People v. Albany and Susquehanna Railroad

Upon the issues presented in the pleadings, and the mass of evidence taken upon this trial, the first question presented for my decision relates to the power of the court in equity to give the relief demanded in the complaint.

The mode of determining the title of a party to an office, prior to the Code, was by quo warranto, or by information in the nature of a quo warranto; and these proceedings could only be instituted and prosecuted to effect in the courts of law.

Section 428 of the Code declares that the writ of scire facias, the writ of quo warranto, and proceedings by information in the nature of quo warranto are abolished, and that the remedies heretofore obtainable in those forms may be obtained by civil actions, under the provisions of that chapter.

Section 432 of the same chapter provides that an action may be brought by the Attorney-General, in the name of the people, upon his own information, or upon the complaint of any private parties, against the parties offending. “Where any person shall usurp, intrude into, or unlawfully hold or exercise any public office, civil or military, or any franchise within this State, or any office in a corporation created by the authority of this Stateand section 440 of the same chapter is as follows: “ Where several persons claim to be entitled to the same office or franchise,

Before proceeding to discuss the evidence applicable to the leading issues in the action, I will state such preliminary facts as I deem fully established by the evidence and undisputed.

The Albany and Susquehanna Railroad is a corporation organized in 1851 under the general railroad act of 1850, with a capital originally of $1,400,000, divided into 14,000 shares of $100 each, and subsequently increased by special act of the legislature to $4,000,000, and entitled under the fifth section of the general act to thirteen directors, to be chosen annually by a majority of the votes of the stockholders voting at such election, in such manner as may be prescribed in the by-laws of the corporation.

The by-laws provided that the annual election of directors should be held on the first Tuesday of September, 1852,

At the stockholders’ meeting, convened in pursuance to this notice, it also appears that the inspectors of election chosen at the annual election in 1868, to conduct the election for 1869, did not qualify and act, having been restrained from so doing by injunction, and that, as the proper resource of the stockholders in that exigency, both classes of stockholders desiring to contest such election proceeded to choose inspectors for such election. It is not disputed that such was the right of the stockholders so appearing. (See matter of Wheeler, 2 Abb. N. S. 361.)

Upon the evidence on the merits, it appears that on the

The chief issues for my decision arise upon these facts, and the evidence relates to these conflicting claims; and I will proceed to discuss them in the order in which they were tried.

First. Was the election of the board called the Eamsey board of directors valid and legal, or otherwise ?

The evidence, I think, clearly establishes that the inspectors—Snow, Eddy and Harder—who held this election, were chosen at a meeting of the stockholders, held in the hall of the company’s office or building, organized soon, and I think from ten to fifteen minutes after twelve o’clock, at noon; that they took the oath of office prescribed by the statute regulating elections by incorporated companies— Sec. 7, of title 4, chap. 18, part 1st of the Eevised Statutes—and immediately proceeded to open the polls and receive votes from the stockholders present offering the same, and received the votes of persons so voting, in person and by proxy, upon 10,742 shares of the stock of such corporation, all of which votes were given for the said class of directors, headed by the said J. Pierpont Morgan, 'and that they held such poll open until about half past one o’clock of the same day, and then canvassed the votes

So far as the form of the proceedings upon this election is concerned, I do not see why it was not in all respects regular and valid. The inspectors took the proper oath, and proceeded in the regular and usual way to hold said election. The treasurer presented to them an alphabetical list of the names of the stockholders entitled to vote at such election, comprising the names of all the stockholders whose names appeared upon the ledger and transfer books on the previous 7th of August, or whose stock, scrip, power of attorney or assignment for transfer had been presented to the treasurer for transfer before that day. Ho votes were received except from persons, or their proxies, who appeared by such list of stockholders to have been stockholders on the said 7th of August, and their names were carefully marked and checked upon such list as their ballots were received. It is true that every vote so received was challenged by some person appearing and claiming to have a proxy entitling him to vote at such election, but not by any stockholder or person holding a proxy, who did in fact vote or offer to vote at such election. The person so making the respective challenges did also demand to see the books or the transfer book of the company at the time of making such challenges. These challenges were disregarded so far as the same related to the production of the books, but reference in respect to the right to vote in each case was made to the said list of stockholders so provided by the treasurer. The party making these challenges was not entitled to a production of the books. The challenges were doubtless made in pursuance of the by-law number two of the company above set

