National Republican. (Washington City (D.C.)) 1872-1888, 1881-05-16
An Imnortant Dccisiop.

The recent decision of the Supreme
Court in the case of Wardell VS.. The
Union Pacific Railroad Company is of
great Importance. Some railroad corpora
tions of the country have thus far been
able to not only charge rates which would
Weld them dividends on watered stock
two or three times larger in amount than
the actual cost of the roads, but some of
the chief magnates have also eXtorted
from the public and defrauded their stock
holders oflarge profits in the shape ofearn
ings of side companies, or wheels within
wheels. Thus, in the case under con-
sideration, Oliver Ames, president of the
Union Pacific Railroad Company, in 1868
made a most favorable contract with
Godfrey and Wardell concerning coal and
its transportation along the line Of the
road. Godfrey soon transferred his half
to Wardell. In January following the
Wyoming Coal and Mining Company was
formed to develop and work the coal
mines, with a capital of S500000. 4 ma
jority Of this stock was taken by six of
the Union Pacific Railroad directors, one
of whom was Oliver AmeS, the president,
and to this company, made up of railroad
directors, Warden assigned, without
consideration, the splendid privileges
for which he had contracted with the
railroad company. That is to say, the
railroad directors sold out their COM
pany on the coal question to Wardell
and then became a coal company them
selves and received from Wardel the
railroad property, privileges, and cheap
transportation which they had bargained
for with him. This was swindle on the
Mobilier The transaction is held fraudu-
lent and void, and the opinion rendered
by Justice Field bears heavily on the
men concerned in it. He SAYS:
1t hardly requires argument to show that the
scheme thus desig ped to enable the directors who
authorized the contract to divide with the con-
tractors large sums which should have been saved
to the compan:, was utterly indefensible and IL
Legal. Those directors constituting the executive
committee of the board, were clothed with power
TO manage the affairs of the company for the ben
eft OF its stockholders and creditors. Their char
dcIer as eeSeTclSe OF their
for their personal ends against the interest of
the company. They were thereby precluded from
deriving any advantage from contracts ilade by
their authority directors, except through the
company for which they acted. Their position
was one OF great trust, and to engage in sny mat
ter for their personal advantage inconsistent with
it was to violate their duty and to commit fraud
upon the company.
1t is among the rudiments of the law that the
same person cannot act for himself and at the
same time, with respect to the matter, as the
agent for another whose interests are conflicting
Thus person cannot be a purchaser of property
and at the same time the agent of the vendor The
two positions impose different obligations, and
their union would at once raise conflict between
interest and duty; and, as we said on former oc-
casion, constituted as humanity is, in the ma
jnrity ef cases duty would be overbourne in the
struggle" (Marsh vs.. Whitmore. 2l Wallace, 1881.
The law, therefore, Will always condemn the
transactions of Il party on his own behalf when, in
respect 10 she matter concerned, he is the agent of