Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1882-12-28
JUDGE ARMOUR
Grants the Motion Restraining the West
ern Union Telegraph Company from
Paying any Dividends
On $I5,52e,59e Worth OF the Capital
StOck-What the Law Officers OF the
Corporation Say.

NEW YoRK, December z7.-In the suit
which was heard YESTERDAY, brought by VIM.
S. Williams against The Western Union Iele-
grsph and it's director, to restrain the COM
pany from paying dividends on S35, 100000
OF It's capital stock, which, il was claimed,
was Illegally issued Judge Armour to-day
rendered his decision in the Superior Court,
special term. He extensively reviewed the
case, and concluded as follows: "The mo-
tion for an Injunction sgainst paying any
dividend on Sl5, 526, $50 OF the capital stock,
being SO much of the shares thereof as was
distributed IN the stock dividend ia question,
is granted, and in other respects the motion
is denied.n
In the suit of Rufus Hatch against the
same company, 10 which a roo.iou was made
fora reneFslo of the original injunction OBJ
tanned several years ago, Judge Armour rem
dered decision granting the motion for
renewal of the INJUNCTION against he declar-
alton of the dividend upon the stock specified.
Notice of the Injunction has been served
on the compsny TO day, but lis effect is
merely nominal, reaching few email hold
ings as having money, as the treasury OF the
company had already paid the dividend as
on other occasions. As this is part OF a
scheme 10 influence the stock, it is claimed
that further proceedings on the other side
may be looked for.
called this evening at the Office of the West
ern Union Telegraph Company and saw the
law officers, who said leave had been asked
TO make motion before a court. which, if
granted, will stay the effect OF the iuiunc-
ton until the M after can come up before the
Court of Appeals. The argument of This
motion will doubtless take place TO morrow.
With regard to the entoining of the COM
pany against the payment of the dividend
on 81, $40, $50 worth of capital stock, it was
said that the payment of the dividend be-
gan soon as it was declared, as is the
custom OF the company, and without any
knowledge of the court intending to grant
the INJUNCTION to prevent such payment.
The payments began about December 18th,
and by this time nineteen-twentieths of the
amount had been paid. 1t would, therefore,
be now very difficult to select from the whole
capital of $50, O000 900 the precise SIS, 526, $50
sgainst the payment of which the company
has been enjoined. When a dividend has
been declared, specific day for its payment
ia mentioned for the convenience of
bookkeeping, but it had yet 10 be learned
that there was any. law to prevent money be-
ing paid al once, if convenient, soon it
had been declared. The declaration of
dividend sets aside certain portion of the
surplus earnings to be paid to the stock
holders, and, when SO declared, cannot be
used in any other way by the company, but
belongs to the individual stockholders. Its
payment to them, therefore, is only placing
In their hands what ia legitimately their
own, and if a specific day is mentioned, the
object is TO fix the time by which the money
shall be SO transferred, but does not compel
the company TO hold it in their hands until
that specified period. The payment of divi-
dends in advance of specified day is, there.
fore, nothing new, as can be easily shown in
court il necessary"
The Post rtIerripg 10 the decision, says:
"The granting of the injunction by The
Court to-day against the payment of the
dividend on tbs Sis, 525, $50 additional CAPT
tai stock issued TO the original holders
of Western Union Telegraph stock at the
time of the consolida ion with the American
Union Telegraph and Atlantic and Pacific
does not seem TO stfec: the market prices Of
the preseDtstock."
Upon the same subject the Mol and Err
press SAYS: "The question arises as to how a
court can restrain the payment of a diyi-
dend which has already been paid, or how
illegally Issued stock can be singled out for
refusal to transfer. In other words, it is
thought the iDjunctions will amount 10 little
except so far as they add to existing compl-
c atoms"