The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1900-08-10
VICE CHANCELLoR's OPINION.
In the Suit of Mr.. Kelsey VS.. the New

| Lie OJlHlUl III lull Oh ICE SllctliNSii0A
Stevens of the chancery court of New
Jersey in the suit of Israel A. Kelsey
to compel the New England Street Rail-
way company to deliver him 1I9o4
shares of the stock of the Winchester
Avenue Railroad company upon which
he claimed to have purchased an option,
was received yesterday in this city ana
is as follows
The New England Street Railway
company, corporation organized under
the act concerning corporations, was
J formed, inter ALA, to purchase, hold,
SELL invest, trade, and deal in stocks.
/ In October, 1899 it owned 1854 shares
of stock of the Winchester Avenue
Railroad company On October g. of
/ that year the board Of directors of the
New England company passed resolu-
ton appointing a committee consisting
of the president and two other directors
I ito receive any offers that might be
made for the property The committee
opened negotiations with the complain
ant. On March &C. 1900, the board of
directors passed another resolution, as
follows:
"On motion duly recorded it was
unanimously voted that the committee
appointed at the meeting of the direc-
tors October g. 1899, be and are hereby
authorized and empowered to accept
any offers that may be made for the
stock in the Winchester Avenue Rail
read company, owned by this company
which in their Judgment are for the
best interests of all concerned and to
,+, "a
thereto as they may be advised are
necessary for the delivery of the stock
and the payment therefor. All such
agreements to be subject to ratification
by the stockholders Of the company"
On March 90 written agreement to
give complainant an option to buy the
1854 shares was made and signed by
the committee. 1t begins thus: Acting
on behalf and by the written consent
Of the directors of the New England
Street Railway Co., and appointed by
the directors for the express purpose,
we do hereby give complainant the OPP
ton to buy etc. In this agreement
nothing is said about ratification by the
stockholders.
On April the option was accepted in
writing. On April 9 the directors held
a meeting, at which, according to the
minutes, "a discussion followed upon
proposition to sell to Israel A. Kelsey
the stock of the Winchester Avenue
Railroad company, owned by this com
pany, but no formal proposition was
submitted and no action was taken"
After this meeting three of the directors
Wen to the office of Mr. Denson, a law
yer, and requested him to prepare a call
for a meeting of the stockholders to be
held on April 49, He first prepared one
which read as follows: ITO see If the
stockholders will vote to ratify, confirm
and make valid certain agreement be-
tween the directors of the company and
Israel A. Kelsey, etc, but learning that
the stock was in the Boston Safe Depos- (,
it & Trust company, and that it requir-
ed a two-thitds vote of the stockholders +
to get it out, he prepared second call,
n which the foregoing purpose was 7
stated and the further purpose of see J
ng whether the stockholders would vote
% withdraw the stock from the Boston
company. to carry out the proposed
sale. The call was issued and the
meeting held at the time 4
Indicated A majority of the stockhod- I
srs voted against the sale The reason
If this vote appears to have been that
n the interval between April and
April 90 Georpe a. Fernaid & Co, had
offered more for the stock than Mr. kel-
icy and the interest which they repre-
'ented had obtained control of the ma
GRITTY of the shares On June l the
money paid by Mr.. Kelsey on the deliv- /
Wy of the option $1,000 was rendered
Jack
The complainant prays a specific
,crformance of the contract and an in
unction restraining the sale to Fernald
I Co. am of opinion that the interloc-
ltory injunction now asked for should
,e denied. The compliments argument
8, first, that on the proper construction
f the resolution of March rs. the assent
# the stockholders was not required to
make a valid sale: second, IL such as
emit was, by the terms Of the resolution,
ecessary for the first instance, it was
" the action of the directors SUISSE
uently waived or dispensed with.
gree, that as the object for which the
ompany was formed was to buy and
ell stocks. the directors had power to ;
ell without getting the consent of the
but they could, if they ,
hose, make it a condition of any SALE
hat the stockholders should assent to
/. This they did in the present in
tance. The resolution is that the COM
littee is authorized ito accept any Of
ars and to make such agree
lents with reference thereto ii. e. to d,
he offers) as they may be advised are !
ecessary for the delivery of the stock !,
nd payment therefor; all such agree :
lents to be subject to ratificati ton by ,
ne stockholders The resolution on it's
ace plainly contemplates not merely
are acceptance of an offer, but an
greement as to delivery and payment:
UGH an agreement as may be and shall !
e submitted to the stockholders.
But delivery on the one side and pay
TENT on the other constitute the gst I
the entire transaction. 1t is said that /
le object of the clause which requires t
vote of the stockholders is only to {
leet the requirements of the former S
that the stock should not, V
ithout such vote, be taken from the /
epository to which it had been confid- | h
| but this insistment, if it be permits t
BILE to restrict the word delivery, to h
elvery by the trust company is mega G
we'd by the insertion of the word pay /
ent" IT seems to me plain that rati- r
cation by the stockholders was under o