New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-03-01
THE COURTS.

THE ISSUE OF WESTERN UNION STOCK.
JUDGE INGRAHAM DENIES THE MOTION TO CON
T1NUE THE INJUNCTION IN THE WILLIAMS SUIT.
Judge Ingraham yesterday. i'll the supreme
Court Chambers rendered decision in which ne denies
the motion TO the temporary Injunction recently
obtained by William S. Williams restraining the western
Union Telegraph Company from allowing any OF the
800 of stock Of the company to be transferred
on its books which the courts alleged to have hed 10
have been illegally issued the ground that u was
issued to represent the surplus earnings OF the western
Union Company Judge Ingraham says, III his OPINION,
that the first thing determine ia what the denera
Term actually decided in regard to the Sl5,OO0OOO OF
stock The General Term, as he understood It, decded
that the increase of the capital stock or the western
Union Company TO $4,000 900 was legal but that the
dis ribut.on OF the $l5,000OO0 OF STOCK among tho
shareholders Of the company was Illegal Inc
Sl5.OOOO0O Of stock ought to have remained In the
treasury of the company part of its assets ana cond
only have been parted with for value. Between the
Judgment of the Special Term and that of the General
Term the greater part OF the Sl500O0OO OF stock had
been transferred to innocent purch ses by the persons
to whom it had been originally Issued. On TINS
state OF facts IL is still undetermined what
relief the plaintiff will in the end be entitled
TO- and this question must be Determined
In the plaintiffs favor tho effect that the Sl5OOOOOO
must delivered up and cancelled before he can be en-
titled to injunction restraining the transfer OF TINS
stock on the books o. the company. III tne plalhun
should obtain Judgment that the directors pay to the
Western Union Company the par value Of the stock
which has been Illegally distributed among its share
holders without consideration. then 1t would be unfair
not TO allow the company 10 trta the stock so distlb
uted valid stock and q err fore, stock winch may
properly be transferred on its hooks:
Judge Ingraham declares that the directors or Tue
Western Union ComDany must he cOnsioeIed under we
statute az liable TO the company Tor ihe iul par Naue OF
the stock II have distributed II without cOnsldfra
ton This liability ~ imposed by the statute "a pen
atty for violating the statute which provdes IN tne
sfGck OF corporation shall not be Issued except Tor
value IL Is the moment tine stock IL issued ~
violation tie statute. Tn" directors owe the company
the amount the stock. and the stock sel becomes
valid stock. IT, therefore, the pantn should succeed
IN his action the directors must be aduged 10 owe tue
Western Union Com lany $4,000 600, and the STOCK
which they had wrOngfuly distributed would be re-
earded as fully paid and therefore vald STOCK ne
statute provides penalty for the wrongful act OF as
tribnting stock without consideration and that
penalty is the only one that the pl IN
tf or the company can recover IN th's
action II the stock distributed IN vioaunn
of the plaintiff must be confined TO his rene
for tic illegal that the statute gves which ~ IT me
directors pay the Of the stock 40 Illegally d@-
tributed to the company IL thus appearing that me
plaintiff would be entitled 10 JUDGMENT canoelng
HE stock Illegally issued II would not be prop Tor me
Court 10 grant preliminary Injunction resrtuln inc
transfsr OF the stock ng the pepdency OF the action
not before the declare the stock issued invalid,
as il appeared that large portion OIL had been tans
ferred innocent purchasers who are not parties 10 inc
cflO