After that period the general railroad act wad amended, in 1854. Section five of the amended act provided, “ that' at every election of directors the books and papers of such company shall be exhibited to the meeting if a majority of the stockholders present shall require it.” This provision applies to the election of directors of all railroad companies organized under the general law. But if this by-law were in force it would be simply directory, and the omission to comply with it, and the disregard of the challenge, would not invalidate the elections, if otherwise valid. It would doubtless cast upon the parties claiming under it - the burden of showing that the persons voting at such election, and so challenged, were or appeared by the transfer books on the 7th of August previous, to be actually stockholders in said company, and for the number of shares so voted. This was done, on the trial, by the production of the books, and the production of the ballots" then deposited and preserved, and the proxies presented to the inspectors, and delivered to them at the time of such election. From the books and list of stockholders so voting, the ballots deposited, and the proxies so delivered and produced, it appears that the persons who voted at that election, in person or by proxy, were actual and lawful stockholders of said company at the time, and were legally entitled to vote at such election, with possibly an exception in respect to one or more of such voters, which, if there were no opposing votes, cannot affect the validity of the election, if it were in other respects lawfully held by said inspectors. The fact that the poll of said, election was not open until after twelve o’clock, and was held open until after one o’clock, does not affect the validity of

The objection that the meeting of stockholders held in the hall of said office or building was called to order by Henry Smith, who was not a stockholder, is not tenable. He held a proxy given him and others to vote for one town, and, besides, he was requested by Eamsey, the president, to call such meeting to order and to act for him. This request was sufficient authority for him to act in the place of Eamsey, who was then held in custody upon an arrest by the sheriff of Albany, in an adjoining room. The call was recognized by a large number of stockholders then present. Hendrick, who acted as chairman, was a stockholder, and he was chosen by the affirmative votes of many stockholders present, no one objecting. The vote put by him on the election of the inspectors was fairly and properly put, and the inspectors duly elected by stockholders in such meeting, but few if any voting in the 'negative. The inspectors immediately entered upon the discharge of their duty, and many stockholders recognized them as lawful inspectors, and proceeded to vote at the poll opened by them. If nothing else appeared, this election so held by them would unquestionably be valid, and the persons voted for as directors declared by them to have been duly elected, would be the legal directors of said corporation if the meeting of stockholders at which they were so elected inspectors was a lawful meeting. And there is no ground for its impeachment presented in the evidence or seriously urged at the trial, except that a prior meeting of stockholders had been duly held in the

Secondly. Was the election held by Hamilton Harris and others acting as inspectors, and at which it is claimed that Charles Courier, Walter S. Church and others were elected directors, a legal and valid election ?

The fact is undisputed and indisputable that a stockholders’ meeting was held in what is called the directors’ room of said company, by a portion of the stockholders of the corporation prior to the meeting so held in the hall of said building over which James Hendrick presided; that Walter S. Church was chairman of such meeting, and J. E. Herrick secretary; that Hamilton Harris, Joseph Bush and James Oliver were elected inspectors; that such inspectors immediately proceeded to the room called the treasurer’s room in said building, assigned for the purpose of the election, and opened a poll and proceeded to receive such votes of stockholders as were offered, and continued open said poll until one o’clock p. M., when they closed the same, canvassed the votes, and declared Walter S. Church and the twelve other persons named and voted for, on said ticket, duly elected directors of said corporation. It is also clearly established and undisputed that this stockholders’ meeting was called to order and organized about fifteen minutes before twelve o’clock, and that the said inspectors chosen at such meeting proceeded to the treasurer’s room to open the said poll, and took possession of the polling place, and declared that they came there to act as inspectors, at about ,five or six minutes before twelve o’clock, .and that about twelve o’clock Colonel Uorth, who moved the organization of such. stockholders’ meeting, moved a reorganization of that meeting, and that said in

The organization of this stockholders’ meeting before twelve o’clock was obviously a surprise upon many of the stockholders entitled to attend and take part in such meeting.

