Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1870-11-21
to the Maine Central, from which point we

''Before proceeding to pass upon this, the
principal question presented here, let us look
and see precisely what the defendants under
took to do and did in part do, prior to and at
the meeting of the corporation on the 3lst OF
May.
| On the 10Th of May the presidents and a
majority of the legally elected directors of both
roads signed two contracts, providing for the
proposed lease, and for the issue OF stock and
scrip to equalze the amounts between the par
ties upon the assumption that the intrinsic
value of the two roads, one of them 100 and
the other | 10 miles in length, was the same. 1t
is asserted by the compliments that this valu-
alton was radically incorrect, and the arrange
ment a ruinously unequal one for the Maine
Central. Looking at the testimony here pre-
scented, | find nothing to justify the assertion.
Giving, l believe, due heed to the means of
knowledge and to the value of the judgment
of those who have testified upon that point,my
conclusion is that the allegations in the bill OF
the superior value of the Maine Central over
the other line, are not maintained; and L am
slow to believe that men of the large business
capacity, and having such large interests at
stake as some of these defendants had in the
Maine Central could be so egregiously deceiv-
ed in the matter of comparative values. At all
events, in my Judgment the evidence here pro-
duced preponderates against that hypothesis.
One of the contracts provides that the stock
to be issued to the Portland & kennebec Rail-
road Company as part of the consideration OF
this lease and both the contracts shall be
deposited with Hon. Joseph II. Williams to
be held by him 10 abide the disposition of the
suit in equity pending at the time the contracts
were drawn and signed in favor of the kenne-
| bee and Portland Railroad Company, against
| the Portland & Kennebec Railroad Company,
1 Al, 'o,,tro Pail
rood Company, in case the Portland & kenne-
bee Railroad Company were Invested, in con-
sequence of said suit, of any part of their line;
in which case the leased property was to be re-
stored to the party found entitled to its posses
SION the lease to be cancelled, and the income
Of the property while in possession of the les
sees divided as equity should require; and the
evidence shows that the stock and contracts
were thus placed in the hands of Mr.. Williams
This disposition would seem sufficiently to
cure the interests of the Maine Central and
the compliments, so that all the allegations In
the bill in relation to that suit and its merits
might well be passed by, even were it not the
fact that a majority of this court have concur
red in disnissing that bill and holding the fore
closure in the hands of the Portland & Ken
nebec Railroad Company perfected. While l
did not concur in that decision, acquiesced
in il as a determination OF the cause, and can
attach no Importance to the allegation that the
proposed lease is in fraud of the rights of the
kennebec & Portland Railroad Company and
liable for that reason to be annulled.
The allegation that the stock insured to the
Portland and Kennebec company in pursuance
of the contract was delivered to Richard ID.
Rice, in order to prevent the bona fide stock
holders of the Maine Central railroad COM
pany from retaining the control thereof, |
must consider as disproved. 1t does not APP
pear that any one voted on these shares upon
the question of the ratification of the contract
but the stockholders of the Maine Central
on the 3lst of May, by avery decided MAORI
~, ON heavy stock vote, refused to post
pone the consideration of the question of the
ratification of these contracts, and thereupon
by lighter vote, but without any voice in
the negative, proceeded to ratify the con-
tracts.
It's claimed that this ratification was illegal
and of no effect because Messrs. Lockwood
and Dunn threw greater number of votes
and pretended to represent greater number
of shares than the largest number held by any
individual stakeholder in the corporation,
which, it is asserted, is contrary to the law.
The affidavit of Mr.. Drummond established
the fact that the practice has prevailed for
many years, both in the Androscoggin and
Kennebec and Maine Central companies, for
the use of proxies by any party without re-
gard to the number of shares held by any one
member of the corporation, and my attention
has not been called to anything in the charter,
bylaws, or the general law of the State, that
makes such a practice illegal. 1t seems to
me to be forced construction of the by laws
which would prohibit it, and inconvenient
and, for ought | can see, useless for the pro-
lection of any substantial rights of the stock
holder.
1t is hardly necessary to remark that this
hearing has produced nothing in the way of
evidence in support of the allegations in the
bill of fraudulent combination and intent
among the individual defendants.
1t would seem then that both the directors
and stockholders of this company, by major
ty SO decided as to impress one somewhat for
chilly with the earnestness of their conviction
that the measure was one calculated to pro-
mote the common interest, have done what
they could to establish this arrangement for
lease of the one road to the other, so that
both might be placed under one management
and operate no longer as rival and competing
roads. Beyond vague general prediction ofruin
and calamity, nothing has been placed before
me to show that the interests of these com
plainants as stockholders are likely to suffer
thereby. What there is of evidence tends rath.
these negotiations and after they were COM
pleted, the stock of the Maine Central con
tinued to advance from the very low figure at
which it has stood in past years.
| 1t remains to be considered whether the in
crease should be prohibited or forbidden by
existing laws.
The compliments rely upon section 81,
chapter 81, of the Revised Statutes of 1857,
by which it is provided that no such corpor-
alton can assign its charter or any right
under it, lease orgrant the use or control of
its road or any part of it, or dives itself there
of, without the consent of the legislature. If
this were all, the case would be clear, and the
acts and contracts under consideration must be
deemed unlawful, But the respondents claim
that "the consent of the legislature" has been
obtained, and cite an "Act to authorize the
consolidation of certain railroad corporations"
approved April /, 1856, and amended March
II 1862, which authorizes in express terms the
consolidation of the Androscoggin and Kenne-
bee railroad company, the Androscoggin rail
road company, and the Penobscot & Kenne-
bee railroad company, or any two of them, and
contains the further provision that any corpor-