be corrected as to
the law if | am wong; and can find none OK.
cept in the supposition that those who enter
tain the opinion have confounded 4 sale OF the
property Of the Company with a sale Of the
stock Of the State.
The difference between the two cases is ob.
vious. The property Of the Company Is the
common property to he managed BY the ma
jority of the owners in general meeting, while
the stock of the State is her separate property,
over which Il general meeting has no control or
authority. The stock represents the intc-
rest of the State in the common property,
and when that property is sold, that interest or
its proper ratio, must be paid TO her, out OF the
proceeds Of sale, and her agents have no right
10 give away or sell that separate interest, with
ont special authority, while by the very act OF
incorporation, community of interest, and rep
rescnlation IN voting, they have authority TO
assent to 4 sale Of the coininon property; or II
they dissent, n majority Of the owners may sell
in despite Of them. Just rs it is with al lndl-
yidual stakeholder, so it is with the State.
The proxy Of an individual can vote Tor or
against Il sale Of the common property, but the
moment that question is determined by sale, his
power is at an end. lie has no right without spe-
cial authority to sell the separate interest OF his
principal. That is, he cannot sell his stock in
the Company before a sale Of the property, or
his interest in the proceeds after n sale OF the
property which is his private stock.
In this case, however, the question was real
" an imlnaterial one to the STAGE, because by
the last act Of Assembly upon the subject, tho
vote Of the State was so increased as TO give
her the absolute control of the Company in gem
cral meeting. No sale could be made, therefore,
without the assent of the State through the
Board OF Public Works, and its proxies.
Having disposed Of the first question, ! take
up the second, viz: ..
"What are the peculiar powers and dlsaoill-
ties of this cooperation, if any !?
10 this question, my answer is
None that | am aware OF, except that by
the amended charter, passed in March last, the
company is forbidden To contract any debt, en-
cept the debt Of So, SOC, 600 authorized by that
act. | shall not stop to inquire whether this
condition is valid or not, but assuming that 1t
is valid, meet the enquiry, does it deprive the
company Of its otherwise Inherent power to
sell and convey its property?
Can any one believe that it does?
| suppose not, for the declaration that you
shall not borrow money, which you may alter
wards waste and pledge my property for the
paytncnt of it." is so unlike and entirely dill
ferent from 4 declaration that, "you shall not
sell my property and pay Inc the proceeds o.
it." that | cannot conceive how they can be
COMPOUNDED. BY borrowing money the pro-
perry might be consumed, and lost to the
State, while, by selling it, it would bc saved;
and We know that the purpose Of tho Leglsla-
ture was to control the expenditures which
would charge the work"
But if the Legislature had said in so many
words that the company should not sell its pro-
perty, the limitation or condition would have
been void. So far, however, from there being
anything in the amended charter which de-
privcd the company Of the power of sale, the
fullest power is conferred upon the State prox-
les. 1t is provided that the Board Of Public
Works shall appoint three proxies ITO repre-.
sent the State ut the meetings Of the stock
holders, and the proxies so appointed shall have
power to cast thrcc-fifthS of all the votes cast
in the appointment of the President, and other
officers elected 10y the company, except direc.
tors of the said company. and in fixing the
salaries, and in aN other qatstions arising i"
Il meeting Of stockholders"
Now, the question Of sale loes arise before
| ,l.n sincl hollnrs IN nnnnr-nl Innctinn and cnu-