The notice for the election fixed the time at twelve o’clock at noon, and there was no notice given or published of a stockholders’ meeting for .any other time, or for any other meeting of stockholders, except such as was involved in a notice of the election. There was nothing in such notice to apprise the stockholders that there was any occasion for their assembling before twelve o’clock, or that any other business was to be transacted except that of the election. So far, therefore, as this meeting and its acts are concerned, including the appointment of inspectors, I think there can be no doubt that there was surprise and fraud upon many of the stockholders, and, as against such stockholders as did not participate in such meeting, the same was irregular and void. All acts done by portions of the corporators, which bear the appearance of trick, secresy or fraud, will be held invalid. ( Wilcox on Corporators, 51.) Surprise and fraud upon part of the electors is ground for avoiding an election. This principle is asserted in many cases. (Rex v. Gahorian, 11 East, 77. Grant on Corporations, 204. People v. Peck, 11 Wend. 611 . Matter of the Pioneer Paper Co., 36 How. 108 .) But it is claimed that the reorganization of the meeting at 12 o’clock cured this irregularity. This would doubtless be so if the new organization were a full, fair and open reorganization, like a new meeting, and attended with no circumstances of deception or unfairness. If the meeting held before 12 o’clock had been entirely abandoned in all respects—and it had been announced that it was so abandoned—and the

The resolutions passed at the reorganized meeting were not new resolutions prepared at the moment, but were resolutions previously prepared, and on their face assume the existence and continuance of an organized meeting and-the previous appointment of inspectors. The resolutions of the new meeting are as follows:

“Resolved, That this meeting proceed with the annual election of directors and inspectors, with Walter S. Church as chairman, and Jonathan Herrick as secretary.”

And next—

“Resolved, That the annual election of the directors and inspectors proceed with Messrs. Harris, Bush and Oliver, as inspectors, in the place of Messrs. Hand, Lathrop and Haskell, ineligible and removed.”

It seems to me that if the case depended upon this point, I should be bound to hold that the reorganized meeting was in fact, and in legal effect, but a continuance of the first meeting. The first meeting did not break up. The chairman and secretary retained their seats at the table with their friendly stockholders, where they sat at the first meeting, and there was no abandonment of the room, or a relinquishment of its preoccupation by those who held

It appears that there was a discrepancy between the time kept at the company’s ticket office and in the treasurer’s room, and the time of the watches of those in the stockholders’ meeting in which Mr. Church presided, and at the election held by Hamilton Harris and his associate inspectors. This difference in time, I think, accounts for much of the discrepancy in the testimony of the witnesses, in respect to the order of time of particular transactions during the day. The Fisk party sent a young man by the name of Wilbur, on the morning of the election, at about 8 o’clock, to the observatory building, accompanied by Joseph Bush, to get the true observatory time; he returned and reported the time by his watch as set by some man at the observatory building, and most of the parties, including Harris, North, Sherman and others, set their watches with his, and regarded such as the true time. Harris testified that at “4 minutes before 12 by the clock in the treasurer’s room, and at precisely 12 by my watch, as I had set it from the time given me by George Wilbur, we proceeded to an opening in the desk where stools had previously bSen arranged—three high stools—and took our „ station there upon the stools. I proclaimed, in substance, that we had been appointed inspectors at a stockholders’ meeting held in the directors’ room, and formally opened the polls. I placed my own hat on the counter in front of me to receive ballots, and the moment I had got through making the proclamation of opening the polls, Mr. Fuller stepped up on the other side of the desk, took out a package of papers and opened them, consisting of certificates of stock and a certified copy of an order appointing him receiver.” These papers, Mr. Harris says, he took and examined, and as Judge Allen protested against the proceedings, he retained them until 12 o’clock precisely by the clock in the treasurer’s room, when, he said, we tookthe

It is thus, I think, quitg evident that the reorganization was moved at least three minutes before 12 o’clock by the time in the treasurer’s and ticket offices of the company, which I think was more to be relied on as the true time in the city of Albany at that point of time than the time reported by Wilbur, as the observatory time, by his watch, set by a man he did not know, and by a clock he did not see, which might be done 'mistakenly, and possibly deceitfully—for it appears that it required a change of most of the watches of the party, whose movements were regulated by the time so reported. If it were important or essential to the decision of the case, I should be inclined to hold that the time of the clock in the offices of the company, which regulated the running of the trains, and was, as Van Alstyne testified, regulated daily by telegraphic communication with the observatory clock, should be held to be the true and proper time to regulate the proceedings of the stockholders at their corporate meetings, and should be considered as affording the true test for the determination of the actual time at the period in question, for the purpose of said election.

