The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1871-01-28
ANOTHER ERIE RAILROAD RucTlONt
Another Of the Interminable Suits Against
the Erie Railway Managers Before
the Supreme Court General Term.
Attempt to Get Dividend Ont Of tho Con.
cern-How the Old Thing Works.

or course there could be no session OF the Supreme
] Court General Term without some Erie Railroad
| suit coming up for adjudication. Judges Barnard
ana Cardozo, who occupied the bench yesterday
Judge Ingraham not having yet recovered from the
freezing process OF the day previOus-had their at
tention occupied nearly all day with the case Of
'John B. Peck Va. The Erie Railway Company
This case has been so
FREQUENTLY BEFORE TER COURTS
that public familiarity with 1t long since reached the
al ndusean point Briefly told 1t Is thls:-The plain
t Is the owner and holder OF sixty shares OF Erie
Railway preferred stock, and brought this suit on
behalf OF himself and, as he clnims for all Others
similarly situated, to compel the declaration and
payment of dividend upon the preferred stock Of
the company out Of the net earnings OF 1868. Tho
road claimed that there were no net earnings real
ICED by the road that year. The plaintir insisted
there wefe but that the same were diverted into
other channels in violation Of the contract by which
the preferred stock was given and received. The
referee to whom the case was referred rendered a
decision IN favor OF the railroad, and hence the
present appeal.
ARGUMENT FOR THE APPELLANT.
Mr.. Thomas Darlington made the opening argu.
ment for the appeal In his preliminary statement
OF the facts he claimed that the contract regarding
this preferred stock specifically set forth that the
same was given and received In payment OF the un.
sec ase;edpss' Of the Erie naoaa COMPANY
esdan Interest their aen ro. s ss
one millions pounds sterling loaned to them being
e. sa'e 81 'fas sna M
tIs Aa
Iisa,s !hs paniIa such proerTsd sSsrescds
he tens h0' of III
sAst
8 s . ~ 'Ss disc S.n q;
% s he s
that the only questions therefore was whether those s2
Pendant. paid before esrnlSs." as sSosS
words used in the contract with the plaintiff be
Just aeb, as ssains. the defendants was
the preferred ana under their Contract with the bona
holders the defendants Justified paying that inter
their to the psn anS those IN i ike
that the rents due other railroad. By
the defendants subsequent their with olde
nss an a 81
rsspee,ye parties 70 III. action Only
the respective parties a. that time. His -
r,. ,,., o.. ,r,. r.,. THIRD ro OLE r.,,
stock to the defendants no matter what the Of theft
lss q a not oa ny Do es S on re-
ceye seven per cont interest on the amount OF their debt
matter how great may s Be ns eoa. q road H'
shSt as ass a m 4 and
AEegMENT FOR THE RAILROAD.
rs e
sS% IA ss H Ss as %
company owners the preferred Stock and
that s time the new company wa, formed the property
old company and considerable property leased
pa E
rs s s
"a ss o s Of 1ds a sa and
L ns ss d. !: ss
ssS ss ss r.
the road e ,ss which rsp.i
e sns sss
W * be ss @ Dc s
the compsns business and that the largest item OF rent
ea y nss s S+ns
as nsf o. he $,
1'i % aG Ss
sS a ss r hs s
paid on bonds and notes there 4 question tina!
E5sis;,Tsd sssss d only to the
a ne s Frs Rwy had no ea.nns
the o. .nng k Of e GS0poTaon az
esrn s Of
Kind are part OF these expenses. His
that the mortsage INTEREST," delayed coupons"
Erie wa
s due pcn ss Of o Se
k and s k al Ss There
ms that s, the onas ga male and the charter
Railroad Company had executed I'VE mortgages pay
Or four ysar The object Of the contract the chae
whole
the phrase met earrings" necessary eI:
40 entirely dsSc, Corporation. s"a aasm % 'eGs:
asnf s :
tore s 70
Of its z, The that The
ss &c ss5.' wssS
into End BY 's entire purpoE showed clearly
pany would entirely sapsrdaass Preparing s%
he rae
to bn single corporation swhen the charter Of Che new
BE sspS s ss a
SSsd S
Ri The
Ss isl,. preferred ssosxIodeTs sonserasd
nothing to do with the mortgage steep OF the Kr:
from e ee s 1sssa
al ne ret ss
upoa mortgage debt not The correctness of these pro-
positions Is well established by the familiar rule that con.
tract to be interpreted with reference to the
under which II was made. Hs
THIRD POINT
that the preerrei stockholders members OF this
corporation cannot be entitled to which
would either be fatsi the existence
wouli impair the rights OF its creditors No contract be-
tween the sockho ders give to all oil them
such advantage They must necessarily all stand fall with
the corporation SO long the corporation has proits
on hand which are not needed for payment OF tho
debts the corporators may give what preference
they please among themselves, but they cannot
make any contract which shall deprive creditors whether
existing subsequent OF the benefit OF corporate fund
Though there should be hundred p among stock
holders creditor OF the corporation take rrece.
dence OF all. Inc
FOURTH POINT
that the statute under which the
porated DAVIS 1851 CHI fl) Intended to awe pre-
iored stockholders preference credvs ana should
not DO construed as hayag that effect Ills
FIFTH
that " tho plaintiffs Interpretation Of the
the charter correct would the suit
cie OF the corporation aad the destruction pan:la
property. The
SIXTH POINT
was that the Etc Hallway Company has m powerto Dor