The Montgomery advertiser., 1903-05-17
ENSLEY LAND CASE
nnrnx1 AND OPINION OF JUDGE JONES.
sopmplaining Stock Holders Not En- titled t5 the Aid of Equity, But Can Beck Redress in Courts
 of Law.

Dirmingham, May 1sl Especial )--Judse
 1oneB yesterday forwarded decree and A optuion in the EnsIey Land Company
 eass to the Clerk of the United States tfacted a great deal of attention. It was 4Fgucd at the last term of the court by 41ot1nkutshed lawyers from Chicago. Naahvtlle and leading attorneys in Ala z e4ma- The opinion Is very elaborate. It 1eals with the history of the Land Com pany from It's Incorporation In lss6 to the present time. The present suit Is by dis satisfied stockholders of the Land Com pany. who applied to the directors and etockholders of the gnsley Land Com psny to bring this suit. and were refused. IhA purpose of the suit Is to recover 24O acres Of land, the present site of the town of EnsIey. from former officers of the do1sa.Ce ona CenDspy; p 1sys whd bought from the
 The complainants charge that the ofii- cers of the Land Company, who were also omcers of the Tennessee Coal. Iron and Railroad Company, knew that the latter would soon build their steel plant at Ems Icy. and concealed G4fs from the stock holders when they met in January. 1898, to arrange the affairs Of the Land Com pany which was then largely in debt, at company. That these directors organized the Ensley Company. which they really
 owned, but hid their interest in 1t. and purchased from the Land Company 24o acres of its choicest lands, for little over S20.000, when it was really worth over ten times that sum, and that these facts had only recently come to the knowledge of the stockholders. The purchasers de- murred to the bill
 Judge Jones held, in substance, that the xefusai of the stockholders and board of directors to authorize the suit was bind
 1ng on the court, 1t not being charged that. that the majority stockholders of the Land Company were interested in the mn1ou nr<tx, 7.~ h. 4,-a, ,k k1.> Ghasers. or acting otherwise than in the eknrc1se of honest judgment. He re- views the conditions existing at the time of the sale and four years afterwards. suit. and holds that the transactions, as set forth in the bill, do not evfnce such negligence or indifference to the rights of tha corporation as amounts to a fraud upon the minority, and therefore as the company had the right to sell the lands to pay debts and the majority refused to sue that the Irregularities in the meeting, CT the deceit in bringing the sale about, dio not make the conveyances bad; but them aside If application had been prop erly made within a reasonable time after the discovery of the deceit. and knowi- edge of the interest of the officers of the corporation in the purchase. As the ma refused to sue. and their action was not shown to proceed from bad motives, it bsund the minority.
 The court also held that if the stock holders had distinct rights of their own, they could not come into court of equitx after waiting four years. without mak- ing any objection. when they were charged with notice of the fraud. long before the filing of the bill. while town of several thousand inhabitants was be- ing built up and the land rapidly increas- ing In value, and then hold the purchasers for the profits" The stockholders are not now entitled to the aid of a court of equity, but the decree leaves them to pursue such rights as they have in courts Of law against the offending directors, Land Company by reason of the sales.