But the legality of this meeting, in its first organization, and its reorganization, and of the election held under its authority, was denied and contested on the trial and argument, in connection with these questions, chiefly upon the ground that it was part of a scheme or conspiracy through the form of an election,- for a minority of the

This proceeding was entirely legitimate, proper and lawful. It is the law of joint stock corporations that a majority of the stockholders in interest shall control in the election of the officers of a company, and in its management.

Besides these efforts in the purchase of stock to get the control of the road at the ensuing election, proof was given at this trial to show that resort was had to various judicial proceedings, with the preconcerted design and intent to prevent an honest and fair election, by excluding votes that could not be controlled by the Fisk and Gould interest, and to hinder and prevent a free and true expression of the wishes of the other stockholders at such election, in respect to the future management and control of the s"aid road.

It appears that up to the time of the commencement of this action, twenty-two different suits had been commenced and instituted by the different parties interested in this controversy. With those suits and proceedings I have nothing to do in this connection, except as they preceded, related to, or were designed to affect, influence or control the election held on the 7th of September.

The first of the suits.of this description was commenced

Upon the facts stated in the complaint in this action, I do not see why this injunction was not properly issued. The facts which existed and now appear, that said 3000 shares were issued by the express authority of the board of directors, upon valid contracts, for the benefit of the corporation, and was all valid stock owned by the corporation, acquired by forfeiture for the nonpayment of calls made upon the subscriptions, were either unknown to, or were purposely suppressed by, the plaintiff.

But the order for the appointment of a receiver ex parte must have been granted incautiously and upon some mistaken oral representation or statement hf the facts of the case, as it was in clear conflict with the law, and settled practice of this court. In Verplanck v. The Mercantile Ins. Co., (2 Paige, 450,) Chancellor Walworth states the rule as follows: “By the settled practice of this court, in ordinary suits, a receiver cannot be appointed ex parte before the defendant has had an opportunity to be heard in rela

In the case of Verplanck v. The Mercantile Insurance Company, (supra,) the chancellor also said, that “ in every case where the court is appealed to to deprive the defendant of the possession of his property without a hearing or an opportunity to oppose the application, the particular facts and circumstances which render such a summary proceeding proper, should be set forth in the bill or petition on which the application is founded.”

In this case no facts are stated in' the complaint calling for the immediate appointment of a receiver. It was not stated that the defendants were irresponsible, or that there was any danger of loss from the transfer of the stock; and upon the facts appearing on the trial, such allegations could not have been truly made, for the defendants are rich men, and generally of abundant responsibility to account for the stock if they had violated the injunction and transferred the scrip; and the plaintiff had not, and did not pretend to have, any title to the said stock or lien upon it, and had simply the rights of a stockholder of said company, if all the' allegations in his complaint were true, to have judgment that the said scrip and stock be canceled and surrendered.

But the facts clearly show that these 3000 shares were all valid stock. It was issued by the company, as before stated, by the authority of the board of directors, and composed part of an amount of forfeited stock owned

As this stock was thus clearly valid stock in the hands of the defendants enjoined in that suit, and the order for the appointment of a receiver not warranted by the facts, the prompt steps of the receiver in getting possession of this scrip, as he did from Groesbeck of 900 shares, by taking with him a sheriff’s officer when he made the demand, and explaining the nature of a writ of assistance, intimating in effect that he or the officer had such writ, connected with the fact that he was at Albany on the said 7th of September, and voted on said 3000 shares at the Harris poll, without any other title to the said stock or any transfer to him on the books or of the scrip, would seem to warrant the inference that this suit was instituted for the fraudulent purpose, not only of getting possession of this scrip, and preventing the owners of it from voting upon it, against the interest of the Fisk party at the election, but also with the intent actually to vote upon it as valid stock, in opposition to the wishes of its owners, and in aid of the objects and interests of Mr. Fisk and his associates, in carrying the election of his set of directors.

