The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1906-12-31
MIDDLEsEX BANKING COMPANY
AFFAIRS.
Demurrer to Minority Stockholders
Complaint Overruled.

Demurrer to Minority stockholders
Complaint Overruled.
Judge Wheeler Of the Superior court,
at lis recent term In Middlesex coun-
ty, has decided a matter Of considera-
BILE interest to the legal fraternity of
this state. 1t will be recalled that
stockholders representing about $780,
900 originally invested in the stock of
the Mlddlesex Banking company of
Mlddletown, Conn, brought an action
last January, in which they asked that
the superior court should appoint a re-
ceiver to take possession Of the prop
erty Of this corporation for the bsneft
of the stockholders, and that the cor
poration should be dissolved. This
proceeding was brought under section
rs of the corporation act. Of the state
of Connecticut of 1908 The essential
features of this section are as follows:
whenever any corporation having a
capital stock has wilfully violated its
charter or exceeded its powers, or
whenever there has been any fraud,
collision or gross Acknowledgement in
the conduct or control of such corpora
ton, or whenever Its assets are In dan
ger of waste through attachment, liti-
cation or otherwise or such corpora
ton has abandoned Its business and
has neglected to wind up !rs affairs,
and to distribute its assets within a
reasonable time any sI3ckholjer
or stockholders owning not less than
one-tenth of its capital stock may
apply to the superior court In the coun-
ty wherein such corporation is iocat-
ed for the dissolution Of sucn corpora
ton, and the appointment Of a recelv-
err to wind up its affairs
The complaining stockholders among
other allegations aver that the corpora
ton has paid no dividends since 1875,
and that the company has lost money
ever since that year, and in support Of
this point out the fact hat in August
and September, 1905, the company took
steps to reduce its capital stock by
one-half In order that the company
might appear to have a surplus Of
$237 900, which surplus these stockaold-
ers claim, is produced by largely over
estimating the value Of the resources
of the company, and that fair valua-
ton Of these resources would show that
this surplus doss not exist. The lengthy
bill Of complaint contains many other
charges with reference to the manage
nent of the company, which the offices
of the company have thus far avoided,
answering by means Of various dlla-
tory motions and this recent demurrer
to the complaint. In spite of the clear
wording of Section rs, the company
through It's attorneys claimed that APP
plication for receiver could only be
made either by the owners of a ma
jority of the stock Of the corporation
or by the building and loan commits
sion, With reference to this claim
Judge wins eler uses the following Ian
guage;
''The legislature does not appear at
any time to have intended to entrust
the interests of stockholders of such
corporations entirely to the protection
Of public officials but on the other
hand, specially provided that holders Of
majority of their stock might in GER
tain contingencies take action for the
protection Of the interests of the stock
holders. 1t cannot be regarded as al
together improbable that the legisla-
ture might have considered it wise to
make some provision for the protection
of minority stockholders Of stock in
such operation, or for the protection
of the interests of all the stockholders
at the instance of the holder of mi
nority of the stock"
And concludes by saying, ''the Ian
guage of the act of 1908, and the raa-
sons for it's enactment, are too clear
to admit of the construction claimed
by the defendant. Demurrer to the
plaintiffs complaint is overruled,