The Montgomery advertiser., 1903-04-07
DECISION OF BURTON The Keene Faction Loses
 Out. STOCK MAY BE VOTED Senator Foraker Gives Notice X. of Appeal. Opinion Holds That Union Pacific
 is Not . Party to the Suit. Lautsrbach Says It's
 . Tsehnicality.

Cincinnati. O.. April s.-At D. m. to- day Judge Lurton concluded the reading of his opinion in the suit making appli- cation to restrain tfe Union Pacific from voting It's so0,00o shares in the Southern Pacific election that had been set for April 6, and for other relief.
 The decision was a refusal to grant the injunction and to afford the relief asked.
 The opinion. which was quite lengthy. was against the contention of the com. plainsnts that the Union Pacific was . necessary or actual party to the suit, even though President Harriman of the Union Pacific. made an affidavit in the case. Being a mere witness in the case did not amount to an appearance by the Union Pacific as party in the suit
 As to the averment that the Union Pa- cific was sxpending the receipts of the Southern Pacific in betterments on the Central Pacific. with a view to the ulti- mate purchase of that road, the court held that even if true. 1t could not be sustained except on . showing that the action was ultra wires. On the whole case the court held that the biil be dis missed.
 Senator Foraifer, who represented the complainant minority stockholders of the Southern Pacific. gave notice of appeal to the United States Court of Appeals. and asked that pending the hearing of this appeal the election of directors of the Southern Pacific. set for April s. be stayed
 Lawrence Maxwell and Judge Hum phrey representing the defendanta agreed the order. inssmuch as to do oth- erwtse would render the appeal ineffec- tive. It was agreed that the stocixhold- CTS may meet as arranged and elect . chairman and then adjourn until called by the Chairman after the appeal has been disposed of by the Court of Appeals. After rsciting the facts in a history of the contention, the affidavits, arguments and claims in support of both the bill or application for an injunction, and tine answer. Judge Larton held:
 Judge Lurton's Decision.
 Ffrst-The first and dominating dues- ton is whether the Union Pacific Com pany is an Indispensable party without which no decree can be made in respect of its right to vote the shares of South ern Pacific stock at the approaching stockholders meeting for the election of dirctors of Southern Pacific Company. Unless otherwise provided by tho organic law of the corporation. the right of a stockholder to vote upon his stock at all meetings of shareholders is a right in- herent in the ownership of the shares and as such, a property right.
 If the right of the s00.00o shares bene- ficially owned by the Union Pacific Rail- road Company to vote be denied, 1t must be either upon the ground that the shares have been illegally issued or that the company is incapable in law of holding such shares. or that some public policy will be offended if it shall be suffered to exercise the ordinary incident of such ownership by voting them in stockholders meetings, or that the property rights of the minority are to be thereby so serious ly put in jeopardy as to justify a court of equity In practically turning the own CT and holder of such shares out of con- trol and management of the defendant corporation and placing in control the minority in shareholding interest.
 To justify such result should have to hold and adjudge either that the Union Pacihc Railroad Company was incapable of legally acquiring and holding shares in the Southern Pacific Company or that if competent to won and hold such shares. 1t ought not to be suffered to exercise the right of participating in election of directors. as such participation may re- suit in placing the Union Pacific Com pany in a position where 1t would be ca pablo of controlling and dominating the management of the defendant company.
 Competitive Relations.
 Such a conclusion would involve an in- quiry and determination of the competi- tive relations of these companies to each other in order that they might be brought -A kAx Nvxfn which forbid the unification of such prop critics, or I should have to find that one or both companies were subject to some positive statutory disability which would forbid the one to hold the stock of the other or any unihcation of operation through stock ownership. traffic or "com- munity of interest agreement which would substantially eliminate the motive for competition.
 In default of some such statute operat- ing upon one or both of these companies. or of satisfactory evidence of such com petitive relation as would, from consider ation of public policy. deny to one the right to dominate the other through stock ownership or other scheme of commission. I would be driven to find as a matter of general law that minority shareholders might restrain & majority shareholder from voting for directors at all upon a showing that the result would probably be the selection of trustees. who would not manage the corporation in the inter ests of its own shareholders, but in an interest which was repugnant to them as a class. The direct effect of any such decree upon any of the theories upon which am asked to act. would be to de- prive the Union Pacific Railroad Com pany of one of the most valuable incl dents of its ownership of its Southern Pacific shares. the right to vote for man aging directors at a meeting of stock holders.
 It is therefore according to every defini- ton an indispensable party to any bill which challenges its right to own or vote upon its Southern Pacific shares. It must be accepted as altogether fundamental that no court can adjudicate upon the rights or interests of one who is neither nor constructively before the court.
 Limit of Jurisdiction.
 The principle of due process of law un- compels observance of the Epls which limits the just Jurisdiction Ot