The next fraudulent proceeding which seems directed to affect the election are the suits of David Wilbur, i'n one of which an injunction was issued restraining the defendant Ramsey from acting as president of said railroad company, which suit was followed by another suit on the next day, August 6 th, in which Azro Chase was plaintiff, and thé corporation and others defendants, in which an injunction was issued, and James Fisk, Jr. and Charles Courier,

The appointment of Fisk and Courter as receivers of the said railroad, audits property and franchises, is obnoxious to the same objection made to the appointment of Fuller as receiver, in the suit of Bush v. Groesbeck, and following the suits above mentioned, it seems to me must have been applied for and procured—as it was ex parte— in order to affect .the election, by giving Messrs. Fisk and Courter the advantage of the immediate possession of the said road, and the control of its affairs, its books, papers and property.

The next judicial proceeding, which it is claimed on the argument was designed to affect, the election, was the suit of Stanton Courter against the corporation and others, including Hand, Lathrop and Haskell, elected inspectors in the year 1868, for the year 1869. In this suit an injunction was issued restraining the said inspectors from acting as such at said election, on the ground that, they were" not stockholders of the corporation.

The summons in this suit is dated Hew York, September 2, 1869. The venue in the action was laid in the county of Broome, in the sixth judicial district, and the

The by-laws, which required the inspectors to be stockholders of the company, had fallen into disuse, and had been disregarded by the continued election from year to year, by the stockholders, of persons not stockholders for inspectors. The same persons had been chosen for the three previous successive years as such inspectors, without dissent or objection, add I much doubt whether said bylaw was ever of any force or validity, and whether the directors could thus restrict the choice of inspectors. Clearly their election was not void. The election of an unqualified person to a corporate office is merely voidable and not void. (Kidd on Corporations, 9. Crawford v. Powell, 2 Burr. 1013. Rex v. Bridge, 1 Maule & Sel. 76.)

It seems to me quite clear that this injunction was improvidently granted, and that the officers of a corporation ■cannot be thus summarily removed from office by a court of equity. But it was doubtless the duty of the said inspectors to obey the injunction, as they did. Ho allegation or suggestion is made in the complaint that the said Hand, Haskell and Lathrop, except that they were not stockholders, were not competent and proper persons .to act as inspectors. The injunction appeared to have been signed by the judge who granted it, on the 6th of September. The use that was made of this injunction is, I think, the more serious ground of objection to it. If it had been procured and served a day or two, at least, before the time

“I set out for the offices of the Albany and Susquehanna railroad in a carriage, at about 20 minutes past 11 in the morning of that day; on my way there I saw two inspectors of election, whose names I knew then but cannot now recall, and I saw a gentleman serve them with a paper which I had given to him, and which included an injunction against their serving as inspectors on that day.”

And he further said that he then went immediately tb the office, and when he got into the directors’ room it was about half past 11.

The procuring and keeping back this injunction, and serving it at the time and in the manner stated, was an obvious and designed surprise upon the great body of stockholders of the corporation.. They had no reason to expect that said inspectors would be enjoined, and therefore had no occasion to assemble promptly to provide for the exigency created by their removal or declination to act, by the choice of new inspectors in a stockholders’

The next judicial proceeding designed to operate upon the election, as claimed by counsel on the trial, was the commencement of a suit in the name of the railroad company against Joseph H. Eamsey, Henry Smith and William L. M. Phelps, in which action an order for their arrest was obtained in the sum of §25,000.

