The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-07-21

+brae and not more than four SHARES,
lsball be entitled to two votes, the owner
Of not less than five or more than SIN
shares TO three votes and so on, followed
by this proviso:
"provided. That no individual or:com'
many holding stock in said company shall
no entitled TO more than two hundred
votes except the State which shall be
lentitled to three hundred votes, pu'
should the State hereafter transfer any
part of it's stock, then its vote shali pe
in nronortion to what may be retained
s COMPARED with the amount now repre-
sented in said corporation. Inc otate
shall at all general meetings OF STOCK
holders be represented by an agent or
proxy appointed by the Governor, anu
such agent or proxy shall be entitleu III
the general meetings aforesaid, 10 No'e
according to the above scale on all ques-
tions. except in the election of directors
nv the individual stockholders"
| It may be noted here and may save
fine in the further discussion of TINS
case that these provisions as to scale
of voting are essential provisions in the
contract between the individual private
stockholders and the State as stockhold-
or IT contains mutual concessions as
the consideration of the contract. Inc
Stota agrees 10 the vote to be cast for
ber on the maximum of the stock and
makes nrovision for the reduction of that
vote on certain contingencies. NO pro-
vision whatever is made for an increase
of her vote or any contingency. Inc al
vantages of this contract enure to ana
are a part of the property of each STOCK
holder and each share of stock. Another
thing must be noted, the act provides that
| at each general meeting of stockholders
the State shall be represented by proxy.
The use of this imperative word render
| it necessary that a State proxy De
present at all such meetings.
This original charter with its amend
ments under the law then existing In
North Carolina were not subject to modi-
lfcation. amendment or repeal by the Leg
islature against the will of the stock
holders.
In 1897. the Legislature of North Caro-
| lima passed an act entitled "An Act to
amend an act entitled an act to incorpor-
ate the Atlantic and North Carolina
Railroad Company and the North Caro-
lima and Western Railroad Company.
This act strikes out section of the
former act quoted above, and inserts in
lieu thereof the following:
I'm all general and special meetings of
stockholders the State shall be repre-
scented by an agent or proxy appointed
by the Governor, who shall be entitled
to vote the stock of the State on all
questions arising in said meeting, except
in the election of directors by the lndi-
vidual stockholders and the presence of
the States proxy shall be necessary to
constitute a quorum i'm said meeting. All
laws and clauses of laws in conflict with
this act are repealed"
Elk vi termini this act seeks to repeal
| all provisions made as to the scale of
voting and destroys the equilibrium fixed
| in the charter. The State desiring to go
into this enterprise, invited the sub
scriptions of individuals and agreed
when 100000 of these were paid she
would put in the remainder. The rights
Of each stakeholder, and the relative
rights of the State as a shareholder to
the other shareholders were fixed at the
same time, a part of the inducement to
subscribe, surely these were fundamental.
The right of each stakeholder is secured
to him. not to be taken away or sur
rendered without his consent AS to this
complainant a large stakeholder, this act
must be imperative il he dissents, as he
does dissent thereto. Pigna Bank Of
Ohio VS.. Knoof, 16 Howard $50; Will
mington R. R. Co. VS.. Reid, 13 Wall,
254; Fry Elk. vs.. Lexington 2. Metcalf
(Ky) 314; Cook on Stockholders. Sec
tons 494, 500; Morawitz on Corporations,
section 645.
At the same session in 1897. the Legis-
lature of North Carolina passed another
act entitled "An Act to restore to the
State OF North Carolina the control and
management Of the Atlantic and North
Carolina Railroad" Strictly speaking
this is not an act amending the charter
Of this railroad company. 1t is more
in the nature of bill Of pains and
penalties. In it the State as sovereign
makes provision for the protection Of her
interests as a shareholder in q private
corporation. The act provides a speedy
mode and a special tribunal for ascer-
tanning the necessity for such protection,
and sort of legislative execution for
the enforcement of it's conclusions. The
first section of this act provides that
whenever it appears to the satisfaction
OF SrONeTuOT, luttI Tic piOAy uiiSNeoA'
heretofore or hereinafter appointed to
represent the interest of the State in this
railroad company, have been in any par
Iticular, unfaithful or negligent in the dis
charge Of their duties to the State or
have done or suffered any act to be done
by the stockholders or directors in said
company, the intent. purpose or effect
Of which was to lessen or impair the
rights Of the State as majority stock
holder in the company, given either by
Its charter Of bylaws, or deprive or take
away it's rights Of control through the
board OF directors in the management OF
lcontrol of the company, or If the Gov
ernor becomes satisfied that having sc
acted negligently and unfadthfully, the
said proxy or said directors shall continue
lin said dereliction Of duty, it is made thu
, duty OF the Governor and the Board OIL
Internal Improvements forthwith TO re
move said proxy and directors and up
lnoint Others in their stead who shall a.