New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-12-12
RULES AGAINST
NEW HAVEN WIEN
Court Holds EX-DirectOrS
Must Answer in ReSti-
tuition Suit
NEED NOT SPECIFY
EACH CONSPIRATOR
Wrong Use of Funds
Would Give Plaintiffs
Right to Press Action

Ia an opinion fled late yesterday
afternoon in the United States District
Court. Judge Charles VI. Hough over
ruled the principal objection made in
behalf Of William Rockefeller, Lewis
Cass Ledyard and other former di-
rectors Of the New York, New ,Gaven
& Hartford Railroad Company, to the
equity restitution suit for more than
$3.50, 100000, brought by four stock
holders IN the railroad company.
Judge Hough refused the defendants
plea that the plaintiffs, headed By Ed
win Adams, be required to state IN
detail which Of the several defendants
participated IN an alleged conspiracy
i'm violation Of tho sherman antitrust
laws.
Failure to prove a conspiracy Is not
destructive OF the suit"
Judge Hough held in his opinion. But
! do not think that plaintiffs are now
to be called upon to specify those
persons who may be responsible If
plaintiffs fail TO prove the case As
made. Therefore the parts of the
motion seeking a statement as TO which
OF the particular defendants partlcl-
patcd i'm the several acts complained
Of Is denied"
The suit. which was filed last August
alleges the defendants. during the
twenty -four years after 1890. used their
dominant power over the New Haven
road 10 cause the corporation TO make
execute contracts, acquire
property and cXpend moneys IN viola
lion Of the Sherman law and Of the
statute Laws of the several states IN
which the road operates. These illegal
acts. ~ is alleged cost the ROAD
millions of dollars, which the plaintiffs
seek 20 recover from the former IL
rectors.
al in the present case a conspiracy
be shown" says Judge Hough's opinion.
"the substance Of the bill Is not much
Let D. be assumed that all
OF these defendants. severally and
Jointly. desired and intended TO violate
statute laws both OF the nation and OF
the several states. n they had done
this 10 the pecunlary bench, OF the
corporation of which they were direct
ors. 10 is not seen how any action would
lie. either by the corporation itself or
by ans of it's shareholders after the
acts had been committed and the pront-
able results thereof we're I'm the Golfers
Of the corporation or the pockets Of
it's shareholders
Judge dough points out that pecunl-
arv loss els not "A necessary, rarely an
expected and commonly not usual
result of statutory iniraction.' lie
states the logic Of the bill. in his Judg-
mcnt. lies in the charge that the de-
PENDANTS made the purchases and cX-
pended the moneys complained of while
knowing that The prices which they
caused 20 he paid for what the corpo-
ration received were at least double
the fair and reasonable value OF the
things so acquired for tho defendant
company
"Culess it can be shown that the
pecuuiary losses which are the only
subject of recovery here" the opinion
continues. "wcrc proXimately caused
by the violations of the statutes, ther
each defendant is responsible for such
Of his own acts as proXlmately caused
such damages as resulted to the New
Haven company And such recovery
will not, in legal contemplation, he
based upon statutory violation. but
upon breach Of trust and abuse OF
power"
Judge lIough states that in his opln
ion no portion Of the plaintiffs oil.
tends to show that any OF the defend
ants were guilty Of fraud.
"By saying that fraud is not shown
it. is not meant that wrong has nos
been done assuming the allegations o!
the bill TO be true" he explains. "Ot
course. all frauds are wrong. But not
an wrongs are frauds