By whose authority this suit was commenced does not distinctly appear. It was, however, commenced by the same attorneys who had commenced all the previous suits for the parties acting in concert with, or in furtherance of, the interests of Mr. Fisk. The order for their arrest was obtained on the 6th of' September, and taken to Albany the same afternoon. The complaint was produced and proved on the trial, but by some mistake was not left with me; but I understand that the cause of action for which

On the morning of the 6th of August it appears that Robert H. Pruyn was put in possession of the office of said railroad, as receiver, and thereafter, (until the appointment by the Governor of Robert L. Banks, on the 13th of the same month, as executive and financial agent, to take charge of the road and operate the same,) as such receiver had the, lawful custody of the books and papers of said corporation, and it appears that he was acting in concert and sympathy with Mr. Ramsey and the said officers and persons who took away the said books, and that Phelps, the treasurer retained under him, had access to the books and made entries in the same from time to time, under the direction or authority of said Pruyn. The appointment of Mr. Banks as executive and financial agent, upon the request and stipulation signed by the parties and delivered to the Governor, gave him the right to the possession and control of the said books, and virtually superseded both receivers. So that when this suit was commenced, neither of these receivers were entitled to the custody of the said books, or to bring any suit for their conversion or their non-delivery to the agents of the Governor. The books were, in fact, returned to the office on the night of the 6th

This order of arrest, thus procured and thus executed, could have no other object or purpose on the part of those who instigated and directed it, than to hinder and embarrass Mr. Ramsey and his friends among the stockholders, and prevent them from participating in the stockholders’ meeting, and possibly in the election. Some difficulty was found, as it appears, in getting bail, and if it had not chanced that able and responsible bail had been soon obtained from persons in attendance upon the election, the defendants probably would have been unable to take any part in the election.

I come to the remaining branch of the evidence tending to establish the fraudulent combination and conspiracy imputed to Mr. Fisk and his associates, in respect to the stockholders’ meeting held in the directors’ room; I mean the preoccupation of said room before the time fixed for the election, and by persons not stockholders of said company.

Mr. Herrick, the vice-president of the company, testifies that the superficial area of the room called the directors’ room, deducting for table and desk, is 309 square feet, and that estimating three square feet for a man, the said room would hold 103 men. This estimate does not exclude chairs, and it appears that numbers were seated in chairs. It clearly appears, that this room began to be filled preparatory to this meeting, at about half past 11 o’clock.

Mr. Harris testified that he went to the office of the railroad company at about half past 11, accompanied by Mr. James Fisk, Jr., Judge Parker and Mr. Field; that

Mr. Church testified that he arrived at the room about 21 minutes before 12 o’clock; that he went directly to the directors’ room and found it partially filled with people, among them some of our lawyers and inhabitants, and other parties residing on the line of the railroad, and parties connected with the road, and named 28 persons then present whom he then recognized. It also appeared from the testimony of this witness that a meeting was held at the Delavan House the evening previous, (the 6th of September,) composed of Mr. Fisk, Mr. Field, Mr. Harris, Mr. Herrick, Mr. Leonard and Mr. Sherman, and two or three other old directors of the Susquehanna road; that the subject of a stockholders’ meeting to be held the next day was discussed, and who should be inspectors and officers of said meeting was talked about, and it was understood they should meet at the directors’ room the next day at half past 11.

It clearly appears that after the arrival of Mr. Fisk and his counsel and friends among the stockholders, the room rapidly filled, and that when the meeting was called to order by Col. 'North, at about 15 minutes before 12, it was quite full, and by 12 o’clock it was densely packed. And I think it is clearly established that of the persons so filling and occupying said room, from 50 to 60 at least were imported, came or were brought there upon the employment of James Fisk, Jr., or his agents, from the city of New York, who were not stockholders in said company ; many of whom were of a rough, low class of men, such as in common parlance would doubtless be classed among the roughs and fighting men of that city. These men came together in a railroad.car, and arrived in Albany

'The testimony of Mr. Hendrick seems to me to give a fair representation of the actual condition of things in this room at and before the time of the meeting there held. He testified that he arrived at the said office about half past 11 o’clock; that he went first to the directors’ room; that it was then full—in the eastern part overflowing. I had, he said, great difficulty in getting to the front. He was asked, “by what class of persons?” and answered, “they were strangers to me, and the hardest set of men I ever saw in my life. I should think seven-eighths of them were of that character. The room was very full. I think any sensible number of men could not be crowded into the room in addition to the number there.” Of these men it appears forty-four or forty-five were fed in the restaurant, kept at the Union depot, in the northern part of the city, immediately on their arrival at Albany from Hew York, and their breakfasts paid'for by some of the agents of Mr. Fisk. These men were then taken to another restaurant near by, kept by Joseph Clinton, to be furnished with proxies. He describes them as follows: “ They were common laboring men—some of them dressed roughly, and some better. There were men in shirt sleeves, some with blue shirts and overalls. Some had their coats under their arms, and some had no coats.”

