New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-05-06
THE COURTS.
THE TELEGRAPH CONSOLIDATION.
ARGUMENT on THE APPEAL IN RUFUS HATCH SUI
HEARD BY TIE GENERAL TERM OF THE sUPERloi

ARGUMENT on THE APPEAL IN RUFUS HATCHs SUIT
HEARD by TIE GENERAL TERM OF THE SUPERIOR
COURT.
The argument on the appeal from the de-
cson OF Judge in the injunction suit brought by
Rufus Hatch against the Western Union Telegraph
Company and others TO restrain the execution OF
the consolidation agreement entered into by
the Western Union the American Union and the Atlantic
and Pacific Telegraph Companies on January w. 1881
was had yesterday before Judges Friedman Arnoux ana
RUSSELL sitting in the General Term OF the superior
Court The argument for Mr. Hatch, the appellant was
opened by Aaron T. Whitehead, who made BRIEF state
ment OF the facts in the case and OF the PROPOSE
tions OF law upon which the counsel on his
side would rely. Mr.. Whitehead enumerated twenty
two propositions OF law the why the decision OF
Judge TrIlax upholdng the consolidation agreement
should reversed The great majority OF these propo
si,ions were brought forward in the arguments
which were had in the course OF the various
snits which were begun to restrain the consoida
ton In regard to Judge Truax's decision MI
Whitehead declared that the finding was utterly
unsupported by evidence that MI Hatch had puI-
chased "a part of his stock with knowledge thht inc
agreement OF January 10 process OF negotiation
andshe with knowledge that 1t had already peeh
made Judge Truax's decision in effect Mr. White
head said that a corporation may its capital
stock to any extent provided only that II does not c1
coed the value which the directors put upon the cor
uornie property. This doctrine, 1t was salu,
had not even sembIance OF autnoIlH
in the principles OF the law of corporations. In regard
to lie TACT that consolidation had long ago been ac
complished Mr. whitehead cited decision by the su
prce Court the United States. which held that the
swftncss corporation in Accomplishing Ia Iac some
thing which is prohibited by law Is only an additional
why the unlawful act should he undone ny the
court In order show proper resentment Oh
the defiance Of the law by the cor
poration Mr.. Whitehead particularly insisted
that the Sl5,OOO,OOO of stock issued by the western
Union Company represent its alleged surplus earnings
was not only Illegal had been decided by ChefJud
Sedyck aud Judge Sp.cr but also that, TINS Issue OF
stock being Illegal, the consideration OF the c0nsod
ton agreement great part JAILED and with me aSree
ment itself. Robert Seweli followed Mr.. whitehead
Elaborated the argument II had been sketched ny
the latter. -. 49,.
The argument on the part OF the defendants was
opened by WAGER Swayne who insisted IN the beginning
that Mr.. Hatch had standing in Court OF Equity 80
far he considered court or conscience
In such a court Hatch only III To be spurned
As lar as the consolidation OF the companies Itself was
concerned hal been effected with the most scrupuOus
regard to every fOrmIy or tcchucaty OF the statutes
10 support validity OF the Increase or the captal
stock of the Western Union Company, General SWayhc
declared be able proposition OF law that
CORPORATION could ts capital stock To any eA
tent provided the increased stock Ior
dollar money property i'll the possession OF the corpora
tiOn which had either been originally contributed 70 Tue
corporate enterprise had been PAID IN purchase OF TIE
stock held by the corporation as actually exist.
ing surplus earnings, over and above the company
original capital STOCK. A. J. Nandorpoe folio" ca Cen
cral Swayne, and then Mr. Sewc made Few REMARKS III
reply aud submitted the case to tho Court