The Montgomery advertiser., 1909-04-16
Decision of the Supreme
 Court. DIRECTORS ARE FREED <
 BY COURTS OPINION Majority Holders Still Unable to Vote a Stock Sale. Bx the Injunction Which Had Been Granted, the Anairs of the Company Were Placed In
 Hands of Minority.

By the decision of the Supreme Court of Alabama, in the case of the South and North Railway against Henry B. Gray. the directors of the road are freed. to a certain degree, of the re- straining order of the City Court of Montgomery. which bound their hands absolutely. However, the restraining order holds good. insofar as 1t still prevents the majority stockholders from voting their stock to sell the road. or from selling the stock of the com- pany.
 Also by the opinion of Judge Ander- son. rendered yesterday. there will be no receiver appointed to take over the affairs of the road. as was sought by the original bill. nor Is an accounting held necessary, by the Louisville and Nashville Railroad.
 Henry B. Gray filed the bill of com- piaint against the directors of the South and North Railroad, in the City Court of Montgomery, alleging that the Louisville and Nashville Railroad owned 90 per cent. of the stock of the South and North, and that the direc- tors of the latter had been elected for twenty eyars or more by the vote of this stock. He further alleged that the 90 per cent. stockholders--in other WUTues tHG LOutSNAtte dHu Rairload--sought to purchase the prop erty of the South and North at their own terms, to be effected by q vote of stock.
 Gray.s purpose, the complaint averr- ed, was the protection of the minority stockholders, as the bill declared that sale would have been disadvantage ous to them. He asked that the nia- jority stockholders be enjoined from Wnffuor traix- atoeR fn favor 0f inc oro- posed sale to the Louisville and Nash vile, or In favor of any sale of stock. or in favor of the election of It's own officers or agents. as directors of the South and North Railroad, or from vot- ing the stock. pending the litigation at any meeting of the stockholders of the South and North.
 The injunction was granted: the af- fairs of the company were placed in the hands of the minority stockholders --4the 10 per cent. of the stock--and the alleged agents of the Louisville and Nashville Railroad, who owned 90 per cent. of the stock, could not vote on so much as the adjournment.
 Upon the appeal. the Supreme Court held the injunction good. so far as 1t prevented the 90 per cent. stock from being voted to sell the road or any part of the stock: otherwise. the in- function was dissolved.
 Protect Stockholders.
 Relative to the decision on this phase, Judge Anderson said;
 "We are called upon to, in effect, either turn this road over to less than 10 per cent. of the shareholders or place it fin the hands of a receiver; for snch would be the result if the own CTS of over 90 per cent of the stock are restrained from voting their stock. in and about the management of the rvfl1 m a fw stockholders to defraud and oppress the minority. Neither will they permit themselves to be used by minorities 10 hamper and letter majority owners in public service corporations. in the ab- sence of proper showing. that irre- parable injury will be done the minor ity.
 Besides the application for an in- Junction. the bin requested the ap- pointment of a receiver for the South and North Railroad. alleging that the property was being operated by the Louisville and Nashville Railroad, with the assent of the directors, and for their benefit, and that the South and North was without the necessary roll ing stock and equipment to be oper- ated without the aid of the L. and N
 The respondentS the directors of the South and North, demurred to this, but the demurrers were overruled. and. in effect, the receiver was appointed Only the appeal from the decision withheld the appointment. The Supreme Court decided that the City Court Judge erred in overruling the demurrers, and reversed the order, substituting one sustaining the demurrers of the rail- road.
 Sought Accounting.
 The bill also prayed that the Louis ville and Nashville, be made to account to the stockholders of the South and North for the earnings of the latter during all the years In which the form CT held the controlling stock; for the proceeds of certain lands of the South and North, alleged to have been used by the L. and N: for the proceeds of certain bonds of the South and North, alleged to have been appropriated by the l.. and N: for the value of certain rolling stock of the South and North, which, 1t was alleged the L. and N. took possession of. and did not account for.
 It also asked that an injunction be issued against the Louisville and Nash vile Railroad from keeping the pos session of the South and North's prop erty and franchises. and to return to the home office of the South and North its books.
 The respondents demurred to this ap- DllcALlOH, put were ONeTTul6Q. Again, however. the Supreme Court sustained the demurrers upon a former appeal. and again in the opinion rendered yes terday.
 Of its decision as to the accounting, the Court held:
 ''So much of the bill. as seeks an &C., counting and the appointment of a re. ceiver was construed adversely to the complainant on former appeal: South and North v. Gray, 151 Ala. 215. Up- on that authority. holds that the Citv Court erred in not sustaining the mo- ton and demurrer of the respondents to so much of the bill as proceeded un- on the theory of an accounting and a receiver.
 "As indicated above, the bill con tains equity. and the Injunction was properly granted. insofar as 1t sought to enjoin the directors from selling the road, and should have enjoIned the stockholders from voting for a sale of the stock of said company. The in- junction was improper insofar as 1t ex- tended to any other acts. and is here