New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-04-09
| NJ. S. R. LEASE PERMITTED
JUSTICE GILDERSLEEvE DIssoLvES
THE TEMPORARY 1NJUNCTIONS.
HOLDS THAT THERE IS NO VIOLATION OF
LAW AND THAT THE DIRECTORS
ACTED IN GOOD FAITH


The temporary injunctions obtained by Harry
Content and Walter Content and by Isidor
Wormser, jr, to restrain the Metropolitan Street
Railway Company, the Interurban Street Rail-
way Company and the Metropolitan Securities
Company from entering into the arrangement
by which the Metropolitan Street Railway Com
pany's franchises and properties were to be
leased to the Interurban Street Railway Com
pany, were yesterday dissolved by Justice Gill
dersleeve in the Supreme Court.
Justice Gildersleeve also denied the applica-
ton of the Contents and Mr.. Wornser to con-
tinue the temporary injunctions obtained by
them pending the trial of the actions
Immediately after the close of the court pro-
ceedings the lease was executed by which all
the Metropolitan Street Railway interests were
turned over to the Interurban company. The
lease was then filed with the proper authorities
in Albany Westchester and New-York coun-
ties.
Under the new arrangement the Metropolitan
Street Railway Company shareholders will re-
ceive a perpetual dividend of per cent on their
stock. The Metropolitan Securities Company is
to receive the certificates under the agreement
between the Interurban and Metropolitan COM
panies.
Both complaints alleged that the arrangement
was fraudulent and that the Metropolitan Street
Railway Company shareholders would not re-
ceve as large a dividend they would get If
the arrangement should not be carried into
effect
After reading Justice Gildersleeves's decision
a representative of the Metropolitan Street Rail-
way Company made the following statement;
The plan will now proceed along the original
lines. The only thing that enjoined was the
actual taking of possession under the lease me ne
the stockholders of the Metropolitan Street Rail
% ~ the cqmP41g ito company
be mailed. Owing to delay in mailing them. Ills
p, 1902
Isidor Wormser jr. said that his original suit
did not contemplate the request for preltmi-
nary injunction. and that he was satisfied 10
await the final outcome of g. suit on its trial on
the merits. "Of course" added Mr.. Worrnser,
they may go ahead and make the lease, but
will they?'
peculiar feature of the litigation. which is
exciting n great deal Of comment In the Street,
is the appearance In It. In one capacity or an
other of certain men who have from time to
time figured In unsuccessful stockholders
suits" directed against large corporations; and
Wall Street recalls ct this time the proceedings
Instituted against the Brooklyn Rapid Transit
Company and the New-Amsterdam Gas Com
pany. in 1880 and against the Consolidated
Gas Company trustees and the American Steel
and Wire Company officers, in 1900. not TO speak
Of the Peter Power proceedings and the Amer
lean Tobacco case. pending.
Justice Gildersleeve in his opinion, after not
ing that the alleged contract of lease of the
Metropolitan Street Railway Company TO the
Interurban Street Railway Company was rati
fed by about so per cent of the stock of the
former corporation and ali the stock of the lat
ter describing the organization, capitalization
and scope of the two companies named and the
Metropolitan Securities Company, mentioning
the fact that Kuhn. Loeb & co. have under
written par the entire capital stock of $50
100000 of the Metropolitan Securities Company,
conditioned upon the approval of the lease. and
outlining in detail the considerations which ac-
cordlng TO the contention Of the directors of
the Metropolitan Street Railway Company de-
cided them 10 adopt the plan OF leasing their
property 10 the 1nterurban Street Railway Com
pany. continues. in part. as follows:
The business done by corporations In this coun,
Try is of great magnitude and embraces every neId
tributed it is comparatively easy for a few men
who once acquire control though h0dns out
For instance. the entire holdings Of the present
but r about S $500 Out 81 Of 5000 Shares 1t Is Of the
highest Importance that the officers and drectoTS
stockholders This is Indispensable 10 the peaceful
and M by STOCKS o. Or the Bonds
: The acts therefore OF the officers and directors
holders, are properly subjected to the fTsest in
when challenged and the protection Of the court in
voked should receive most careful consideration
the Rairoad law authorize lease from ore rail-
road corporation TO another by which the lessee
careful examination Of the lease in QUESTION am
have been complied with The fallacy OF plain
tins claim that there is merger and consolidation
discussion s hold that the lease cannot he said to
be void upon its face as 9sr Of 5a% 1d 5ff5e
lions cannot rest upon this Ground own ,druen,
upon business proposition for that OF the di-
reet9rs and OF ma1tory OF the stoHEfG nd
evidence here that overcomes the presumption that
the directors and majority stockholders are acting
t appears from the papers before US that the the
Securities Company the right to subscribe for
8 Of the stock Of said eSC91 @ 1ha e
ropolitan Company the opportunity of subscribing;
o Of capital stock at par upon the same
terms as to Time Of payhmenr Of su1Se G as
have has been pnderTrisn3 at psr ~, BY
M thaa this eeG prvese Gompea the minority
stockholders to take their interest In the surplus
G Gh7es e ens and in e
property to another business outside Of the char
tered purposes OF the company cannot agree
meh { n r e9R'e on sEaty " ' 0''0 no
the stockholders arc limited annual dividend
Of per cent for 999 years, matter how great
the earnings and profits of the Metropolitan system
may become. 1t is true that should the net earn
ings of the system in time exceed per cent the
holders Of stock OF the Metropolitan Securities
Company would get the benefit. Those considera-
tons however. do not affect the bona fdes of the
plan now sought to be carried out by the Metro
politan Company.
JOHN A. VAN RENSSELAER, BANKRUPT
HIS LIABILITIES ARE GIVEN AS So. 40 rs AND HIS