Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1876-10-27
tn. Vernon, Valley Railroad Case

The long-contested Valley railroad suit,
between its stockholders and parties who
claimed TO be its officers and managers, has
been decided in favor of tho stockholders
by the circuit court of the United States,
Judge Johnson presiding. A brief history
Of the case, as we understand it, is this:
In 1871 new corporation was created by
parties holding the second mortgage bonds
of the road, who took possession of The
property subject to a mortgage of $500, 900,
this corporation being composed almost
entirely of persons largely interested in the
Rutland railroad. In 1872 the $500, 900
mortgage became due, and in order 10 pay
it new stock was created to the amount of
100000 and sold, and the bonds paid, this
new stock passing into hands not in the in
terest of the Rutland railroad. These new
stockholders, joining with such Of the old
stockholders as were not Rutland railroad
men, owned trifle over six-tenths of the
stock and proposed to manage their own
property; but at an election held in 1873
they were served with an injunction from
the Vermont courts, brought by the Rut-
land interests, fOrbidding them to have any
election. This injunction, upon a hearing
before Judge Wheeler, was dissolved, and
these stockholders then held meeting and
elected board of officers who undertook
to lake possession OF this property and its
assets, but upon demand being made by
the newly elected treasurer upon the old
treasurer, Williams of Bellows Falls, re-
fusal was made 10 the surrender OF any
thing, books, papers, or seal of the corpora
ton, or of any funds belonging to the conf
pany. An attempt was then made by these
officers 10 reach this property through the
Vermont courts, but they were rebuffed by
a decision from chambers by Judge Barrett
In such way that an appeal was not in or
der. These stockholders, of whom large
majority were non-residents, then COM
men ced suit in the United States circuit
court before Judge Woodruff. The ques-
ton of jurisdiction was pushed by the Rut-
land interest, but al hearing before his
honor at Windsor in 1874, Senator Ed
munds arguing for the Rutland and L. w.
Stoughton, Esq, of New York, for the
stockholders, the question OF jurisdiction
was ably sustained by an elaborate opin-
upon its merits before Judge Johnson in
New York, and, as before stated, has been
decided upon all points in favor of the
stockholders, giving them the entire con-
troll of their property and ordering the old
officers TO surrender all assets, etc., in their
hands TO the new board.
Th is decision declares that a pretended
lease said to have been executed by Page
on the part of the Rutland road, and Will
liams on the part of the Vermont Valley
road, for twenty years from 1871, is void,
and that no equitable agreement is In ex-
list ence for such a lease. That the poss es-
sion OF the Valley road since June /, 1875,
by the Central Vermont is without any
right or authority and that they be decreed
TO remove from the same. That the trus-
tees, Morris, Page and Williams, be direct
ed to settle their accounts and pay over the
funds to this board of officers. 1t may be
well to say that in this contest, Gouvorneur
Morris, president of this new board of dl-
rec tors and chairman of the board of trus-
lees, has always sustained the legal rights
OF the stockholders and been anxious "a
close his trust since October, 1872 but his
co-trustOes, Page and Williams, would moi
consent. This contest has fully ratified the
old fashioned common law doctrine that
stockholders of corporation have certain
rig hts which neither its officers nor reeeiv-
ers Of the courts can treat with impunlty.