The New York herald., 1876-12-02
THE COURTS.
Rufus Hatcl's Effort TO See the Books Of the
Lake Shore Company.
A NICE POINT OF STATE LAW
Verdict Against the Government in the
Ciafiin Suits.
AN OLD ARMORY SUIT.

The important litigation instituted In tho interest
and behalf OF the stockholders OF tho Lake Shore
and Michigan Southern Railroad, which has already
been referred 10 in the HERALD up for argument
In Supreme Court Chambers yesterday, before Judge
Lawrence The proceedings are in the nature of
application for mandamus to compel William II.
Vanderbilt and other officers of tho Lake Shore and
Michigan Southern Railroad Company furnish to
Messrs Rufus Hatch and others, stockholders Of the
company full list OF its stockholders facilities for
making such list by an inspection OF the company's
books. Both sides numerousy represented by
counsel those appearing behalf OF the plaintiffs
being Messrs. Henry s. Bennett Aaron J. vanderpoel
and Robert Seweil; those Tor defendants, Mcssrs.
william N. Evarts and Charles II. Tweed Tho
Intimate object of the proceedings, as already
stated in the HERALD, is to obtain facilities
on the part OF the stockholders of the road to
suit in their interest and against the present
directors whereby, 1T is alleged, the finances OF the
company shall be enhanced the present Improbable
freight Increased and the company
enabled to pay a dividend to its stockholders.
The motion opened behalf OF plaintiffs by
Mr. Henry S. Bennett who stated tho SUBJ
ltance OF the afidavits which the motion for a
nandamus was founded These set forth that Messrs.
Hatch Gage, of plaintiffs, had applied to Air. William
4. Vanderbilt and to the President Of The Farmers
Loan and Trust Company the transfer agents. Tor a
s the stockholders OF the Lake Shore and Michigan
Boutnern Company; that plaintiffs represented
$6Uo0,O00 oil the stock OF the company; that the list
refused by Mr.. Ralston the transfer agent, unless
permission was given by Mr.. William II. Vanderbilt
the Vice President OF the company Then, Mr.. Ben
nett continued Messrs. Hatch, Peabody, Russell
Sage aud several other stockholders, owning in the
aggregate aoout So 900, 600 OF the stock, joined
a letter Mr.. Vanderbilt asking him to give
tho requisite authority Mr. Vanderbilt replied
nenying the request on the ground that he thought
some OF the stockholders would ouect 10 having their
names published 10 this letter these same gentlemen
replied stating that they did not design publish tho
aanes, bat wanted the list solely TO enable them
with the stockholders respecting cooper
it,ye movemont 10 prevent The runous competition In
feght and passenger rates that was so disasirousy
affecting the value oi Tho stock and dcpreciating
.hc property. To this last letter Wander
bit replied, percmptorily declining to al arn any
ntner facilities Tor communicating witt. me stock
holders than ihe law should him Ave. These
gentlemen claim that they then had other aerna-
i've than abandon the road to its tate or 10 mako
Inns application. The anidavt first contains facts
which ii IS claimed will show that this road is within
the meaning of the statute foreign corporation
and that the statute requiring transfer books
10 be exhibited to stockholders OF foreign corpora.
ton applies In this 1t is averred that this
consolidation OF SIX different railroads OF about 500
miles in length, reaching from Buffalo to Chicago
the entire road except sixtyeight mlos lies without
the territory and jurisdiction OF this State; that each
OF these roads derived its character from other States
than that OF New York, except the sixty EIGHT miles
which was formerly known us the Buffalo aud Ere
road which surrendered ITS corporate existence, lost
It's identity and became In the consolidation.
