The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1876-01-27
THE VERMONT VALLEY RAILROAD.
Right Of the Directors to Extend Lease
against tho Protest Of the Stockholders
History of tho Case.

Right Of the Directors to Extend a Lease
against tho Protest Of the Stockholders
History Of tho Case.
The Vermont Valley railroad, which ex-
tends from Brattleboro to Bellows Falls,
VT, was, prior to 1876, subject to two
mortgages-the first for $4,000 and the
second for 100000. The first mortgage
had been foreclosed, and the title to the
property had been vested in the trustees of
the mortgage. On May 10, 1865, Alexan-
der Hamilton, Gouverneur Morris, and
Hugh Henry, the trustees, leased the road
for ten years to John b. Page and Edwin
A. Burchard' who were mortgage trustees
in possession OF the Rutland and Burlng-
ton railroad, which connected with the
Vermont Valley railroad at Bellows Falls.
Under this lease the road was operated
until Jan. 90, 1871, when an assignment
was made to the Rutland railroad com
pany, which was organized by the mort
gage bondholders Of the Rutland and Bur
lington railroad company. The Rutland
railroad and the lease of the Vermont Val
ley road were assigned to the receivers of
the Vermont Central and Vermont and
Canada railroad. The lease of the Yer
mont Valley railroad meanwhile had been
renewed for twenty years from the time of
Its expiration.
A suit for foreclosure of the second
mortgage was brought in October, 1871,
and the road passed into the hands of the
trustees of this mortgage, who in the fol-
lowing year organized as the Vermont Val
ley railroad company, Gouverneur Morris,
John b. Page, Peter Butler, George b.
Chase, James II. Williams, John Prout,
and George Slate being elected directors.
AT the first meeting of the directors-with-
out the consent of the stockholders, it is al
leged-the president and secretary we're
authorized to lease the road to the Rutland
railroad company for 20 years, from juno
/, 1872. In passing this vote, it is stated,
the directors had their own interests in
view, as they held much of the stock of
the Rutland railroad. At meeting of the
stockholders on Sept. 3, 1872, it was de-
cided to issue $500, 900 of additional stock
to pay the balance due under the first mort
gage. 1t was also decided that the road
should not be leased without the consent
of the stockholders. On Nov. Z, 1872, the
directors again authorized the president
and secretary to execute the lease tor 90
years to the Rutland railroad company. An
Injunction against the execution of the
lease was obtained by some Of the stock
holders 1t is also claimed that a secret
lease was made by Williams, as receiver of
the Vermont Valley railroad company, and
Page as president of the Rutland company.
In the epring of 1878, the stockholders
elected new board of directors, with the
exception of Mr.. Morris, who had opposed
this lease. The old board, however, deny
the validity of the new election. In June,
1873, the Central Vermont railroad COM
psny being appointed receiver Of the Ver-
mont Central railroad, succeeded to the
lease of the Valley railroad. At the expl-
ration of the lease of the latter, on June /,
1875, the directors demanded possession of
their road. The Central company claims
to have been defrauded by the Rutland
company.
The argument on the right of the direct
ors, without the consent and against the
decision of the stockholders, to renew and
extend the lease of the Vermont Valley
railroad, was begun in New York, Tues
day before Judge johnson, in the United
States circuit court, equity side. L. W.
Stoughton and E. j. Phelps appeared for
the orators, and Judge John Prout and Sen
ator George F. Edmunds for the defend
ants.