The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-02-12
THAT VAPORIZED STOCK
STREET-RAILROAD ARGUMENT IN
THE FEDERAL COURT.
Judge Baker Wants tn Hear the Full
est Statements Even il Ii Takes
81 Week.

The case of r. Dwight Church and others
against the Citizens Street-railroad Com
pany and others, in which the plaintiffs
seek the cancellation of 100000 worth OF
'vaporized" stock and the appointment Of
a receiver TO take charge of the affairs of
the defendant company, was argued before
Judge Baker. of the United States Circuit
Court yesterday. The argument came up
on demurrer to the amended bill of COM
plant filed by the plaintiff. The amended
bill was required by the court in order that
the plaintiff might set forth complete list
of stockholders of the company and make
those resident in Indiana parties to the
suit. The latter are Sterling r. Holt, W.
j. Holiday. Henry Jameson, Newton Todd
George j. Marott and Stanley Igoe. The
argument was not concluded yesterday
Judge Baker stated that he would be glad
TO hear the fullest statement of the case
on both sides. ii it required the remainder
OF the week. After the work of the day
was over, Lew Wallace, jr, said he was
prepared to remain with the court until he
received a ruling in his favor or was told
to get out. 1t may, therefore, be several
days before the argument is finished
Mr.. Winter opened the argument yes
terday for the defendant. He maintained
that the court had no Jurisdiction in the
case. In the first place, he argued that
the acts alleged to be fraudulent were
committed before Church & Co. be
came stockholders. In the second place.
he said the relief of the plaintiffs should
have been sought through the company it
self. Before a suit in equity could hold it
must be shown that the plaintiffs have ex-
hausted all means of relief through the
bat hp
petrated fraud in increasing the capital
stock of the corporation from S1.50O,OCO to
So .OOO,'' said Mr.. Winter, land it is yet
clearly the plaintiffs duty TO bring about
an action of the stockholders of the COM
pany to Dust those directors and correct
the wrong they did. There is no allega-
ton that there was any such action. On
the contrary, it is shown that the plaintiffs
were furnished with list of the share
holders of the company before this action
was begun Ii is shown that at meet
when the plaintiffs should have been pres
ent 10 require the election OF new of1cers-
that they failed to make any motion or to
take any action looking TO a remedy Tor
the frauds alleged.
RELIEF IN THE COMPANY.
Suppose we concede.' said he, that the
plaintiffs did not know at that time that
there was anything wrong, there has been
plenty of time for called meeting or the
stockholders. The relief is primarily in the
company and should be asserted there. We
submit to the court. further. that a stock
holder of corporation cannot maintain a
suit for a receivership as a primary rem
edy. 1t is no remedy itself and must be
accessory to some action at law. 1t Is not
an original proposition. There must be a
cause of action stated in bill of COM
plaint independent of the application for the
appointment of receiver. Such cause
is not here. The only cause OF action hes
within the corporation itself"
Mr. Winter argued that the Dill was Dad
because il had too many objects 10 ac-
complish. In one case II seeks 10 cancer
a mart of the stock and in another II seeks
to create a receivership. the latter not De-
nected so far as court OF equity Is con-
cerned with the former a part OF the
time the complaint seemed 10 go on the
theory that individual members or the COM
pany had been injured.
Mr.. Wallace said that the plaintiffs the
ory was that they had stock which came
into their possession through the deceltIul
methods practiced by the company. which
stock was the product OF the mlSdeedS OF
the directors of the company. lie SAID II
was necessary for the plaintiffs. as honest
men, TO repudiate all such stock. The
plaintiffs asked the cancellation of 40 of
their 200 shares, this in order that they
might be able to go into court with clean
hands with none of the corruption at
tached to them. Mr.. Wallace started TO
say that he did not intend to argue the case
at length, as he supposed the court was
pretty well advised in the case. when he
was interrupted by the court.
THE COURTS INSTINCT.