The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-12-03

MI. Hammond, Deputy Attorney General, ano MAJ.
Redneld for the people.
Mr. Shearman and others for defendant.
Juoge Baicom-Tns action ls brought Dy tne
Attorney General IN the name Of the people 81 me
court The place OF trial il Br0ome county.
Inc action V authorized by section 43o o. the coas,
which provides among other things thai AN acu0n
may he brought by the Attorney General, ~ the
name or The people Of the State on leave granted by
pose OF vacating the charter or annulling the exist
ence OF corporation other than municipal, wnen-
acts, among which are these-First, offend against
any OF the provisions OF tne acI OF acts
crea.na altering S,oats the Urov,sons Of
any law By which such corporation shall have for
eited its charter by abuse OF its powers; or third
not conferred upon 1t by law. This section makes It
the duty OF the Attorney General, whenever he shah
have to believe that any OF the acts or omis
sions specified therein can be established
BY proof, to apply for leave and upon
anae4 gran'e1s have mentioned e o acnHn IN ae
OF vacatng or annulling the existence Of corpora
tion In every case OF public interest SUFFICIENT facts
Of the action. and they have not yet been contro-
vered by atndavits or an answer. The complaint
the defendant and its directors BY Stock
holders OF the defendant, in which actions
two different receivers have been appointed
dstrct and one Of such receivers has also been ap-
pointed receiver in . similar action brought by
stockholder in the Circuit Court OF the United states
sitting in the city OF New York The General Term
OF this court In the First district, held in Howe w.
Deuel. and others as Barbour, 5o4 That the vlstoria
powers conferred upon the Court Of Chancery by
The Revised Statutes, relative to proceedings
against corporations In equity, can only be exer
at the instance OF the Attorney General or
OF creditor or the corporation, or OF q
OF oser oes asSs aa on
be brought under the statute by a stakeholder
against the corporation ana is trustees to restrain
the trustees from exercising any powers AZ trustees
and for the appointment OF receiver Of the property
and effects Of the corporation That case holds that
trustees may be restrained in such an action from
doing illegal acts but that the Supreme Court cam
not entertain such an action brought by O
ss n%sl it ana appoint receiver therein
clear that no creditor OF . corporation can
have receiver appointed until he has o Judgment
decision in Howe w. Deuel. and Others Supra con-
trolling authority that receiver OF the defendant
action brought by q stocshoider or stockholders Of
the company, and cannot avoid the conclusion that
the orders appointing receivers In such actions
viii be reversed by the General ' Term Of
this court, to which understand appeals have been
TO enjon the defendant It's directors, 0f1icers
trustees and agents from delivering to any such re-
ceyer possession OF the Erie Railway or Of any Of
the property and effects OF the Erie Railway Com
pany; but they Will be required to deliver possession
TO any receiver who shall be appointed In this
action. The interests involved In this action
are OF the greatest magnitude, and the great
est care should be exercised In respect to
i u
receiver In this action at the present time. An
order for that purpose would imply that the de-
fendant's charter should be vacated and the exist
ence OF the defendant q corporation annulled. I
think the court should have more specific informa
ton than s contained In the complaint before
making an absolute order appointing receiver In
the action. | shall therefore, appoint referee
to thoroughly examine into the transactions,
afiairs and condition Of the defendant, the cha
racter ana condition Of all actions affecting the Erie
Railway Company aud the directors thereof, with
instructions to report to this court with all conyen.
ippt II N Ot
should be forbidden and enjoned In the meantime |
from exercising any doubtful powers or authority
Issuing any convertible bonds OF the |
Railway Company and from converting any
bonds Of the company into stock thereof. ought I
to add another reason which influences me to
refuse at present to appoint receiver in this action;
and that Is the enormous fees. costs and expenses
that would be incurred by receiver taking pos
session OF the Erie Railway and its property and
enects. OF course II anything new should at any
time be developed absolutely requiring the immedi-
ate appointment OF receiver herein the court
would not hesitate to appoint one. | trust the
Adoption Of the foregoing views in an order In
this action will protect the interests of the public
and OF all persons who have an interest in faithful
and economical management of the Erie Railway
Company, and bring to light the transactions OF tho
directors OF the company, so whatever Of blame or
dishonesty may exist win rest upon the individuals
conducted themselves as TO be worthy OF the trust
conhded TO them by the stockholders
INJUNCTION ORDER or JUDGE BALLOON.
At special term Of the Supreme Court OF the
State Of New York, held at the Court House In the
city Of Bi1shamton in the county OF Broome this
com. justice. The People Of the State OF New York
vs.. the Erie Railway Company. On reading and
verified, the order OF justice OF this court,
granting leave to the Attorney General TO bring
this action, an order upon the defendants to show
cause why an Injunction should not be granted and
receiver appointed and after hearing the Attorney
General for the motion and Mr. Sherman OF counsel
the defendants in opposition thereto, IL Is ordered
that the defendant its trustees, agents servants
the president, directors and other officers OF said
hereby enioined ana forbidden from transferring and
delivering possession OF the defendants railroad,
ami orr ped in trust for n 70 sny ., r
any person claiming TO be receiver other than such
receiver IA may be appointed IN this action; and the
directors OF the defendant, the Erie Railway Com
pany, are hereby enj0ined from refusing or neg
Letting safely to Keep said property aud effects for
he interests OF all concerned until receiver be ap
pointed In this action, until the determination or
And said directors are enjoned from neglectinr
emitting 10 run the Erie Railway and control
fairs OF the Erie Railway Company until q
iii the determination Of this action. But said
Directors are forbidden and enjoined In the mean
thority without the sanction OF this Court and from
issuing any new convertible bonds OF the company,
an0 from converting any bonds OF the company
Aud TO enable the Court to decide inteni.
gently whether the Erie Railway Company
ceiver, Giles w. Hotchkiss, ESQ.,, of the
city OF B'nghamton, N hereby appointed q
referee to thoroughly examine into the transactions
afsrs and condition OF said company. and the char
acter aud condition or a actions Affecting the Erie
Railway Company and the directors thereof, and to
report 70 this court with all convenient speed and
Me his report with the evidence taken by him. In the
Office Of the clerk OF this court In the City Of Bling
hamton.
And said referee Ia authorized and empowered TO
examine the books and papers OF the Erie Railway
Company, aud 70 examine on oath any person or
persons whom he may believe to possess knowledge
OF matters material TO the questions referred to him.
A true copy I'M JOHNSON, Clerk.
COURT cALEA1ss-THs nay.