Railway Company v. Allerton
| Decision Date | 01 October 1873 |
| Parties | RAILWAY COMPANY v. ALLERTON |
| Court | U.S. Supreme Court |
APPEAL from the Circuit Court for the Northern District of Illinois; the case being thus:
The Chicago City Railway Company was a corporation owning a street railroad in Chicago. The directors of the company, without consulting the stockholders or calling a meeting of them, resolved to increase the capital stock of the company from $1,250,000 to $1,500,000. To this one Allerton, who was a stockholder, objected, and filed a bill praying for an injunction to prevent the increase. His position was that it could not be lawfully made without the concurrence of the stockholders, and in support of this view he relied upon the constitution of Illinois, adopted in July, 1870, by the thirteenth section of the eleventh article of which it is declared as follows:
He also relied on an act of the legislature of Illinois, passed March 26th, 1872, to execute and carry out the above provision of the constitution, by which, amongst other things, it was enacted that no corporation should change its name or place of business, increase or decrease its capital stock, or the number of its directors, or consolidate with other corporations, without a vote of two-thirds of the stock at a stockholders' meeting.
The railway company, in its answer, relied upon its charter, granted February 14th, 1859, the third and fourth sections of which were as follows:
The position of the company was that the third section conferred an unrestricted right to increase the capital stock at will, and that the fourth vested this power in the board of directors, and that the constitutional provision and act above referred to, if applied to this corporation, would impair the validity of the contract. It was further set up, however, that the said provision did not apply to railways worked by horse-power. The court below decreed in favor of the complainant and the company took the present appeal.
Mr. Charles Hitchcock, for the appellant; Mr. E. A. Storrs, contra.
Without attempting to decide the constitutional question, or to give a construction to the act of the legislature, we are satisfied that the decree must be...
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