Cass v. Manchester Iron & Steel Co.

• Decision Date: 27 December 1881
• Citation: 9 F. 640
• Parties: CASS v. MANCHESTER IRON & STEEL Co. and others.
• Court: U.S. District Court — Western District of Pennsylvania

9 F. 640

CASS v. MANCHESTER IRON & STEEL Co. and others.

United States Circuit Court, W.D. Pennsylvania.

December 27, 1881

George Gray and Knox & Reed, for complainant.

Hampton & Dalzell, for respondents.

McKENNAN C. J.

The Manchester Iron & Steel Company is a private corporation authorized by an act of the legislature of Pennsylvania passed April 29, 1874. By the certificate of its incorporation it is placed in the class of corporations for profit, and under the seventeenth division of that class, as a corporation for 'the manufacture of iron or steel, or both or any other m5tal, or of any article of commerce from metal or wood, or both. ' Its powers, therefore, are derived from and are defined by the thirty-eighth section of the act, which relates specially to corporations of that description. The first clause of that section, which is the only portion of it that is material, provides that--

'Every such corporation may, in the manner prescribed in this act increase its capital stock to an amount not exceeding $5,000,000, and shall have the right to purchase, lease hold, mortgage, and sell real estate and mining rights, to prove and open mines, to mine and prepare for market, or for their own use and consumption, coal, iron ore, and other minerals, and to erect and construct furnaces, forges, mills, foundries, manufactories, and such other improvements and erections as they may deem necessary, and to manufacture iron and steel, or any other metal, or either thereof, in all shapes and forms, and either of these metals, exclusively or in combination with other metals, or with wood, and to transport all of said articles or any of them to market, and to dispose of the same, and do all such other acts and things as a successful and convenient prosecution of said business may require, provided they shall not, at any time, have more than 10,000 acres of land within this commonwealth, including leased lands.'

The organization of the company defendant embraces a president and four directors, of whom the complainant is one, and represents, in his own right, a majority of the stock issued by the corporation. In that character he files his bill, alleging that the annual election of directors by the stockholders is to occur on the nineteenth of January, 1882, and that a majority of the board of directors have determined and propose, against his protest, before the annual election, to lease the whole plant of the corporation ?or a term of not less than five years, with an option in the lessee to purchase the premises at a price to be fixed in the contract. He therefore asks the intervention of this court to restrain the proposed action of the directors.

The respondents admit that they propose to lease the property of the corporation to a responsible tenant for a term of not less than five years and not exceeding ten, at an annual rental of not less than $20,000, with additional incidental payments to be made by the lessee, and they allege that the completion of this arrangement requires prompt action on their part, and that it was, in the highest degree, conductive to the interests of the stockholders.

In the view we take of the case, it is unnecessary to consider whether the contemplated lease is expedient or not. Under ordinary...