The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1900-06-18
TROLLEY SUIT.
Fight for a New Haven
Street Railroad In
Chancery.
PROMINENT LAWYERS IN CASE
Court Asked to Enforce Con-
tract for Sale of a valu-
able Line.

There was a most distinguished array of
out of town counsel in the Court of Chan
cery this morning when Vice Chancellor
Stevens called the case of Israel A. Kelsey
against the New England Street Railway
Company. First there was "Blue-Eyed
Billie from Buffalo," as they used to call
William F. Sheehan when he was Lieu
tenant Governor of New York Associated
with him were Randall Morgan, of the
Pennsylvania bar, and Samuel Morehouse
and Henry Collins of the Connecticut bar
Associated with these gentlemen were
Flavel MCGEE, of this city, and opposed
to them was Charles Corbin. The ques-
ton at issue between them was small
matter of 1854 shares of the Winchester
Avenue Street Railway Company of New
Haven, Conn.,, value at $S60,792
Israel A. Kelsey, of New Haven, the
complainant, in his bill sets forth that on
October 10, 1899, the New England Street
Railway Company, corporation, created
under the laws of New Jersey, owned
1884 shares at the par value of $25 a
share, of the Winchester Avenue Street
Railroad Company of New Haven. On
November 9, 1899, at a meeting of the di-
rectors of the company, a committee con-
sisting of Edward c. Floyd, George Films
and Austin Mitchell, was appointed to sell
the stock of the Winchester Avenue Com
pany.
In January, 1900, Mr.. Mitchell, of this
committee, had a conversation in regard
to the stock and Kelsey took an option
upon it at S4S per share, paying $500 down
to bind the bargain. At a subsequent
meeting of the directors a resolution was
adopted authorizing the committee to ac-
cept any offer for the purchase of the
stock which was for the advantage of the
stockholders and to make agreement for
the sale.
On March g. of the same year, the di-
rectors gave their written assent to the
sale to Kelsey and a contract was drawn
up giving Kelsey the option. This contract
was not satisfactory and another was
drawn up a. day or two afterward and
signed. This provided that Kelsey
should purchase the stock at s4S per
April 10, and the balance of sS10,792 on or
before June 8, 1900. If the balance was
not paid on June 9 the deal was to be
(
April 9, Kelsey paid $4,000, the first pay
ment required to the New Haven Trust
Company. the institution which the New
England Street Railway Company desig-
mated as a depository for the funds
According to the agreement the stock
was to be turned over to the same trust
company which was to transfer it to KEEL
sey, where he had paid the purchase
money. Abut the middle of April Kelsey
heard that George A. Fenneld & Co., of
Boston, had offered higher price than
he for the stock and the dierectors did not
propose to keep their contract with him
They alleged that there could be no sale
of the stock unless 1t was approved by a
two-thirds vote of the stockholders A
melting of the stockholders to pass upon
the sale was held on April % in the office
of the company in this city, and Kelseys
offer was refused.
Mr.. Kelsey claims that at this meeting
one o. E. Williams, a member of the firm
of George Fernald & Co., voted q, 463
shares or more than half of the stock
Mr. Kelsey then obtained from Chancel-
lor Magic an order requiring tn New Eng
land Street Railway Company to show
cause why its hould not keep it's agree
ment with Kelsey and sci him the stock
The order was accompanied with an or
der restraining the company from dispos-
ing of the stock pending the suit.
The matter came up this morning on
the return of the order to show cause.
In opening the case to the court Mr.. Nc
Gee said that on June 9, Mr.. Kelsey ten
dered to the New England Street Rail-
way Company at its office in this city
and at the New Haven Trust Company
| sS10792 in current bills, the balance of
his purchase price and that the tender
was refused.
Mr.. Corbin read the answer, the main
point of which was that the resolution of
| the directors authorizing the sale to Kel-
| sey was illegal and not binding. and that
| the stock could be sold only on a vote of
| two-thirds of the stockholders.
| 1t also claims that the agreement of
| April 29, 1900, for the sale of the stock to
| Kelsey is illegal and void, and that it con-
tains proviso for the personal benefit
of Messrs. Mitchell Elms and Floyd, not
withstanding the fact that they were act
| ing as a committee for the directors. The
| case was still on when Court adjourned.
A Remarkable Scholar.