The affidavit urther states that the annual election of
directors takes place in foreign Statc-to wit
Cleveland, Ohio; that it is ths place OF de-
posit Tor It's instruments of title aud It's funds;
That its annual report emanatcs thcrcirom, and
That all OF its active heads OF departments have their
pticos aud reside there: tnat 1t in fact has all the
characteristics that distinguish foreign from domestic
corporations except that an enabling act was passed
BY the Legislature Of this State recognizing The
solidaon, but that act also contained provision
dering the consolidated subject every penalty
and liability which would have existed against either
oil the roads had they never been consolidated But
should the Court determine that those stockholders
n ln MI
contains other facts which, as alleged, constitute a
new and distinct ground for the relief asked TOR The
affidavit states that the present Board OF Directors
under the regency OF Mr.. Vanderbilt, have adopted
and pursuing policy which is seriously diminish
Ing the revenues OF the road and sacrificing It's inter-
And is with view to protect those interests
that the interpositon OF this Court asked, COM
pei the exhibition OF the books TO them, that they
may be able 10 unite with their fellow stock
holders IN preventing further slaughter OF their
common property and IN securing faithful and
economical administration. The petitioners that
Mr.. Vanderbilt, who rs the Vice Preside ut and control
ling spirit in the New York Central road occupies the
same commanding position IN the Lake Shore road,
where he does ana exert the same power and
tuense the management OF IT'S affairs That though
such Wee President and trustee he owes equal
Guiy both roIGs, yet cInnot and does dis
charge his to Ootu with equal fidelity Tor the
reason that his interest IS not identical with but
aeluay adverse 10 those Lake Shore road That
lis pecunary interest the Lake shore road Is incon
staerabIe IN comparison with ms overwnern,nn IN.
tcrost tho New York Central road That by his In
rueucc and management he has made the Lake Shore
mere appendase outlet to tho New York Gen.
Lake shore is suffering material loss That
sequence The Lake shore has ceased earning and
IN dlyiienas watch tho New York Central, notwith-
standing the great competition, continues earning and
paving Iis regular dividends.
Tue affidavit further states that Mr.. Vanderbilt Is
opposing and seeks to defeat this application, because
The interest oi the stockholders, ascertanng the
lac 5, would naturally and inevitably lead them to
nute In interfering with and arresting course which,
wade largely increasing Mr. Nanuerbt's income, cor
rcspondingly diminshes their own
THE ANSWER.
Nr. Charles H. Iwccd then read the aEdav1tS sub
mitied ou behalf Of defendants. They were made by
MessTs William n. Vanderbilt, the Vice President OF
the road Mr Wooster, the Secretary, and several of
officers Eacn curroboraed the other, and tai
altogether the substance was as follows They
deny IA great the allegations contained IN
plaintiffs aldaviis. and assert in opposition to those
allegations that this rs corporation within the mean
ing OF the statute relating TO domestic CORPORATIONS in
this state; that under the statute tho company is
compelled TO show It's books only during thiry days
preceding the annual election of directors. and that
that Goes not again occur until May 1877; that
Reductions were made IN either frcghis iares
read except such rs were necessary 10 ccmi cite
with rival lines; that the distribution Of freight
made under rules adopted more than i've years ago;
that discrimination has been made against iake
shore and IN favor OF New York Central that the rea
son he former not pay dividends and the latter
does is incident to circumstances surrounding the
respective lines themsclvcs and not 20 the manage
mcIt Of either; that all that has been done by the a.
relation to Lake snorc has been done IN the
interest o the stockholders. and that no
proposed to be taken By plaintiffs help those in
tcrests that Short the directors dong the very
best tor the interest OF the road and
lis stockholders and that at the last election
present management iudolsed by vote oil nearly
four-nfths oi the stockholders.
Mr. Scwall followed in argument TO sustain the
application. lie enlarged upon the facts forth
Ia the aldavs OF the plaintiffs and contended that the
Slain OF Tie latter based upon rules OF law
,ldcr than any OF the statutes, aud sprlnging from
principles which lie deep down the law OF the land
Nr. William VI. kyarts argued against the arpli-
salion with his Characteristic force and clearLcss.
Decision reserved.
THE CLAFLIN SUITS.
Two suits were Instituted by the United States in
tnc month OF October, 1875, against II. d. Claan (
Co., dry goods merchants and portcrs OF this city,
Ior the recovery of $1,000, 900 charge iha, they
aal bought and concealed goods, Xnowing them TO
have been Illegally imported INTO the United States.
M. anti ~ as Tor eQIn n0n and The nfhnr Tor <5hn nnn,