The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1897-01-16
A, v, FOSTER HAS
WON HIS FIGHT
Sidney V. Smith Not a Di-
rector of the S. F. and
N. P. Railway.
Outcome of the Hot Fight Made
for the Control of the
Company.
Decision Of the Supreme Court Over
turning the Findings of Judge
Angelotti.

President a. W. Foster OF the San Fran
cisco and North Pacific Railway Company
has won his fight in the Supreme Court in
the case of Smith and others against the
company. The court handed down de-
cision of great length yesterday, reversing
the order by Judge Angelotti OF Marin
County DENYING a new trial. The whole
history of the contention made by Sidney
V. Smith and others was gone into. Inc
court found that the stock held in the
names of Sidney V. Smith, A. W. Foster
and Andrew Markham had. been pooled
for five years; that the stock-poollng
agreement was not unlawful; that the
agreement between the three gentlemen
was susceptible of being used as proxy,
and that a majority of the three parties to
the agreement could vote all the stock.
The decision was not based upon tech
nicalities in any respect. 1.-THE Superior
Court erred so the decision reads, "ln
finding tina: Gundecker and Wagner were
bona-fide stockholders in the defendant
company, and also in refusing to receive
in evidence the instrument OF March II
and the evidence offered by the defendant
in connection herewith for the purpose
of sustaining the aVerments OF their
answer"
The suit grew out of struggle for the
control OF the road. An election for di-
| rectors was held at the annual meeting OF
the stockholders, February %, 1896, at
which the question of control was put to
practical test. at that meeting the votes
offered by Sidney V. Smith, Peter Gun
decker and &. E. Wagner were rejected.
A. w. Foster and Andrew Markham voted
the AZ 900 shares, which had been part OF
the estate of James M. Donahue. The re-
suit was that when the votes were counted
Sidney V. Smith was not one OF the de-
clared directors-elect. Those who were
declared elected were: Antoine Borel, A.
w. Foster, Andrew Markham, z. n. Lilien-
thai, George A. Newhall, James B. Stetson
and John L. Howard.
The votes of Peter Gundecker and q. b.
Wagner were rejected, as we'll as Sidney
V. Smiths. The reasons assigned were
that Gundecker aud Wagner were
not bona-fide stockholders, and that
Smith, by virtue or his agreement with
Foster and Markham, had pooled the
stocks held in their names on the books
for a period of five years, to be voted as
unit during that period, and that 1t was
cast by Foster and Markham in pursu-
ance or that agreement. Ii the votes thus
cast had be n received Smith would have
been elected director instead Of Lilien-
thai.
Judge Angelotti found, in the suit
which was brought subsequent to the
election of directors, to have Smith de-
clared a director instead of LilleEthal,
that both Gundecker and Wagner were
bona-fde stockholders and that their
votes should have been received; also
! that the agreem ent to which Smith was
party with Foster and Markham did not
preclude Smith voting the stock standing
| in his name as he might choose. Judg-
ment was therefore rendered by Judge
Angelotti that Lilienthal had not been
chosen as director and was not entitled
/ to exercise the office; also that Smith had
| been chosen and was entitled TO be recog-
! nized as a director.
A motion for new trial was made,
which was denied by Judge Angelotti.
| The status of the Smith, Wagner and
Gundecker stock was discussed fully by
the Supreme Court yesterday. 1--WE are
! very clear SO reads the opinion, ''that
! one in whose name stock has been regis
tered upon the books OF the corporation,
but who has never had any interest in the
| stock and is only u dummy for the real
| owner, and when the Object of such regis
7 tration was for the admitted purpose of
! enabling the real owner to avoid certain
| statutory liza bilities, whether said purpose
(! would be effectual or not Is not bona
! fde stockh older and should not be allowed
to vote at an election
Concerning the Smith stock the court
| found, in addition to the fact that the
agreement must be held as a proxy. that
the agreement could not be considered
illegal 6v reason of being in restraint of
trade, nor illegal or against public policy
to separate the voting power of the stock
from its ownership.
Underlying the contest over the election
OF directors was the question of consoIida.
ton with the North Pacific Coast. To
this the Foster party was opposed.