St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1884-03-28
VANDERBILT VS.. PORTER.
Vanderbilt and Depew Respond to III.
III. POrter's Letter of Yes
terday.
An Attorneys Opinion that the Omaha Com
pany Has Good Case Against
Porter and Associates.
That the Company Can Require Them to
Account For Six Thousand
Nine Hundred Shares
ofPreferred Stock.

New YORK, March 27.-The following
statement was given out to-day for pubica-
tion
William K Vanderbilt and Chauncey M.
Depew, were asked what answer they would
make to the reply of H. II. Porter, to their
letter to himself, David Dows and Roswell P.
Flower. in reference to the alleged wrongful
issue and appropriation of portion OF the
preferred stock of the Chicago, st. Paul &
Minneapolis Railway company This state
ment is as follows: Their letter
to Dows, Flower and Porter
was purely business matter relat-
Ing to the affairs of the Chicago, st. Paul
MINNEAPOLIS d Omaha Railway company.
Harvey Kennedy brought suit against these
parties for his share, as a partner, in certain
stocks and the proceeds of the sale OF certain
stocks of the st. Paul, Minneapolis u Omaha
Railway company. The case was tried on tnis
AS the Northwestern company is large
owner of the Omaha stock, Austin j. Fox
was retained to care for any interest it might
have in tle action. From the testimony Of
Porter, Dows and Flowe-, and the opinion of
judge Van Worst Fox advised the Omaha
company it had a good cause of
dSdlHSG IiiCSC 90 ~AAi ~
the unauthorized issue and the distribution
Of G. $50 shares of preferred stock of Chicago,
ST. Paul g. Minneapolis Railway company.
Thereupon the executive committee of the
Omaha directory appointed Vanderbilt and
Depew a committee to examine into the
right of the company and take such action
as might be necessary to protect its interests.
After careful examination the committee
came to the same conclusion as had Fox.
They then submitted the whole matter TO ex-
Judge Comstock, who rendered the
following opinion: sI have examined
professionally, into the facts connected with
the issue of $3.50 shares Of preferred stock
of the Chicago, St. Paul, Minneapolis "
Omaha Railway company in the year 1868,
bv H. II. Porter, president, and some of his
associate directors to themselves and Others.
The entire ira nsactiou appears to have been
the subject Of recent Investigation IL Il suit
in the supreme court Of New York. Porter,
and the other directors referred to, were cX-
amined in that suit, and the facts were
found and passed upon by the judge who
tried the case. From the data
furnished I conclude the $3.50
shares of stock equal to S69S, 600
par value, were issued without any considern-
ton being paid to the railway company, and
were appropriated, the greater portion by
Porter, some other portions by his associate
directors referred to, and soile smaller por-
tions to other persons. As directors, they
were in the relation of trustees for the man
agement and protection Of tie corporate es-
tate and as such, were bound to protect it
against the issuance Of any obligation
or stock which might bring a cnarge
upon it, unless the issues were made under
due authority, and for due consideration.
They were certainly bound to abstain from
dealings in their own favor, which they could
not permit in fayorof any one else. They
are, therefore, liable to account with their
company, in respect to the $3.50 shares Of
preferred stock, so issued and appropriated
Vanderbilt and Depew, not wishing to do
any injustice to these gentlemen in so
grave a matter, sent them letter, published
in all the morning papers by Mr.. Porter, in
the hope, that by satisfactory explanations
the litigation might be avoided. Their only
duty and purpose was, to protect the interest
of the company for which they were acting
Mr.. Porter answered them first, through the
newspapers, his letter reaching the person
to whom it was addressed, after its
publication. This reply brings in matters
relating to w. H. Vanderbilt, the Rock Island
election and other irrelevant subjects, but
furnishes no reply to the serious inquiry, un-
der what authorization, and for what consid-
Grafton, $3.50 shares of preferred stock OF
the company of which he was president, were
issued and distributed to himself and others.