Orange Stevens, a witness, called in 'behalf of the Fisk side of the controversy, testified that he was a passenger conductor on the Erie railroad; that he came up from Hew York on the same train with these men; that he gave about twenty of them proxies in a restaurant near the depot of the Susquehanna railroad. Another witness, Pol

Upon the whole evidence upon this branch of the case, I think I am bound to find, as matter of fact, that there was a'preconceived scheme, combination or conspiracy to carry the election of directors appointed to be held at the time and place aforesaid, by the use and abuse of legal process and proceedings, and by efforts and contrivances

And I am accordingly bound to find, as matter of fact and of law, that the election held by Hamilton Harris, Joseph Bush and James Oliver, acting as inspectors, was therefore irregular, fraudulent and void.

There is still another subject for consideration in respect to this election. It was held in distinct violation and disregard of two injunctions issued out of this court and duly served upon the said inspectors. One injunction was issued in the suit of David Groesbeck and others against Jay Gould, James Fisk, Jr., and others.

This injunction required the defendants, Hand, Lathrop and Haskell, inspectors of elections, their successors, substitutes, and all. and every other person who might in any way be appointed or selected, to serve as inspectors of elections, or to hold any election for directors of the Albany and Susquehanna Bailroad Company, absolutely to desist and refrain, until the further order of the court, at any election on the 7th day of September, 1869, or any subsequent day, whenever the plaintiff and the other owners of 3000 shares of said company should be enjoined, or they be forbidden to vote upon the same by any injunction, or order, or judgment, or process of any court; and they were also forbidden to receive any vote, or votes, on the part of the defendants, Jay Gould, Japies Fisk, Jr., Charles Courier, Jacob Leonard, Samuel Horth, Azro Chase, David Wilbur, Alonzo Evarts, Jonathan Herrick, Joseph Bush, Hamilton Harris and James Oliver, in person or by proxy, or as the, proxy or substitute in any wise of any othej’ person, unless the plaintiff and the other holders of .

In The People v. Sturtevant, (5 Seld. 262,) Judge Johnson, in giving the opinion of the Court of Appeals, said that “ the principle is of universal force that the order or judgment of a court having jurisdiction is to be obeyed, no matter how clearly it may be erroneous. It is only when it acts without authority that its orders are regarded as nullities: they are then not voidable, but simply void.”

This election would doubtless have been set aside on a summary application to this court, pursuant to section 5, of title 4, of chapter 8 of the Revised Statutes, part I, on the ground that it was held in distinct violation of this injunction; and I think in this proceeding, where the regularity of the election is in question, the fact that said election was held in violation of an injunction, must be considered.

As upon the grounds above stated, I have come to the conclusion that the election of the Courier and Church set of directors was and is not legal and valid, it follows that the priority of right depending upon the prior organization of the stockholders’ meeting over which Walter S. Church presided is removed, and such meeting is to be regarded in law as if it never had’been held; the conse7 quence of which, upon the views above stated, is that the stockholders’ meeting over which James Hendricks presided was the only regular, legal and valid stockholders’ meeting, held on the said 7th of September; and that the inspectors elected at that meeting were lawful inspectors, and the election held by them for directors of said corporation a legal and valid election.

The argument that Harris, Bush and Oliver were officers.

These views would seem to make it unnecessary for me to go further in the examination of the great mass of evidence given and received in the cause. Much of it was given and received upon the assumption that I might find it necessary to order a new election, and in that event I must determine who would be entitled to vote at such election.

