The sun., 1919-05-24
RECEIVER REFUSED. :
In NEW HAVEN SUIT
Federal Judge Manton Decides
Against Stockholders Seek
ing Restitution.
AIMS AT OLD DIRECTORS
Court Ruling Opens Way for
Amended Bill to Make
Them Parties.

Federal Circuit Judge Manton denied
yesterday a motion made in behalf Of
Harold Norris and other stockholders
Of the New Haven Railroad to appoint
a limited receiver for the company. The
motion was made in a suit In equity in
which It is sought to recover from for
mer directors of the company for losses
agsregating s155. 200, 900 alleged TO have
been suffered by the corporation In an
Illegal effort to effect a monopoly Of
transportation systems in New England.
The suit Is an effort to give vitality
TO the Adams suit in the United States
District Court, which has been dormant
for more than a year A duty OF the
limited receiver, II appointed with pow
ers In accordance with those sought in
the Norris suit, would have been to re-
port to the court on the advisability Of
intervening in the Adams suit. The
general object of the new suit 10 to put
the cost OF the litigation against the
former directors and the estates Of the
former directors on the New Ravens
treasury.
Jurisdiction IL Lacking.
Judge Manton denied the motion for
a temporary limited receiver to act pend
ing the trial of the suit on the ground
that TO make such an appointment is
not within his jurisd lotion as a court In
equity.
Saul s. Myers Of counsel for the plain
tiff stockholders said the decision held
much encouragement for his clients He
said the courts reference to the Adams
suit and Judge Hough's opinion indi-
Gated his future course. The motion
will be renewed and may be made either
In the Adams or the Norris suit II
the Norris suit is pressed, the complaint
will be amended to make the former
directors defendants.
In the Adams suit the defendants, be-
sides the railroad corporation, are the
following: William Rockefeller. Charles
NJ. Pratt and Lewis Cass Ledyard; and
]. Pierpont Morgan. Herbert l.. Satter-
lee. William p Hamilton and Lewis Cas-
Ledyard as executors under the last will
and testament of J. Pierpont Morgan.
deceased, and Florence A. v. Twombley.
as executrix under the last will and
testament of Hamilton Nick. Twombly,
deceased.
Opinion of the Court.
The plaintiffs attorney said that he
was much encouraged py tne court
comments on the action OF the directors
of the New Haven in refraining from
bringing suit against their predecessors.
because the latter had not benefited per
sonally by the acts complained OF. The
court said the test was whether the old
board did things without authority and
whether brides were used to corrupt leg
islators. and added that refusal to
institute restitution suits by advice of
counsel was not a defence for the new
board. The court added:
Nor can the directors take refuge in
the excuse that the company owes a
large floating debt which in the near fu
ture may require borrowing large sums
Of money to finance II, and that there
fore II suits were brought against pow
erful financial men such as are named as
defendants in the Adams case their abil-
ity to finance the affairs of the company
might be endangered. The suggestion
contained in the advice that 1t is for the
directors to take caution what effect on
the financial situation might be produced
by the proceedings proposed Is one that
should not go unchallenged in a court in
America. No man 10 too powerful TO be
beyond the reach of the law. no matter
what may be his social or financial status
in life"