Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1876-01-26
The "Quo warrnnto - Case.
DECISION or TIE SUPREME c1uRT SUSTAINING
GOVERNOR sMirH-A frtL ABSTRACT or TIL
COURTS OPINION


GOVERNOR sMirH-A ruIL ABSTRACT or rnr
COURTS OPINION
Just previous to the adjournment Of the SUI |
premo Court at st. Adams, last Saturday fore
noon, Judge Redicld, in behalf Of the court, de- |
livered an opinion Diminishing the application Of
Governor Page and his associates for leave 10 file
an application for writ Of quo ,odrranio, and sus-
tanning the legality Of the election Of Governor |
Smith and his associates, last spring The follow
ing is a full abstract Of the courts opinion
Judge Redncld began by stating the nature Of
the case and discussing the practice in this state
upon former applications Of the kind lie then |
went on to say that the case disclosed that the
Central Vermont Company had by the court Of
chancery been appointed receyerand held in trust
the Vermont Central railroads, and are operating
undor leases several other railways, in this, and
other states The trust duties, thus imposed, are
active and executive in their nature involving
important duties and responsibilities both to the
cesfm que trust and the public and mourning
necessarily from day to day, large liabilities, in
intricate and often complicated transactions, in
the administration Of the trust which, from the
nature Of the case must be largely outstanding
and unsettled one Of the incidents OF receiver
ship Is bond, commensurate with the magni-
tudc Of the trust approved by the court Of chan
Gerry; and to respond to that court for the prop
elty its income, and all lacks Of administrations
Such bond is presumed 10 have been furnished by
those who have assumed the duties, and have
been the active administrators Of trust lfthepres-
cnt incumbonts should be ousted they would have
the right to require that their personal liability by
bond, or otherwise, should cease with the custer
and the chancellor would doubtless require new
bonds to respond any lacks OF administration
How farperonal character, capacity and RESPONSE
bility induced the appointment Of this corporation
receiver Of this large and executive trust Is known
only TO the chancellor The court Of chancery
has absolute control Of the trust and its admins
trations; and may so temper any order as to re-
strain using, and insure justice While this court
has no power upon this application but to grant,
or refuse petitions without discrimination as to
the fitness, or unitnoss Of men for the admins
tration Of important trust, it is easy to fore
see that it is possible for complicated questions to
arise between the outgoing and incoming dlrector
~ to liability and responsibility and for litga-
ton to spring up subjecng the trust to new bur
dens, without benefit TO the parties or the public
We have ne warrant for saying that such mischief
would necessarily, follow but TO some extent it
is possible, and, perhaps, probable; and though
not Of controlling weight when there is satisfactory
proof that the office has been usurped by force
fraud yet they are proper matters for consldera
ton in the exercise Of that judicial discretion
which the petitioners invoke.
| The right Of the respondents to hold and exer-
else the office Of directors Of this corporation, de-
ponds upon the legality Of the votes cast by Lang
don and Mills, on the stock in question II such
] Il.
duly elected Observation-Disclosures not
Waving, for the present, all consideration Of
the alleged conspiracy, on the part ofthe respond
ents to forestal by fraud, the majority Of the
stockholders, in the election Of the 18th Of MAY
last; and assuming that the transaction had
wholly occurred six months before, and without
reference to an immediate election, we enquire
whether langdon and Mills stand as purchaser,
and owners Of such stock in this corporation.
Mr. Parl, and associates in New York had agreed
with Governor Smith and associates, in Vermont
that they would subscribe for twenty thousand
shares Of stock in this corporation, and in certain
agreed proportions. Park In executing his part
Of the contract signed in the name Of the friends
in New York, fifteen hundred shares, without au
thority, which they repudiated; whereupon Park
assumed such subscriptions as his own, and paid
to the corporation the re per cent required by the
charter; and the stock was entered upon the books
Of the corporation as belonging to Park. 1t is
urged that this stock having first been subscribed
in the name Of Myers and Mckinney was their
stock and Park, showing no written assignment,
has title property in it But Myers and
Mckinney repudiated the subscriptions, and re-
fused to pay the required instalment, and, as to
them, it was no contract, OF subscription And
when the corporation accepted the five per cent
on this fifteen hundred shares, as the requisite
sum to make the subscription binding, from Park,
and as payment in his own right, and especi-
ally as the corporation entered their books this
stock as belonging to Park, Park was not only
} the equitable owner, but the original subscriber
for the stock. After the corporation had been
made receiver In it, representation that twenty
thousand shares had been bona fde subscribed,
then fifteen hundred shares were transferred 70
the corporation, and five dollars per share was
paid therefor by the corporation to Park
Z and the sum that Park had paid to the corpora
ton to render valid the subscription 1t is claimed
that the stock thereby became merged and ex-
tnguished. The interest Of the parties aud es-
pecially Of the corporation, represented in the
character Of such transactions, the corporation
had no right to diminish its capital stock The
evidence concurs that the corporation purposed
under advice Of counsel to hold the stock as not
merged but subssting as assets on the books OF
the company. The sale and transfer Of stock, il
done by proper authority, and was actual and not
colorado, and not affected by any secret trust
II bona die and absolute sale, vested in the pur-
chasers the title to the stock with all the Incl
dents OF title including the right to vote upon it.
tl.a u.,IJ g.. Ia.
purchasers by such authority as should bind the
corporation? We think the majority Of directors,
who assembled on the directors car and passed
the resolution authorizing the sale Of this stock
to meet q liability becoming due the first OF
June after cannot lawfully be claimed as organ
lied under the call Of the clerk to meet at
Bellows Falls at an earlier hour Of the same day,
if we should hold that the call Of the clerk, by
telegraph, was In accordance with the bylaws,
and the time sufficient We think the attempted
adjournment by a minority to a point fifty miles
distant was irregular, and did not transfer the
place OF legal renue under the call to White
River Junction. But quorum of the directors,
regular in FORM assembled on the car, and by
resolution authorized the sale Of this stock and
under that authority the stock was sold, and ar
the proof stands, for adequate and full compensa-
ton, received by the company.
Our statute makes the majority Of railroad di-
rectors board competent for the transaction
Of the business Of the company which would
seem to imply that majority of such directors,
however assembled, were full board, competent
to transact the business OF the company by the
concurrence Of majority of such board We
think the sale of the stock under this resolution
of the board of directors, II bona .fde and beneh-
cial TO the company was valid sale, and could
be impeached only for cause, and we think that
though the assembage Of the directors, which
authorized the sale, under no regular call,
and the members of the financial committee, who
effected the sale, were under partisan influence,
the sale would be yoidable only on the seasonable
motion Of the party injured, and, II acquiesced in,
would be confirmed. The relator, Mr.. Page, was
not only large stakeholder, and representing, as
he claims, a large majority of the stock, but was
himself elected one Of the directors, on the nine
teenth Of May, and has been up to that time
Nioe-President and chairman of the former com
mttee. lie was aware of the resolution of the
directors and the claim therein, that tho stock
was sold and the money paid to meet the install
ment due in few days, for the purchase of the
property of the Vermont and Canada railroad.
The reatoT could elect 10 challenge the validity OF