Ryan v. Williams

• Citation: 100 F. 172
• Parties: RYAN v. WILLIAMS et al.
• Decision Date: 15 January 1900
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

100 F. 172

RYAN v. WILLIAMS et al.

United States Circuit Court, E.D. Virginia.

January 15, 1900

Bernard Carter, W. L. Marbury, W. H. Page, Jr., and D. Lawrence Groner, for complainant.

Cowen Cross & Bond, Leigh R. Watts, Henry & Williams, L. L. Lewis and Edgar Allan, for defendants.

WADDILL District Judge.

This cause is now before the court upon an application for injunction, and heard on bill, answers, affidavits of witnesses, and the exhibits filed. The answers deny generally the allegations of the bill, and particularly that anything has been done or contemplated detrimental to the interests of the complainant, or of the company in which he is largely interested; on the contrary, respondents insist that the complainant has been greatly benefited by what has thus far transpired, and that his interests will be yet further enhanced if their plans and purposes are not interfered with. They deny all manner of wrongdoing imputed to them by the complainant, and aver that, so far from having done anything of which he could justly complain, they have exhausted every effort to harmonize with him, and secure his co-operation and, failing in that, to have him name a figure at which his holdings could be obtained. The complainant admits, for the purposes of this motion, as to material matters in which the averments of the bill are positively denied by the answers and affidavits filed, until proof is taken the court cannot grant the relief asked. But he insists that upon the pleadings according to the defendants' own showing an injunction should now be awarded: First. To restrain the Seaboard & Roanoke Railroad Company,, its officers and agents, from entering into any agreement to consolidated, or do anything to consolidate said Seaboard & Roanoke Railroad Company with or merge it into any of the corporations named in the bill, or from in any manner becoming a party to or doing anything to accomplish the scheme of consolidation therein mentioned, or consenting to, permitting, or allowing any mortgage to be placed upon the property or franchises of the said Seaboard & Roanoke Railroad Company for the purpose of securing any bonds that are to be issued as a part of its said scheme of consolidation; the consolidation of the roads sought to be prevented by injunction being those of the Seaboard Air-Line System, containing some 1,000 miles of road, the Georgia & Alabama Railway, about 457 miles, and the Florida Central & Peninsular Railroad Company, some 978 miles, aggregating 2,435 miles. Second. To restrain the said Seaboard & Roanoke Railroad Company, its officers and agents, from making sale of, or doing anything to consummate or perfect a sale of 7,422 shares of stock of the Raleigh & Gaston Railroad Company, owned by said Seaboard & Roanoke Railroad Company, and alleged to have been sold to Middendorf, Oliver & Co., and to enjoin and prohibit the defendant J. W. Middendorf from doing anything in his individual capacity, or as a member of the firm of Middendorf, Oliver & Co., mentioned in the bill, towards the consummation of any sale made to him or his said firm of said 7,422 shares of stock, and from accepting any transfer or assignment of the certificates of said stock to himself or his said firm, and, if already issued to either, to enjoin and restrain them from making any sale, assignment, or transfer thereof. To the consideration of these two questions I shall address myself. The complainant seeks the intervention of the court as a majority stockholder in the Seaboard & Roanoke Railroad Company (one of the roads in the Seaboard Air-Line System), and insists that the 7,422 shares of stock held by that company in the Raleigh & Gaston Railroad Company, alleged to have been sold to Middendorf, Oliver & Co., gave it the lawful control of the latter road, and in that way the control of the entire Seaboard Air-Line System; his contention, in effect, being that, the defendants Williams and Middendorf and their respective firms, and a syndicate controlled by them, having acquired control of a majority of the stock of the Seaboard & Roanoke Railroad Company, improperly voted the stock owned by that road in the Raleigh & Gaston Railroad Company, and subsequently improperly sold said 7,422 shares, whereby the Seaboard & Roanoke Railroad Company, in which the complainant was largely interested, lost control of the Seaboard Air-Line System, and that said Williams and Middendorf and their said firms and syndicates further proposed to consolidate the roads of the said Seaboard Air-Line System, a most valuable property, regardless of his (complainant's) rights, with the Georgia & Alabama Railway and the Florida Central & Peninsular Railroad Company, as aforesaid, two undesirable properties, which they also owned, and in which the complainant had no interest, to the virtual destruction of his property. The complainant insists that the interests of Messrs. Williams and Middendorf, and those acting with them, in reference to the three railroad systems sought to be brought into consolidation, are such as to make said Williams and Middendorf, and the present representatives of the majority of the stockholders in the said Seaboard & Roanoke Railroad Company, improper persons to act in that capacity; that their duty, as officers of the Seaboard & Roanoke Railroad Company, is entirely incompatible with that of directors and managers of the Georgia & Alabama Railway and the Florida Central & Peninsular Railroad Company and controllers of the syndicate owning said roads, it being manifestly to the interests, as complainant claims, of the two last-named roads to become a part of the valuable Seaboard Air-Line System, controlled and owned, as he claims, by the Seaboard & Roanoke Railroad Company, and that they, said Williams and Middendorf, having combined to constitute themselves a majority, in order to control the said Seaboard & Roanoke Railroad Company as they see fit, are, for all purposes, the corporation itself, and assume the trust relation occupied by it to its stockholders. In support of this position, complainant cites, among others, the following authorities: Ervin v. Navigation Co. (C.C.) 27 F. 625; Farmers' Loan & Trust Co. v. New York & N.R. Co., 150...