New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-02-04
RAILWAY LITIGATION.
TROUBLES OF THE ELEVATED ROADS.

Railway
pauy. The Special Term, on June 20, 1892 made
order continuing injunction restraining
Jacob Berry and all other stockholders OF the
Metropolitan Com any from bringingan actions against
the Manhattan Company TO have the consolidation
agreement OF October %, IS l. SET aside Illegal The
restrained the stockholders from bringing any
actions against the Metropolitan Company on account
OF this agreement On December IA, 1892 the Special
Term made an order continuing injunction restrain
ing the Metropolitan Company from issuing any ceriif-
Gates OF stock bearing be memorandum that the Man
haitian Company hal agreed 10 pay 70 the metropolitan
Company annual sum equal to 10 per cent on the
capital stock Of the latter company The General Term
holds that both the Of Justice DOnOhuc must be
reversed The opinion Is wrted by Justice Macomher,
and Justices Davis and Daniels concur The following
IA the substance Of the opinion:
The general question is whether there exists any good
reason for the COur 70 restrain TIC ndFidna defend-
arts and the Metropolitan Elevated Railway Company
from challenging through such judicial proceedings "a
they may adopt the validity Of the agreement OF Qcto-
Der %, 1881. Up July, 1881, the plaintiff and the
two defendant corporations had been operating the sew
entered into by them May 30, 1879, which had been
authorized and aferward ratified by the stockholders OF
the Metropolitan Elevated Railway Company, and the
81 ncsce Rv t5s fepTs Of me eontrar n. We'll a.
nv p TSe eose from the Merspotan Company Of
It's railways TO the plsmtif TIE plaintiff among other
dividend of 10 per cent the capital sooA u
the hitter to the amount ~ $6500O00 free q" al taxes
the subst,nce Of which guarantee was TO printed
engraved upon the stock certificate Of the Metropolitan
| Company on the l4th day Of July. 1881 az action
brought by tie Attoucyeneral against tie hauhattan
Railway ComDany. all the prouerty Of that company was
b. order of our put INTO the hands Of two ioat reeey-
from exercising It's functions or operating urder
| it's franchises. - ~
The directors Of he three corporations, without tie
consent at least Of the stockholders the Metropolitan
Company, subsequently made the agreement Of Oo'QVer
% 1881 by which, the old ayTecment was modified ny
reducing the dividends per cent per annum and by
which the Metropolitan Company was suOordnated 70
the York Company anawas to receive no qlydep4s
until the latter had received its per ceet u iu tr
every year. deficiency II 10 be made up me
next year If necessary, ana whtrey the PdinItt |sS
released from $4,000 Of back dividends due the Metro
p0au Company, bu such hack dividends were paid 20
pettioned the Coart restore to the paintih ia prop
erty, which acoordinely done % November H.
1851 further areenent was made Dy "a Infee ooiPt
MES acting ouy THROUGH heir hoarS ~ dlrrc 20 IL
IA disclosed by tho proofs. whereby tie r0chhoiers OF
the two defendant companies were allowed 10 "A hanec
their sock for equal amount Of te ,ioek of !1e PLAIN
TN the stock the tcWl tOupany 10 lie the frst
preferred H. and the holders thereof % be PAD per
cent per annn, u 10 i.' %, 'iy @ "om1aly
to be- clcl seCOud preferred sto" and 10 be subonii
bi 81 the eornnqs proved urciont Draw per cent
d't iicuds. Inc OLD took OF the Manhattan Company
amount iur TO sIS,Ooo0OJ, was dcuommaed common
so auI vas no. 10 draw dividends INT aLter the per
cent per auuum had nccn paid 10 the newborn ana 10
the metropolitan holder o. the ne| stock Of ihe hHiha
o. cm6er T. 1881, in tie case + tie Poop against
TIE Man pttn Company tie Cour ai special ern pro.
uouucei What il ftrnci ltdEmcut d. "hlcA ny way OF
recital D. proved re az CEN ni, OF Oetooer - aa
November a. ~ lns' sec eue1i oil me 1
between to pallea, and then JARED ana yucca
between TIE rec cOhpal diaic
"nOct"her -, re led 80 "a ~ 49, ~ 10
become eoid Obra ou' ween ne cor ratohs ia
tarlc hereby confirmed ant established 40 MAJ
setfi-ucut and conclusion ~ al quest ons IN this
action" She majority Of me .tocaAoIIers "i me @e a.
used ,r the result itsef ~ -cn IN contract OF May
20. I-70 ga. been aoro-ae1 "uDohi ~ + con eht
a some Il item. apparently acting for no best III
trasts 4 toe whole, Lave brought thrcc at'-s' ne
pga MT ha they lain o b tic devices oi tAr DoarS
Of Directors to def add them. -
The plaintiff well content 70 maintain we status 40
urI. tgations showing the tendency Oi sieu SUITS
tAat Ike actions mat are threaten a. pings
i lN and To- compel them 10 submit all tneir
grievances fCr adjudication II TINS suit because othe
Wise the injury TO the painun Would 90 lriepaiaD,e
having IN the meantime passed iuI0 Tie bahus OF III
sympathy VIA its s1ock1Cders @lo o9ee! 70
being bound by the agreement 0i Octooer -
supplemental il was flied upon when NE 'u JtceiIJ IN
tuuct u, mcniiOred IN clause second OF inc preliminary
statement Of this opinion vas Issued an Ons a.
thc complaint ana accoInp'hynS n.a't, Inns ~
holders OF the MotfOpoit'h Coutahy ar ~ NY
defendant. who that II Las not D'eh AH Is Hol
ouch Il 1okLold, r under sc tea contracts.
