The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-02-20
HARTMAN WINS.
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merely that the act complained of is a
puDllc wrong; they must also show
tnat py the doing of such act they will
suHer special injury to their civil or
property rights. This election of di-
rectors at the coming meeting can work
no legal wrong to the compliments
ana no special injury to any of them
is proved, which calls for the interpo-
sition of this court
The court then asserted that the find
lngs ana opinion of the interstate COM
merce commission are not evidence in
this case, and declared that he had no
power to enforce the Sherman act, and
quoted numerous legal decisions in
support OF his assertion. The decision
then continued:
There is but one ground upon which
TINS Dill can be maintained. If the
Union Pacific had no right to buy, hold,
or own either, in the Illinois Central,
or the Securities company, or either of
wholly without right. then I
think bona f1de stockholders without
alleging irreparable injury may ask
the court to throw them or it out.
This brings us to the question, is
there in the public policy of this state
a prohibition against the voting by a
foreign corporation of stock In do
nestle corporation, which stock 1T pur-
chased and paid for and holds under an
express power granted to it by the
state of it's CREATION
The court declared that corporations
per Sc are not barred from using and
holding the stock of other corporations,
and said that the fact that the pur-
chaser might be a foreign corporation
and the stock that of a domestic cor
poration could not change the rule Of
law. He said:
The reason why purchases of the
stock of the Illinois Central by the
Union Pacific and the Railway Securi-
are invaded, must be found else
where than in the fact that they are
foreign corporations.
No Law for 1t.
The court denied that there is any
rule of the American common law pro-
hibiting one corporation from holding
stock in any corporation when the first
corporation has in it's charter specific
power to do so. In this case, he said,
it was proved and not denied that the
Union Pacific and the Railroad Securi-
ties company. each has express power
granted to it. by the state of it's crea-
ton to buy, own, and hold stock in
other corporations.
The court then entered upon long
and extensive discussion of various
statutes regarding the holding of
stock by corporations in other cor
holdings are not prohibited by law.
nor opposed to public policy. He
then said:
1.-The right of the Railway securi-
ties company to vote its Illinois Cen
trail stock is unimpaired by the fact
that the Union Pacific owns practical
ly all of It's stock. So long as the
voting power of the securities COM
pany is used in a lawful manner and
for lawful purposes it is immaterial
who owns its stock
The decision further declared that
the Union Pacific and the Illinois
Central are not competing, but con-
Meeting lines. and that the Union Pa
cif1c under its charter and laws of
Utah, has a clear right to own shares
Of stock of the Illinois Central, which
1t purchased in 1906 and that 1t has
the essential right to vote that stock
at meetings of the stockholders of
the Illinois Central unless the right is
forbidden by the laws or public policy
of Illinois.
The court said in conclusion on this
subject:
"Such prohibition does not exist un--
less it aff1rmatively appears. 1t is not
established by the mere lack of legis-
lation upon that subject.
The Conclusion.
In concluding his decision Judge
Ball said:
1.-The usual office Of a preliminary
injunction is to continue the status
quo until the final hearing. To sus-
tain this preliminary injunction and
thus to prevent the Union Pacific
and the Railway Securities company
from voting their stock at the coming
election, would be to change the
status quo before the right of these
corporations to own and vote such
stock has been fully and finally deter
l,xv !, W
ditions barred out the meeting might
result in an entire change In the
management of the Illinois Central.
To dissolve the injunction and to let
the action of the court in regard to
the ownership and voting power of
this stock await the final hearing
means no more than the continuance
of the present management with the
change of one director only, and he,
eight of the director defendants
swear, will be an able, competent
man, neither controlled nor connected
by or with the Union Pacific. The
balance Of convenience and incon-
venience is clearly with the defend
ants.
81 am of the opinion that the
securities company and the Union Pa
cific have full ownership of the
shares Of stock they hold in Illinois
Central, including the right to vote
that stock at the coming meeting of
stockholders, and that such right to
vote is not forbidden by the statutes
of this state nor by decisions of our
supreme court, nor by the public
policy of Illinois.
.The motion to dissolve the injunc-
ton Is allowed"
History of the Case.
Mr. Fish, who was formerly presi-
dent of the Illinois Central road, filed
a bill on October IA, 1907, asking that
286.231 shares of Illinois Central
stock owned by the Union Pacific
Railroad company. the Railroad
Securities company ana the Mutual
Life Insuranc company of New York.
be enjoined from being voted at the
annual meeting of the railway COM
pany, set for October 16. The mat