Year: 1875

ress.


From the Woodstock Standard.


Vermont and Canada Hearing.
! The hearing before Chancellor Barrett.
Wednesday evening, was attended by quite
number OF lawyers and Others. The con-
test is between the minority Of the stock
holders of the Vermont and Canada as ora
tors and the majority of the stockholders as
defendants. F. A. Brooks. of Boston. ar
Hon. c. W. Willard. OF Montpelier, for the
defendant majority.


The original agreement between the Cen
trail Vermont and the Vermont Il Canada Tor
the sale Of the latter road to the former
company was satisfactory to the stockholders
OF the Vermont & Canada, and indeed Mr..
Brooks himself. as Mr.. Willard stated in his
argument, Is entitled to the credit of bring
ing it about. But subsequently the Central
proposed to Impose new conditions, and with
regard to these conditions there arose an
honest difference Of opinion among the
directors of the Vermont i Canada FL
naly the question was submitted to vote
of the stockholders on the 29th of April,
who by a majority vote assented to the
new conditions, whereupOn the minority
petition for an injunction to prevent the
consummation of that portion of the trade
contained in the following clause OF the
memorandum of agreement


Now it is agreed by the parties hereto, that the
said Vermont Canada Railroad Co. on receipt OF
said bonds will offer the same in exchange Tor the
stock OF said Vermont q Canada Railroad Co, and
procure such exchanges far as practicable dollar
Tor dollar. and withhold from any owner Of said
stock who shall neglect or decline TO exchange his
stock for bonds any interest on his portion OF SAID
bonds which may come into hands Of the Vermont
& Canada Railroad Co, as well as all dividends on
such stock. until such owner or owners OF stock
shall exchange the same for bonds as Aforesaid, un
less compelled BY Judgment Of court 10 do other
wise.


The counsel for both parties enlarged
somewhat upon the history of all the pre-
llminary negotiations, but there was no
contest as to the facts. Mr.. Brooks main
tanned that the proposed condition was
clearly inequitable and illegal, If not fraud
ulent, and while he would not impute any
intention of fraud on the part OF the Central
be still feared that they would have the op-
pOrtunity in the future to work great IN
Jury to the stockholders of the Vermont
and Canada. And he would suggest that
this attempt to get control OF the stock OF
the Vermont and Canada might be in the
interest of individuals in control of the Cen
tral and operate to relieve them of all per-
sonal liability in the accounting now pend
ing under the lease of the Vermont and
Canada. 1t Is clearly the object OF the Cen
tral to get the stock in order TO control the
company for purposes of their own lie
did not consider it at all legitimate or neces-
sary that they should acquire the franchise
of the Vermont and Canada. which they can
do only by getting possession oil the stock
lie denied the right of the corporation,
which is the representative, to cOerce the
stockholders who are the principals When
the Central get control OF the stock they
may destroy or cancel the bonds not ex-
changed at their pleasure to the great IN
Jury of those stockholders who do not be-
lieye it for their interest TO make the ex
change.


Judge Barrett suggested significantly
that il the proposed condition operated
as a discrimination between the stock
holders It was clearly illegal and lnequit-
able.


Mr. Brooks insisted that the effect was
lust this, to make discrimination. 1t de-
mes to the stockhOlder the right of indie
pendent Judgment in the control OF his own
property and compels him to exchange Tor
thing he does not want or suffer loss oi
all rights and benefits by virtue OF his own
ership. He cited numerous authorities and
among them two cases where Judge Bar
rett himself delivered the opinion Of the
court.


Mr.. Willard in answer read from the
charter of the Central Vermont, granted in
1872, and which authorizes the eonsOllda-
tion of the two roads and grants the right
10 purchase, own and operate the roads con
stituting the line. The Intention was to get
these roads out of chaneery and make the
property of some value to the owners. For
a long time no dividends have been paid to
the Vermont and Canada under the lease OF
its road 10 the Central.


There IL no question that the Vermont
and Canada corporation have the power to
sell their road for bonds. These bonds be-
come the sole property of the corporation.
What will be done with them? Each stock
holder can have his proportion in exchange
Tor his stock and voluntarily There Is no
discrimination in that. He did not under
stand that any collusion between the ma
jority of its directors and the Central was
charged The directors were acting IN good
faith for what they believed to be the best
interests of all.


He admitted that YOU cannot compel a
stockholdcr to surrender his stock any more
| than any other property. but be held that
! the stockholder has his remedy in this case
full and complete. Suppose all should re-
| fuse to exchange. The dividends wOuld be
| paid over to the Vermont and Canada cor
poration and become their property True,
under the contract, they were bound not To
distribute the funds SO received to the stock
| holders, but he thought that before this ac-
| cumulation went on great while the
courts would find a way to proper diStri-
button. The property Is not TO be injured
| or destroyed and the legal rights OF the
stockholders to share in its benefits remain
| in spite of this contract and can be enforced.
But he did not see the necessity OF raising
the issue now. Ii is like crossing bridge
before you get to it. All parties admit the
! desirableness of the sale but differ As to this
clause. Should the court interfere now 1t
would undoubtedly prevent the eonsumma-
ton of the trade and deprive all, both ma
jority and minority, of all income from their
property. Ii is time to meet this question
OF the individual rights of stockholders
when it arose, and nc would maintain as
stoutly as any one the inviolability OF those
rights.


Judge Barrett asked Mr.. Brooks il he de-
sired to break up the trade rather than to
/ submit to this condition ur stipulation and
he replied that he did, believing that 1t
would be fraught with great mischief. This
matter Of numberless individual suits was
what he wished to guard against, and he
believed it to be the duty of the court to
step IN and prevent such great wrong.