Itle rights the defendant nave oeeh INV aueu IN tne
manner all, g,d ~ them GOO offence OF the plalhtH u
merely Tue Ordinary breach oi contract Tor "h,en
tt II WRONG by which-tbiougn the ana oil boaIu OF
Directors - the d,'sndnt corporation "Hcn a. IS
tin than OF its own stocknO deIsa large portion OF TUG
STOCKHOLDERS have been drithuded IAe g'aVameh oil
the decndunts' grievance Il thai tort they nave
been deprived OF Ae b, nel- o tat anu Ndluao. con
tract. Probably II tie Injunction Wsto t1Ca'e1' ,nt
tie plaintiff upon It's original guarantee, test the Fahd-
inv of the sustouent agreements d they set up as
Irt,n.e to tic ~c.n lut the real issue In
acton would De the alleged fraud or the power Oh the
boards OF Directors contract; lOr u Is clear under me
proof now b.. ore The Court, that tho danhGtlA on
pluy rot shield IT'S OcnIhu the seal Oh '"e VI TO
p1htAn company affixed % the agreements log tIe
ron.ou that must be- charged with SHOWED tas ne
sub,cqu ~ not having The consent oi TIE
stOca NO. iers Uitrd rytS ana NuldSnl-.
tut even II IL Wcrt Ola. rwisc, tA Re would he open to
the Metropolitan Company remedy on we equy sue
81 the ,odri to 81 dSd e lA'se AH'sel,.tIs "i go
gruu DIS aud I'm suc am ucuou under tLt chAlhcu tei
uous rougl IN iHo dr'coTLp OF ne cyHp.hy e. 19
tins action vas Ur.utnt'u cchpce ".Vu'v- -, -,
De had only o. The legal ghts OF the ieioo Kan
T Hc4 a:o OIi IL, II. "s ssv1r4i neaco
h appears. ina,much as thc individual si"ckhOHels
iutoI nee, WOuld not seek 20 ORG al ACTON Tor
cac4 themselves scp"rd y tWDlcn touI" no 20 ma"
trnc No. ina the plain "a fear Of mn.t'phc,{ of
actions l. without Jus' or feasouoo' vau'e; n"e"
ills ucttcn WAC begun, HOWcytr 80 me all"'ls SNOW,
the rtctiou Of he Metropolitan Company was ~ the
hands OF tie persona representing the paihtln' ana
won d asa r. as against the ntortfs II tn plaintiff, It's
,Sr rrlr rt.ts aud those II ito stUck.ul.,r,. That
cn,if a. Ting WIS brought about by the managers
ot tue plnutt. Ne r0HoItau company oe'hg mus
unmstruut and unable As corporation t. advance II
wae natural aud rusaibe for n sockho dcrs either
an body or eparatey, TO take action III as hud thtr
own behalf 80 tho Stale Of aHI.r, by Whlch m.ul
actions could be or cted agaiurt the pianLln, was
brought about by the acts Of me p.slntln owl
mauagers II proofs before ~ ore correct ava 'uat
te plaintiff should be permitted to complain OF anu
nuke d the groundwork Of bill Of peace taxes 4ec4se
outade the gravity Will which equity principles are
wont to be discussed. 49,. -, 49,
Asde there ore from the denia which the defendants
make 10 tie cnarge ~ threatening a multiplicity 81
actions ,anu ruoh deIas taken as ruelle appears 70
lie our, that me plaintiff not N position 10 INVOKE
the mid II equi stay such litigation me ndlutica-
tiousl are uniform tnat the power OF the Court 10
r.stran purties who are aggrleNed nom ms tulAg
Their actions ought be exercised except IN extreme
aud clear cuscs. D., ,-... -.
The counsel the plaintiff makes special claim 10
the ntrposiion and protection Il tue Court Dccause as
he soys The plaintiff IS under the various agreements
not only lessee, hut agent trustee anu iWisl
manner. and he points To article 10 OF the WaHe |
,crehI the METROPOLITAN Company mace tte Manhattan
Company Ito agent and attorney 10 do any mug
sry 10 be done the complete execution 81 inc
men THIS relationship OF the parties may I'D sepsS %
taken TO BE- true. what then 10 the outcome Vi ~ &
niaiuIh entered into lease without the consent y. tn9