Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1876-04-28
Fer the Free Press AMI Times
Central Vermont Quo Warraufo.

An article which appeared in the FREl
Pass AND TINES Of April 7th. IN regard Il
the decision Of the Supreme Court in thii
case, demands an answer The writer
evidently wants light He asks thu.
/ broad. comprehensive and conditional
/ question Now. i there any legal minded
man in the world that can honestly say
that the court could have decided different.
" on any known principle of law. 30 long
Is Nj Lsngdon's testimony was not dis.
puted2 ?"
The reply i tina. there are well known
principles OF law. absolutely essential to
the security OF all corporate property.
WHICH demanded of the court different
decision, whether Mr. Langdon paid the
money or not. Such "a these. u Wit
l. Directors are trustees for the use and
benefit OF stockholders. of all the property
Of the corporation.
,. They cannot be permit.e to secure 10
themselves, by the sale of stock or other
property of the corporation, advantages not
common to all tie Stockholders
;. ANY attempt - gain sGch advantage
by measures kept secret from other d.
rect0rs and stock holders, would be fraud
ulent.
4 The purpose Ly certain directors to
effect their own reelection 10 Office by a
secret sale, % one of their own number, of
stock belonging to the corporation, is
fraudulent purpose, and that fraudulent
purpose entering into the sale would make
1t void.
The above propositions are supported by
abundant authority and are consonsnt with
common sense and common honesty Now
a. to the facts
|. The shares sold to Mr. langlon came
into the possession Of the company by pur-
chase They had been originally subs:rib-
Ell To- and the first assessment So per
sharc-paid thereon. They were then bought
by the company by the payment of the So
paid IN thereon. Instead Of taking the
safe and wholesome ground adopted in
some States, that such n transaction would
be Illegal-Or at least cancel the stOck-the
court ratified it and held that a CORPORA
ton may buy IN its own stock and keep il
on hand tor rei-sue-ihus showing how TO
avoid the effect OF Il law requiring a GER
tam capital TO be subscribed in good faith.
as basis OF credit, before organization
III. Gov. Smith sid and transferred to
Langdon. co-dIrecior and trustee. secretly,
just prior to the election. $50 shares of
said purchased stock enough tn carry
the election. The vote on these |, $50 shares
elected Governor Smith and Langdon and
their party. Tnis sais t. Laugdon, there
fore. passed over L. hin not merely the
shares, but what w,> of far more value,
the control Of the e operation for himself
and party. These shares aud the votes
thereon belonged to the stockholders who
were nearly all present and were entitled
each TO their pr0pIrtionats share. but
were not permitted 10 enjoy their rights. |
DID not these two dir ctOrs. or trustees, by |
their secret trade. obtain Tor themselves /
advantages not common to all the stock |
holders? Were they elected to their Offices |
to enable them. by hus appropriating to 1
themselves the trrs; property. to defeat the |
will of the majority Of the stock holders?
Ill. What was the purpose OF this sale /
MIR. LangdOn testified that he purchased
The stock 30 raise money to pay the Yer
mont & Canada Co. on the lst of June.
1875, and tor the al .itional purpose OF en-
ioling himself TO vote upon il in the cleo
ION OF directors on that day. II turned
)ut that TO money vas. IN fact, wanted TO
pay the Vermont Il Canada Company on
ne LIST OF June, anu none was paid. The
'0tes, hoirerer, tcere ranted and used. All the
circumstances as detailed in the testimony
'oint so strongly in that direction, that
honest Deacon Est y was implicitly be-
ieved when he said me object of the sale
II stock " was to nv the election; anu
o thought the court
Judge Redfeld. in giving his opinion.
avs: - although The court think that The
ontroliing mOfIre ic0 TO rOte on The stock.
ct as the sale appears to have been actual
nd not colorado, al sOlure and not condi-
Ional. and has been 80 treated by vendor
nd yendee," etc, etc. (See FREE Pass
eport. January 24lh). The court was not so
lind a. to tail To see what ever, body else
aw
Such purpose animating and control
ng these two trustees. as they then appro-
rated to themselves the votes on this
took of the company, was fraudulent az
the other stockholders, and rendered the
lie to Langdon, void. absolutely. The cor.
,pt purpose tainted the whole transaction. !
e Fisher VS.. Concord Railroad Company ;
N. II Rep. p. 1855. ct seq and many other :
lsee.
The questios how far q fraudulent Dur i