The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-12-13

Judge VINO granted this order Influenced by the
statements submitted to him &c parte showed some
nnpatence in the hearing OF tins la critcbsing
Judge sutherland he wished to go no further than
ne might in criticiHing one for whom he had tue
and could be nodded, ana he thought there had been
little excitement raised in the Jndica mid ny me
previous representations Tney aad pes s
prepared. Now they had papers which NJ thaL time
they had not. II had been sometimes SAID that pro-
ceelilng should not be transferred from one Judge 10
another: INT the many Judges OF this court but
one Judge and IL would be an insult 10 the court 10
say that one would not act as imparualy as another
His frat proposition was that the bin, IL taken
true the relief granted could not he gwen, and were
the case res osa ne wou were aae M ss
| aQement against any but these three inc other
fourteen were CHARGED with nothing except submit
| teen were more In the habit OF controlling than
| being controlled, and there was no allegation VI
reason was TO take the control Of the company
out OF the hands Of these directors Tor the fault OF
4 600 shares il might for the holder or one II for
the misconduct OF three directors, then for the
misconduct OF one. AZ least. chancellor before
inquire where he got 1t. He, counsel, had ex-
amined the elementary books, and in them he
right. chancellor should give relief conlnensu-
rate with the wrong. OenJOin the wrong doors, not
to take it from the whole direction, not to run rail-
road, not to manage bank, but to restrain aud
remove the fraud-doers and possibly direct the filing
OF their places. The powers OF equity are corrective
was not TO be stretched out for destruction. But
they had authority. Counsel quoted the case Of
Howell vs.. Duer. Here, he said, the fIamers OF the
bill had looked beyond a receiver and asked spe-
cinc relief through him; but the court held that 1t
could not appoint receiver on the application Of a
Bulns, in Herman, 243, to the same purpose
that the trustees OF corporation could not
be removed on the application OF st0ckl0lder.
No case he claimed, had ever gone SO far as 10 jus
tfy the removal Of trustees or TO take the manage
ment OF It's concerns out OF their hands ON such
complaint. He mad read these cases 10 show that
the court had no general power which reached the
case ana mat al It's powers o. removal aepenneq
the court could do. On priiaG Jdce case OF gross
misconduct court OF equity might suspend d.
rector. On conviction or prooi-that IL, after due
triai--lt might remove him and might direct his
place to be filled by new election. Thus Fisk,
Gould and Lane, II guilty, might be nrst suspended,
then removed and the AFFAIRS OF the company he
mnstered by the rest with newly elected directors.
The statute even provided for the creation Of new a.
rectors Ii all were removed. AT whose instance this
might be done was presented IN the statute-at the
Attorney Generals, at creditors or at that OF an
ence. BY naming these the statute excluded all
Others II this objection were out or the way the
regular course would nave been temporary suspen-
sion removal and direction TO Hi the places OF the
tot.eas0rs suppose the court were acting entirely
free OF al statutory &c T c wa Womb wo@d De dU
directors charged with wrong dong; II would
remove them; 1t would md fourteen or
leave them alone; it would decree against the
wrong doors reparation VI their wrong; IT
ceeds to be gathered together for its redemption.
That Is as far as the court would, in calm frame
Of mind, go. But this bill asks the courSto do what
may please the plaintiffs. Its first prayer ls that all
the directors may be removed. Mr.. StoughtOn read
the prayer Of the bll commenting on IT, The object
or the blll he said, was receiver. What was the
purposes 1t was IN Mr. Drew's eyes, ''that this
stock must not go up" Coupled win these vario's
ment Of receiver, generally considered to DC the
destruction Of corporation. II was hoped that the
stock would be depressed, the idea being spread
oh mr. NJ mar mn
man could tell whether hla was Of the spurious or
genuine. on this complaint no case was made for u
receiver. No order for receiver could have been
made, except on hasty and mcOnslderate action.
