The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-06-07

The Pacific Mail Steamship Company I'm
COurt-Restraining the Omcers from
Loaning the Company's Moncy-The
Company to Produce a Full Tabular
Statement of Call md Time Loans.
Before Judge Tappen.
James b. Bach vs.. The Pacific Mail Steamship
Company A. q. Stockwel, Joseph d. Smith and
Others-'rhis case, which was reported in the
HERALD last week. before the Court yesterday
again. 1t is an action to obtain Judgment as fol
lows
rysThat the defendants and each sS Of them be re-
sa or %s oa sa or the or
s"s S
yleposng the ssn,s in some responsible trust company
Seeond.That the defendants and each OF them be re-
strained by Injunction from extending or using the sur
thereof for any purpose other than to meet cxtraordi
nary emergencies requiring expenditures for the proper
Third-rhat The defendants, and each Of them, be re-
the moneys, funds securities Of the said company,
S par d t 81 S E,hsT to PAY e re-
legitimate business according to the terms Of its charter
,ame IN United states goyernment or New York State
the city Of New York '''p""' y
The plaiti,n charged that it has always been the
policy OF the company to keep on hand a large sur
plus fund to provide against any unexpected disas-
ter TO the vessels or property OF the company.
which surplus fund, on the 18th of November,
amounted to more than three millions of dollars.
This large surplus fund the defendants have been
using on Wall street purely for their own advantage
and personal interest lending it to themselves on
time loans and insufficient securities. using 1t in
disconnting paper in other banking business and in
private speculations of their own
Judge Pratt having granted a temporary injunc-
ton, the case came up yesterday on motion to
make the Injunction permanent,
Il. w. Stoughton, David Dudley Field and Mr.
Bergen appeared for the PLAINTIFF, and Homer A.
Nelson and Levi a. Fuller for the defence.
Mr.. Bergen read the complaint and affidavit of
Mt. Bach, einbodyng great portion of the test
mony OF Alden b. Stockwell, the President. before
the referee In Il suit similar to the present onc
brought some time ago by Mr.. Arthur c. Challis.
Judge Nelson read in reply an affidavit OF Alden
B. Stockwell, denying most Of the material allega
tons of the complaint, charging the directors with
transactions not consistent with the best interests
OF the company. Appended to this AFFIDAVIT is
quarterly statement of the affairs and assets of the
company dated May l, 1872.
Mr.. Stockwe says in his affidavit "that all the
loans made by SAID company since November 10,
1871, except the item OF s242 100 mentioned as time
loans, are loans of money not required for imme
date use by said company, payable on call or de-
mand with interest and secured at all times by
proper and abundant security free of risk and haZ-
ard, the cash value of such securities being at all
times from ten twenty per cent more than the
loan secured thereby
He denies 'that the officers or directors OF the
company have sold any OF the securities 81 the COM
pany, or converted the same into money without
any occasion or necessity on the part of the COM
pany, for the use OF the said company
Mr.. Bergen argued tDat Tue al11aVlI OF MT. StOCk-
well was insufficient and that 1t aid not meet the
allegations of the complaint. He asked for the ap-
pontment OF a referee to take testimony, that the
plantiii might discover In what the company had
the surplus funds invested. lie insisted that the
stockholders had a perfect right to such knowl-
edge and whether the directors were improperly
using the funds OF the company.
Mr.. Nelson. on behalf Of the company, said the in
junction was not properly granted, and they OPP
posed the appointment OF a referee This was all
the plaintiff wanted, merely to hold the injunction
over the company and depress the stock In the
market. II was effort to make "A court OF equity
an auxiliary to the schemes OF stock SPECTATORS.
Mr.. Stoughton said that there was no such desire
on the part OF the plaintiff and most certainly not
on his part. He read Mr.. Stockwell's afildavt and
criticised 1t at length, pointing out wherein IT did
not meet the allegations OF the complaint He
claimed that the directors OF the company were
trustees OF the stockholders, and should not be al
lowed to invest the funds Of the company In other
securities than such as court OF equity would
allow any other trustees to invest in.
Mr. Nelson insisted that there should not be
reference. He desired to meet the legal points In
the case upon the papers, and argue for the ques-
ton as to whether the plaintiff was entitled to-
an injunction. He claimed that the directors
had perfect right TO act as they were doing, and
there was no case shown why the Court should In
terfere.
Judge Happen issued the following order in the
case
4 adjourned until June z, at r. NJ, at the Court
jccting.
secoadrhat the defendants produce at that time full
made by the said Pacific Mail steamship Company which
were outstanding when the Injunction In This action