The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-02-21

Judge Hiles yesterday delivered an
opinion and Judgment in the suit oil
7 NJ. Stout and other stockholders OF
tbe New American Natural Gas and
Fnel against the New Amer
lean Natural Gas and u
and the board of directors OF the sald
company for an injunction
the directors from levying and collect
mo an assessment of 2 cents per share
an tbe capital stock of the company
Tor the reason that the assessment, as
is alleged, was not needed anu was
levied by the directors for the pun.
nose of depreciating the stock so tnal
they could buy it themselves at d hs-
ure greatly below its value.
THE OPINION.
The opinion of Judge Hiles granting a
temporary injunction is as follows:
In this case the plaintlffs move 5oi
a temporary injunction to restrain ue-
PENDANT directors of a corporation from
collecting an assessment of 2 cents per
char re- which was levied on the atm OF
December. 1896. The plaintiffs allege
several grounds for an injunction put
on the hearing none OF them were sus-
tanned except the allegation lndt d
former assessment of the 18th OF sep
TENDER. 1896. had not been collected
and that the powers OF the corporalioh
had not peer exhausted in collecting
il. and that its collection had no been
enioined.
1t appears from the pleadings ana
evidence that a suit is endlng IN lnls
court TO enioin the collection of the
assessment of Sept. %. 1896 Such suit
was commenced on the 10th OF NoVeH.
Der. 1896, and thereupon the judge OF
this court issued a restraining order
till the matter of issuing an injunction
could be heard; but no further pro-
ceedings has been had IN tnat case;
The general question here is Whetner
such an order is a proceeding by winch
the collection of an assessment can De
said to be enjoined within the mean
ing of subdivision 2 of section 900,
compiled laws of Utah of 1888. II II ne
not, then the collection of the assess
ment of Dec. 4, 1885,, is against the
statute. which provides that an as
sessment is not valid whilst a former
assessment is uncollected, or the pow
ers of the corporation IN It's colleclloh
have not been exhausted, unless the
collection of such former assessment
has been enjoined.
RESTRAINING ORDER NOT Exc
CUTED.
I am of the opinion. and so decide,
that a restraining order is not such an
Injunction as is effectual to enJoln an
assessment so hat IL may De said 70
be ''enjoined'' within the meaning o.
the statute; but that the statute
means that the collection OF LHe rs
sessment must have been enjoined by
a writ of injunction after a hearing
thereupon pending the litigation or
p~erpetuaily, as the case may pc IL
was said uDon the argument ina IN
asmuch as the assessment OF sept 20,
1896. was rescinded by the board OF
directors by their resolution of Dec. 4,
1896 that there is no outstanding I'M
collected assessment, but that action
taken after this suit vas COM
menced, and the restraining Orcer was
made in respect of the former assess
This presents a question Nhlcn
is not without difficulty, but I think.
in view of the who'll case, that the
here should proceed Upon a
consideration of the legal status of
the parties on the 10th of November,
1896. without reference to the resolu-
ton of rescission of Dec. 4, 1896. l have
al this decision with great re-
l~uctance, h evidence at the hearing
showing that the directors levied this
assessment in entire good faith to get
funds to pay the honest debts of the
corporation, and that in its levy all
stockholders were treated with equal
fairness. Therefore the essential JUS
tice OF the case would seem 10 require
that the directors be unhampered in
the levy and collection of assessment
for the purpose named: but / hold my
self bound by the technical require
ments of the case in applying this
h best apparent remedy against a
recurrence of such unjust results
to be in the judge or court re-
framing hereafter from issuing re-
straining orders altogether in such
cases.
In this ease for the reasons before
stated it is ordered that a temporary
Injunction issue.
OGDEN HILES,
District Judge.