New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-11-07

u e. =, the western Union Company IN sne
Esnry Of the company and az snd for the benefit Of
lcd In the Thew therefore Represented and Scn
sutsd property and not %ers PSps attempted to dis
when Wy sh.t mart of its capital stock among ~. rs 0 w
pharehodeIs TithVHi Withdrawal and payment Of
9 Of the capital stock witnout tne the statute
{egisiaurs;, ~ the particular statute under consul
1,n nor In the preamble, taken as o Wno, IN the
attacna a. NE time OF the revision OF the statutes
hieh calls for different construction. 1Po "ast,on
the revision o. ' An Act to prevent fraudulent
SSehrnnffcies BY Incorporated comp;nses' .nor mr.
iate poeees nnoTopa,ed into and became integral
-, 81 fhe general hody Of law enacteo iI p What
srnme. een sSId Il sufficiently appears that what
~er value beyond par the stock OF acoilr,lns fund
have y attaches 10 the stock and forms par 10 Sa
tha rrincipal that stock dlvldthI - navment of
inc1ng' stoc, and that consequently when e.ut v
EXISTS as II does in this case Men n declared from
an no,s on hand but also division sbe
or payment Of part OF the aysend ayanle in stock
IN 1oxfly dsclared without such consen,, eHv ne
based on the Ssa1S S n SHIt been divided in cash
Y;Scr can said issue Of stock to the shaIen9urr
Of tne MeS'1 h ircnmstances of the the BoaI %,
nirertors or three-fourths OF the Counting
Together deemed 9 1Se te had in It's
ertv of sufficient value In excess o of H. CAPT
III stock 70 hold and enjoy such propetS 70 tho
Ever tr7ie II NAV be that 1t was rights
Western So ~ The American Onion and Ailanc t NJ
Pacific Telegraph Companies - mi Maid Tor by an
e NJ undilnted In no sens nv Wotc-n Union
recognize was there G aIy its stock Nor the said
1911 81 steck be upheld on the theory '. s - Western
@ defect in the articles of association 81 'S acts in
I n ComDanv and want of power uh1er vs., d want
relation 10 telegraph companies sucn cjngs of the
weIs Of shareholder under section =; OF bdle
40 of the laws of ISIS entitcu rfarturinc mining.
,nechanical and chemical purposes. ont new
srtsnlv does not permit an issue Oh stooh " and
value being returned therefor to the 1re onratiTe
conseauenty !, cannot and does hot IN. Stvi1rnds
inc Ilrrd except from surplus profits ala nm
no division. etc. OF capital stocA s"''i' -"
he consent Of the Legislature
An ILLEGAL DISTRIBUTION
Fem rho foregoing It viii be seen that notWitls'lno-
~ tho mast liberal Interpretation of the iacs no 'he
~, nberal construction Of the statutes III I'''i'
81, ACCOMMODATION and regulation Of telegraph cohpae
and the many assumptions made IN 'a'" ~ -
western Union Company and the most r-l"
- , sondnc Of the plaintiff in court enough j le'. "a
the plalnTs case 70 call for the lnterPo'i'io" VI ~
ur, an grounds affecting public interests ENehH INC
r,ntiou be continued that the property reprseh'na
the Investments OF past earnings was ie'S W 6
SI5526 $50 AMI that IN view o. tnn1 lac nv S6s OF
{oc+,on IA the agreement Will lie under cH'l ~ - ~
IL avs of $50 and that in other respects Ie
nent whole Is not IN ssscntii cr 10 which
matters express no opinion, ana Whch II Deo1 ~,
I, IN determne-yet the construction 10 oe gwen
~ ne .fatnte forbddng the declaration "I Ntl4'nS
eyoept from surplus profits ana pTuLIg'lA I
90 ~ csntal without the consent 81 me LeSslluTe
Si, a. stofed and no such consent having oeth Iou
10 eyisi the plaintiff has demonstrated ulal lhe Plu
nosed grauitos division OF l3226'9y OF sl"cH .oiE
bSrsbnIdrrs OF the Western Union Company Is Wholy
Nieral No action the part OF the directors Vi su
bolders or both combined, could overcome tuIS ul' I'M.
coi,v and as the icgality complained OF entered mo
and permeated the agreement OF Janua! ~ 80,
Inion CoWiaDg was 10 first diluted to the extent or
the proposed grauitous issue and laynenl Ior ts
property rights and franchises OF the vendor eopae
10 b made 10 the stock thus deprecated the agreement
itself cannot be sustained ,.,.o ,.,-.,e o.. q
sharebolder In the Western Union Telegraph COMPANY.
in behalf OF himself and all other snaehofs ." tnS
company similarly situated ana lhoush III l,le ri
comi,aiued of may represent Only cOiHpaidtiNcy
ipscudcant minority. he has nevertheless sulncltnt
infl1t and standing TO make it the duty Of the Court
for reasons affecting public interests, 10 entertain us
90 1nt enpro,r4ate relief The dismissal Of the com
paiu therefore constituted error As the case stood he
Plaintiff at least entitled to an adudlcauon 9e'sr
irr the legaty the agreement OF January ~ 1881:
and enjoning the distribution OF the Sl2'2zo,J9O oI
sfock How much further relief should nave been
rauted II any, especially In view OF the far-reacluhg
provisions OF the that has been violated IL is not
necessary 10 express opinion upon That Il ques-
non which NAV be best left be determined on new
trial OF course the fact that at the time OF the com
meDeement OF action the agreement had been party
executed that since the erroneous dismissal OF inc
complaint may 4se Ueen snd the majority Of the
shareholders of the Western Union Company, cauhOV
AFFECT the legal question involved. though it may have
an nportanI bearing upon the Of the relief TO be
granted The Judgment should be reversed and new
trial ordered with costs to the appellant 10 ABIDE Tue
A P whitehead and Robert Sewell appearedtor the
plaintiff. aud Messrs. swayne and Vanderpoel Tor the
defendants.
POINTS IN The HATCH SUIT.
In the suit brought by Rufus Hatch against the com
panes and their directors to restrain them from carry
Ing into effect the consolidation agreement the General
Term Of the Superior Court yesterday handed down
decision I'm which the judgment Of Judge TruaN is re-
versed and a new trial ordered Judge Trunks order
granting an allowance OF 5000 TO tht deieWiants Is
also reversed with $40 costs to add the event
The opinion Is written by Judge Freedman. The com
plant he says differs from that IN the Williams suit IN
fhu II contained allegation of fraud against the IN
divdual defendants. The complaint also contained an
additional allegation that the consolidation agreement
wa, Illegal by the laws OF Ohio and Pennsylvania and Of
The United States With these exceptions the questions
raised hy the suit the those IN the Williams
cult and should Dc disposed OF III the way