Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1898-09-14
A LENGTHY OPINION.
JUDGE sIMoNrON RENDERS ONE IN
CASE OF sEABoARD AIRLINE.
REVIEW OF The CHARGES PREFERRED
The Eminent Jurist Gives an Ex-
haustlve Recital of the Matter
Under Adjucation and Disposes of
the Case Mt Length.

The opinion OF Judge Simonton IN the
case of Thomas F. Ryan against the Sea-
board and Roanoke Railroad Company
and others, was rendered yesterday morn
ing This. cause, which has attracted
widespread attention, more particularly
In railroad circles, was argued in the
United States Circuit Court at Ashevlle,
on the 10th of August last. The com
plainant. Thomas f. Ryan, a citizen Of
the State Of New York, filed his bill of
complaint against the Seaboard aud
Roanoke Railroad Company, and Leigh
r. Watts, citizens Of the State OF Vir-
GINA; the Raleigh and CASTOR Railroad
Company, a citizen of the State OF North
Carolina, and Messrs. Hoffman, McLane.
Minis. and Fisher. citizens Of the State OF
Maryland.
The bill Is by a stakeholder in the first
named corporation, in behalf OF himself
and other stockholders. After stating
what is the Seaboard and Roanoke Rail-
road Company. it AYERS that it is in the
control of eight subordinate railroad
companies. constituting with it a system,
designated by the style of the seaboard
corporations, the Raleigh and Castor
Railroad Company, il owns a majority OF
stock therein, and absolutely controls the
election Of it's directors and other Off
GERS, and its operations, policy, and In
come.
NO DIVIDENDS UNDER HOFFMAN.
The affairs of this seaboard and Roa-
noke Railroad Company are managed by
president and six directors, elected by
the persons in whose names shares OF
stock stand on the books Of the com
pany, according to a graduated scale OF
voting, whereby smaller stockholders
have a much greater vote, in proportion
10 their holdings, than larger stock
holders. That the annual meeting Of the
company, at which the stockholders
elected the president and directors was
approaching That at the last meeting
the defendant, Hoffman, had been elected
president, and Messrs. Mclane, Fisher,
and Watts, with Moncure ID. Robinson,
Fuller and Gordon, directors, of whom
Robinson had died. That Hoffman had
been continuously president since 1872,
owning S20.S0O Of stock, and that since
his election no dividends had been de-
cared. although this had not been the
! case with his predecessors. That he
controlled the elections by the dse Of
proxies, which his position enabled him
| to solicit and obtain. That Messrs.
| Watts. McLane, and Robinson had been
directors continuously during the presi-
| dency of Hoffman, McI.ane being rela-
! tive and occupying the same office room
| with him. Robinson being the owner OF an
/ unremunerative branch railroad. which
! he desired to lease to the Seaboard
system at an exorbitant rental, and
| in which purpose he had succeeded, and
Mr.. Watts being the general counsel
| Of the system and president OF bank
| in which II made a goodly part OF It's
| deposits The bill further charged THAI
| President Hoffman was in the receipt
| of large salaries from divers roads IN
! the system. That he was a member Of
the firm of r. C. Hoffman & Co.. n firm
with no stock or material on hand, but
which was the purchasing and selling
agent of the system.
LARGE PURCHASES MADE.
In October, 1896, large purchases Of
| stock of the Seaboard and Roanoke Com
pany had been made which threatened
| a change in the election of directors,
! and that Messrs. Hoffmans McLane, Ro-
! binson, and Watts, in order TO perpetu-
ate the control they heretofore had In
! this system. devised a plan for pooling
| the stock. To this end n pooling agree
| ment was prepared and circulated among
| the stockholders whereby the signers
| agreed for five years not to sell or dispose
| of their stock, or to delegate the voting
power thereof to any person other than
| these three directors. without the writ
! ten consent of three fourths Of the aggre-
| gate shares Of the signers of this agree
ment. and further authorizing these d.
fGp a
| the sieners of the agreement who should
not be present in person at any meeting
! of the company That this pooling agree
ment was signed by persons holding SSZl
| shares: but that Louis McLane, chairman
| OF the Pooling Committee. with the pur-
pose of preventing any concert OF action
| with them, has refused TO give COM
| plainant the names Of the subscribers.
The bill sets forth that McL4ane secured
possession of stock by unfair methods,
and then charges that this pooling
| agreement Is revocable by each signing,
| in so far as IL delegates authority TO vote.
! That If it be attempted to be made bind
! ing IL is contrary to public policy. and is
void fer many reasons stated. Ihat II II
ever was valid. it has been abrogated and
determined. because Messrs. Hoffman,
! McIane. and Watts negotiated secret
| arrangements with persons holding 2'WO
| shares of stock, who were in the pool and
were dissatisfied, whereby their stock was
| purchased. without the consent of -hree-
| fourths of the signers. That this pur-
| chase was made in the name of the RAJ
| leigh and CASTOR Railroad Company, with
money of the Seaboard and Roanoke
| company. That Notwithstanding this pur-
chase. the names Of the vendors still ap-
near on the books Of the company as
! stockholders and that the stock Will be
voted i'm their several names, thus yio-
| lating the provision of the charter as 10
| the graduated vote or stock. That all ell
! forts Of complainant TO examine the
books of the company, so as TO verify
| this fact. have been refused and frus-
trated by the treasurer Of the company.
| Resides this. the bill charges that there
are some coo shares held by citizens OF
New York. associates of complainant, and
| that Hoffman and his associates have re-
Gently obtained an injunction out Of the
| Circuit Court of the city Of Portsmouth,
restraining them from voting.
NOT COMPLAINANTS FAULT.
First as to the motion TO dismiss under
Rule SO: The omission TO observe the
| rule was not the default OF complainant
| II must be imputed to his counsel. As
-, as Mr.. Crawford retired he at once
emnloyed MIR. Root, and he in turn. with
| ont DELAY. engaged local counsel. both in
Maryland and Virginia. These gentlemen
| have explained their delay. This rule
uras intended as a stimulant to parties 10
Deadly 00nn0r