But as the court in this class of questions will seek to subserve, as far as compatible with the law of the case, the interests of the corporation, and, for that purpose, will look to see how the interests of the majority of the stock are to be affected by its decision, I will proceed to state my views in regard to a few of the questions litigated and discussed in respect to this question.

It appears that at the Harris poll there were cast 13,400 votes, and at the Snow poll 10,742. Transfer the three thousand shares improperly voted upon by Fuller, from the Harris to the Snow poll, and it would give the majority to the latter poll.. From the Harris vote 1100 should also be deducted, because the vote was given by commissioners who had previously been removed from office and their places filled by new officers. The certiorari brought to review the proceedings did not restore the old officers, and they had no right to cast the vote of the town. Three hundred shares should also be deducted for the town of Duanesburgh, on the ground that this court at general

The votes upon this stock would have given a great preponderance to the Ramsey set of directors on a single poll. It seems to me quite clear, then, that if there had been a single poll, and the stockholders had voted, and their votes been received according to the stock ledger and transfer books as they stood on the 7th of August, including all such entries and transfers of stock as the treasurer did make or was bound to make, and which he would have been directed by mandamus to make if he had refused, the ticket headed by J. Pierpont Morgan would have been elected by a large majority of the votes of legal and valid stock. And if on the contrary the result had been otherwise, and such result had been brought about by the reception of the votes given by Puller and the rejection of the votes of the true owners of that stock, and the reception and rejection of other stock illegally, including the 9500 shares subscribed for by Hendrick, Hunt and others, this court would have been bound upon summary application to set aside such elections. (Downing v. Potts, 3 Zabriskie, 66. Ex parte Murphy and others, 7 Cowen, 153. In the matter of Chenango Mutual Ins. Co., 19 Wend. 635 .)

The defendant, Jonathan R, Herrick, was not lawfully

Judgment must therefore be given according to these views, adjudging that the Fisk set of directors were not duly elected, and that the Eamsey set were duly elected, and are the legal and lawful directors of said corporation, and further adjudging that the people recover costs in the action, against the corporation, the Albany and Susquehanna Bailroad Company ; and that the complaint be dismissed as against the defendants, Jonathan B. Herrick and Walter H. Burns, without costs, and that all proceedings in the suits mentioned in the pleadings be perpetually enjoined and restrained, and that the same be discontinued by the plaintiffs on both sides, without costs, and the receiverships of Pruyn, Courier and Fisk be vacated and set aside.

The judgment will further direct that the thirteen defendants who are hereby declared to have been duly elected directors of said corporation, headed by J. Pierpont Morgan, and also the defendants, David Groesbeck, Daniel T. Chamberlain, John W. Vincent, Daniel Morrell, Dewitt C. Falls, James M. Boyd, Samuel Sloan, Samuel C. Thompson and Martin Green, recover their costs of this action against the said thirteen defendants headed hy Charles Courter and Walter S. Church, whose claim to have been duly elected directors of said corporation is hereby disallowed. It will he referred to the Hon. Samuel L. Selden, of Bochester, to pass upon the accounts of the receiver; and upon a hearing of the parties at Albany, to ascertain and report to the court what would be a proper extra allowance in the

[Monroe Special Term,

November 29, 1869.

And it will be further ordered that the said directors, so held to be duly elected, be let into immediate possession of said railroad, and that the receiver transfer to them all the property and assets in his hands belonging to said corporation, retaining from the moneys in his hands all proper allowances for fees, expenses and other charges, to be adjusted by said referee.

In conclusion, I regret that other duties forbid the devotion of greater time and reflection to the examination and decision of this most important' cause. It came an exotic to this district, where the judges are full of labor and where the people have no interest in the controversy, except such interest as all good citizens feel in the welfare of the State and in' the maintenance of law, order and good government. It is impossible that any judge could enter upon the trial of a cause of such magnitude, without a deep sense of oppression from the weight of the great resposibility involved in its decision. Including the time consumed in its trial and required for the examination of the case, it has occupied a month of my time, and diverted me from my particular local duties. My duty is now discharged, and a sense of relief arises from the fact that my decision is not necessarily conclusive upon the parties, and, if I have erred in judgment or opinion, thé error is not irreversible.

E.