with all due respect to the court the order made on
II signed by one OF the opposing counsel. We're he
the counsel for the Erie hallway Company he should
advise them While treating the receiver wlth all
due personal courtesy TO disregard his appointment
He had treated this as question OF power and not
OF discretion. Now. in the bin OF these plaintiffs,
brew. Work, Scnell and Belmont IL Co., all the
equities but one have been denied. IL adfnitted
that before the last election convertible bonds mad
been issed but appeared that since that time not
share had been issued, except in conversion OF
those bonds. Now, suppose st0ckhoder should
come In and say this stock lahout sioooo,oC0 has
been unlawiuy Issued, and 1t depreciates my stock
and this then these parties MAKE allegations they
would ask some rehef But tins complaint makes
no demand Tor relief on this theory 70 such com
plant holders Of the spurious stock should be made
parties. But the only purpose Of these allegations
must be TO show the misconduct OF these three
directors. Now, although the subsequent election or
these gentlemen had cleared them Of any impna-
had thought II right TO show alfirinatlvely that the
Issue OF tins stock was made in good faith ana with
perfect honesty Of purpose the other side claimed
that when the common stock was full the company
had no power TO Issue more stock for any purpose.
II was a little difficult TO ind out tnat there
any limitation OF the capital OF this company.
II would be still more dihicuit 10 graft that
limitation on the act OF 1850. The com
pany claimed that the act Of 1850 authorized the issue
| Of convertible bonds, irrespective OF whether
the stock were fun or not Mr.. Stoughton read sec
ton twenty eight OF the act OF 1850 which was so
fnll Nv Al iacu sapd al
Stoughton claimed that this power was intended TO
| commence when the original stock was exhausted.
The power to mortgage was not limited by The
amount OF the stock. The convertible bonds were
means more advantageous TO the stockholders than
| bonds secured by mortgage. The statute was
| explicit that the directors might for bonds Issue
stock. IL was hard thing to say OF directors VINO
nad tnerev ssyeI tn
from great loss, that they were guilty OF ffaud
Something he would say AZ 70 the iiifiamlnatory
portions Of this bill. lie had something to say Of
Messrs. Drew and Work. Drew had been u director
Of the company, and appeared on his own statement
as one shameuily dereiict to MS trust. He APP
peared before the court having taken part with
Work in a settlement when director and treasurer
which took from the company nnawiully some mil
lions of money. lie was false 10 his trust He was
so regardless OF self-respeet as TO come here and
state 1t and make II q ground OF charge against
Fisk and Gould, who both protested against IL
Thus was explained how, though some directors
were not personally friendly TO Mcssrs Fisk and Could
not director made affidavit against them. Since
the new blood was brought In the energy and faith
fitness OF management mad been SUCH ~ TO COM
mend II to all their codirectors Now MIR. Drew APP
peared here as having urged settlement OF suits
brought by himself by which the company purchased
stock OF Vanderbilt purchased bonds OF another
company paid S549 900 and SIS 900 and sl0000O0 TO
Mr. Nanderbllt--a done while Edridge was pres-
dent and Drew aud Work directors TO give Eldrldge
a great gam through another company and to enable
Drew TO make great gains from previous contract.
For istec to bring suit against the company oil
which he was trustee TO plumber II, was an iniainy
which made the men guilty OF II unworthy or Gre
dence unless indeed, the custom now creeping in
OF fraudulent action IN the great public trusts was 80
prevalent as 10 be adopted the rule OF justice.
The bill begins by ayerr1ng the issue In 1856, OF
5s 600 shares OF stock 10 Drew. That was before
Gould, Fisk and Lane had anything TO do with 1t,
and could only have been put in TO dishonor Drew,
VINO yerifies the complaint Then II AYERS the issue
last February OF 100000 OF bonds. That Is not
denied; they were sold ana the money turned INTO
the treasury There IL allegation Of another issue
OF s50o0ooo. Now tins money arising from botn
these ISSUES was paid into the treasury aud set apart
for the purposes named In the law which justified
them hasty rcadlng OF the complaint might lead