Seattle daily post-intelligencer. [volume] (Seattle, W.T. [Wash.]) 1881-1888, 1883-11-23
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POST MTELLIGENCER
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A DECISION rendered reeeatly By the
Supreme Court Of Nov Hampshire re-
spectiue the powers of directors in rail
road corporations. strikes at tue root Of
su abuse which has been too colnmon
IN the management of this class OF cor
v,rats bodies. The case briefly
stated was as follows: The b'~'on,
Concord and Montreal Raiiroad ana
the Northern Railroad Of New hamp-
shire. both terminating al Concord,
w.r. depsnd cut ON the Concord Rail
road for connection To the roids OH toe
south which enabled them TO re..ch Boz
ton with their traffic arrangements
BEING dissatisfied with the terns OF
tl,eir contracts with this connecting
link between Concord and Nashua, TIE
presidents of the two northern roads,
with other persons whom they secured
in their interest, bought majority OF
the stock Of the Concord road, and got
themselves elected on its board OF
directors, which they thereafter coz
troIled. They then, being practically
dealing with themselves, not only sac
rificed the interests Of the stockholders
in the Concord road. by making ar
raneements inimical to its interests,
but presented certain heavy claims
against that corporation and had them
paid. Suit was brought by one OF the
minority stockholders Of the Concord
road 70 have the contracts made by its
bo lrd Of directors set aside, 70 have The
directors whose interests were adverse
10 those of the company by reason of
their connection with the other COM
paniss removed or suspended, and to
have suitable person or persons APP
pointed TO act in behalf of the Concord
road in all matters where those direct
ors we're disqualified from acting Oh ac-
count of their adverse interests.
The Court its decision held that these
directors were disqualified. IL laid
down az the law that a director of a
railroad corporation stands in a fidu-
ciary relation TO the corporation. and Is
under the disability of trustee. de
cannot buy of himself, sell to himself,
contract with himself, or secure advan-
tages to himself not common to other
stockholders, and that this position ap-
plies 10 directors Of one corporation who
are also directors Of another and acting
in its interest. The Court farther held
IL immaterial whether the contracts
made between the Concord road and
the northern roads we're just and mutu-
ally advantageous or not, the same men
acting a. directors for both parties had
no right to make them at oil. Their in
terests az directors of the northern
roads were hostile to those Of the Con-
cord road, aud that fact disqualified
them from actings Referring to the
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