Wrong Without Remedy: A Legal Satire.
527
in both corporations. The defendant cor of another corporation; at least it could only porations promptly appeared and moved to guarantee such debt for a legal and valuable quash the injunction. In clue time the motion consideration moving to the corporation giv came on for hearing. The small ness of An ing the guaranty. In support of these con derson's stock-holding was emphasized by tentions he cited Davis v. Old Colony Rail the defendant's attorney, and Anderson's road Company, 131 Mass. 258; Reese's Ultra motives in starting the suit were impugned. Vires, 136; Cook on Corporations, 775, and Counsel cited Laurnan v. Lebanon Valley Morawetz on Private Corporations, 423. Railroad Company, 30 Pa. St. 42, wherein it What consideration moved to the Pittswas held that two railroad companies might burg Northeastern to support its guaranty of consolidate lawfully, provided the dissenting the payment of these rentals by the Alleminority stockholders were given fair value ghany and Northern? There were but two for their stock in cash. He produced a written answers which could be given to this ques offer signed by one of the officers of the tion: Either there was no consideration; or Pittsburg Northeastern to buy Anderson's the consideration was the destruction of com petition, which he expected to be able to stock in both companies at whatever the court might deem its value, and he also pro show, was an illegal consideration and the duced a bond in the sum of fifty thousand guaranty should therefore be enjoined. This led him to discuss Anderson's stand dollars, executed by a surety company of ap ing as a stockholder of the Buffalo and Alleproved solvency, guaranteeing that the funds would be forthcoming on demand to effect ghany. He showed that as such stockholder Anderson had standing to enjoin an unlawful this purchase. Anderson's counsel in reply did not notice consolidation or a lease whereby unlawful the aspersions on his client's character and consolidation was to be accomplished. On motives further than to say that the question that point he cited Taylor on Private Cor before the court was one of law. Anderson porations, 536; Cook on Corporations. 494; Mowrey v. Indianapolis Company, 4 Bissel might be a good man or a bad man; the 78, and Mills i>. Central Railroad, 41 N. J. record did not disclose which; that was not the question. Anderson, whatever his char- j Eq. i. acter, had certain rights as a stockholder in This brought him to the question of these two corporations. The question was whether this consolidation was lawful. He whether he was entitled to enjoin the execu easily showed that unless the deal were ention of this lease and the guaranty of the ' joined, the Pittsburg Northeastern vould lessee's agreement to pay rentals. He con control the road of its competitor, the Buf tended that as a stockholder in the Buffalo and falo and Alleghany. The latter railroad com Allcghany Anderson had standing to enjoin pany would cease to perform the public ser the lease and as a stockholder in the Pittsvices which were the consideration for the burg Northeastern he had standing to enjoin grant of its franchises and would cease in fact the guaranty. He cited Morawetz on Pri to transact any business whatever. This, he vate Corporations, Section 423, to the effect showed, was contrary to public policy; a rail that the directors and even the majority of road company could not be permitted to the stockholders have no right to give away abandon its public functions or to cease the the corporation's money. He contended that operation of its road without express statu no corporation, except one formed for the tory authority for such purpose. On this express purpose of engaging in the guaranty point he cited Thomas r. Railroad Company, business, had a right to guarantee the debt IOT U. S. 71; Oregon Railway Company v.
