New-York tribune., 1867-06-14

IL
TINS but ON preliminary injunction to protect stock
ton until large amount Of money repaid to persons
who nave improperly obtained the control of corpora
Oh OH S9en % ndyid1as am Of the opinion that any relief
Oh ha ground mnst he left 20 the trial OF the cause,
"meh men INC rights OF all parties be Aaaly adjusted
me pantn is not party to the agreement he has not
received anything under IT, and there is mo- reason for
upon this ground
Ny conclusion is that the order should be reversed and
ule injunction continued until the trial
LEONARD p 1.-The facts appearing in his ease I'm
my opinion, warrant The inerpostion hy Injunction to
the ul extent demanded the ground that the newly
appointed directors hold pursuant 10 an agreement
fraudulent in law, and that Their contemplated acts are
betrayal Of the trust in behalf of the NJ NJ Railroad
OF which the defendants are directors, recognizing
ShcF tIns due TO the creditors under the agreement Of
ecehDer 1900 Tor whose security they accepted Office IN
TIC NJ. and VI. Railroad
The new directors not chosen by the Stockholders
hut came in upon the resignation others who had been
elected apparcntly TO preclude any action by the Board
to the prejudice Of the lenders under agreement Of
December, 1860 The power thus acquired appears about
10 be used by the new directors for the destruction OF the
A. ana VI Railroad. These new directors assumed
double trus-one of private nature) may be used ad
Veecy to the rights secured by the other trust which is
of public character The defendants il appears,
waI wGte do 95ecois Tor the pnGse of serving the pr
ihey nave employed new Superintendent who also
holds hike position in rival road. His obligations 10
ms hist employers OF more permanent chlract
than lie new, and appear to De paramount.
Inc appearance OF mutual advantages, resulting from
ms employmentby both rGirOddS is wanting. The credit
ors under the said agreement. appear TO he avaiDg
themselves " an unreasonable advantage, derived
direction The subyersOn OF the direction is not icgiii
mate mode OF taking security for debit The acts of
the directors placed under such circumstances should be
so clear TO be above doubtful construction Where his
obligation. as trustee for private creditor IN
for which he has been chosen IN the customary man
ner he must see TO it that all his acts viii hear rigorous
scrutiny The Courts Wisconsin are pnwcress
cve The defendants do not reside there they refuse
take action IN the name Of the NJ and NJ L. To cnioin
vent the injury anticipated II canOt be expected
that they would for they initiated the action complained
of Courts eoin the misconduct Of trustees under pr
Nate trusts. perceive good why the same
rules are not applicable TO Trustees OF Corporations,
whore they are about 10 abuse their power The relief
sought does not necessarily involve the exercise Of vista
Ona powers This Court have not the power 10 remove
or appoint the trustees or directors of foreign corpora
ton But this Court can cnOin their action when
illegally appointed, or when acting fraudulently
or unlavfuly, II they are personally within their
Jurisdiction Some criticisms have been made upon tho
terms in which another judge has expressed his views;
hut the application and construction intended pam
enough the case was carefully considered after the
former hearing and the conclusions OF the Court Wee
Wen declared oy the OPINION athough the learned JhuLo
who prepared was without the advantage of hearing
the vigorous and able arguments of counsel Nothing
MAS overlooked or mistaken after the former argument
The rehearing has been granted because an honombe
member of the bar and of the learned counsel In the
cause declared that ne misunderstood The announcement
of the presiding Justice at the time The argument was
would be taken that day, in consequence Of only TWO
members of the Court being present bat II counsel were
third copy OF the case could be handed mp and the cause
would have the advantage OF the consideration o. the
absent Judge, we'll as Of those who weTeprcsent.
Under this announcement no one was required Ia sub
nit bring his The object to facilitate the
business Of the Court, ard the time W counsel
well ~ that Of The Court if tile members OF the Bar shond
think proper 10 avail Themselves Of tle opportunity
Owing 10 the misunderstanding mentioned the course
pursued has not realized the advantages contemplated
and desired.
The counsel FOR the defendants understood that ne
0 hc submitted Ia the absent Judge IN the event,
only, that tlo two Who were present ,loud disagree.
III would have been less advantageous appfehchd,
than the terms proposed
The ease is OF great Importance in amount, and The
Court have been disposed 20 grant the greatest latitude
Ii was said that the principles discussed the former
decision did not the whole ground demanded by an
order sustaining the original Injunction.
IL was not Thought 10 be necessary Ia discuss the q'S
On whether the contract Of December 1861 made in
violation of statute Of Wisconsin, II thought 70 hc
sufficient to hold that the Directors Of the NJ and NJ al-
road contemplated Hs from the evidence II appears
probable destruction Of the corporate existence Of that
railroad aud that tins sufficient ground 20 continue
the injunction The opinion relates only II Is SAID io thc
grounds for restraining the continued action of the direc
tors ~ members OF the Board while the original iiln.-
ton restrained also disposition Of the securities hcd
We stil Withhold any expression of opinion n. TO The
application OF the statute to this case ~ We hod tha ne
contract appears 20 provide for the slbvcrsOn o the
Board OF Directors against public policy ana ialr uea'
ing. lhe apparent intention 20 appF tho poNeII
obtained 10 the corporate destruction o the railroad
represented by the Directors. or TO It's to
lval railroad indebted To the Milwaukee aud Minnesota
Railroad by Judgment almost equal 10 the loan o scott
appearing 10 be probably interested IN The rival railroad
We are confirmed holding the Injunction, not only
against the defendants from acting ~ the trust which
Is indicated that they intend TO abuse but al~o from as
sad contract Dec 1885, until the final hearing, when
rights Of such OF the defendants ~ are creditors can
be more definitely ascertained and settled
II has been sad thai the lenders wi lose Their money
IL the Injunction sustained We have designed 90 take
their RIGHTS as fuiy INTO consideration a. the ease permits
tuuae result they must attribute Il 10 the clauses III inc
providing Tor the control OF The company anu
for the resignation 81 five Directors and the substitution
of themselves aud three others 10 be nhne by mem u
for their continuance in office ill the payment Of tbeir
debt and to such apparent Application of s power
subsequently, leads 10 the conclusion tIat mere was
probably fraudulent intention from the besinning
As we said before we think the order appealed from
should he reverSed, and the lnllcoll ,0nuon @ 1n.
the trial with $40 costs OF the NOTION ana slo c"sl7 :" ihe