Page:Federal Reporter, 1st Series, Volume 10.djvu/434

 422 FEDERAL REPORTER. �theniselves to others/and actually receiving from sueh strangers to the orig- inal transaction large sums for the privilege of assuming biirdens they coukl not discharge, and whieh could only resuit in the restoration to them of the property leased, and the absolute loss by the buyers of Manhattan stoclc of their whole purchase price. io recover payment for this stocli from the two lessor compauies an action is now pending in the United States circuit court for the southern district of New Yorls, brought by John C. Watson, a stocliholder of the Manhattan Company, to which suit, by permission of this court, the receivers appointed in this action are parties. The existence of this action, and the grave questions which it presents, aro urged both by the Man- hattan Company and the receivers as reasons why, in advance of the deter- mination thereof, this court should not surrender the property it holds by its receivers. It would, perhaps, be improper to express an opinion upon the merits of this action further than to say that it presents reasonable grounds for judicial inquiry. As a rule, stock purchased of a corporation must be paid for either in cash or its equivalent, and, if not so paid for, the money which it representa can be recovered. The answer of the petitioning company is, of course, that the stock was paid for by the lease which it gave. Whether, how- ever, this was a bona flde exchange of a substaiitial thing vvliich the law can treat and regard as a payment for the stock transferred, or the contrary, is the point which that suit presents. Leaving out of view the very grave ques- tions of the power of the lessor companies to lease its roads, and of the lessor company to accept them, — which is not considered, because iiot presented nor argued, but which leases, if illegal, because ultra vires, would leave the stock of the Manhattan Company entirely unpaid for, — is it not most apparent that the innocent holders and purchasers of the stock of the Manhattan Company have grave questions to submit to the courts, both as against the lessor companies and also their stockholders, who placed the Manhattan stock upon the market to their great injury? It is enough for present purposes, without passing directly upon the merits of the AVatson suit, to say that that which is unjust is nnlawful, and for every unlawful act done to another to his injury the law affords a remedy. Whether any of the apparently bald facts which have been mentioned can be explained so as to give them a different color, is a question for the trial. As they appear upon this motion to me, it is plain that they should not be ignored, and the property asked for surrendered upon the ground of the non-payment of obligations incurred by the lease, when, perhaps, a trial of the action pending may determine that the Manhattan Company is not a debtor to, but a crediter of, the petitioner." �After thus reaching a conclusion on the merita adverse to the relief sought, the judge held that, as the application was one ad- dressed to the discretion of the court, and as it involved grave and diffieult questions of law and fact, it ought to be disposed of by an action, and not by a motion. He added: �"To the general objection of deciding such grave questions as this applica- tion involves so summarlly ig added one growing out of the tripartite agree- ment hereinbefore detailed. A sort of quasi partnership was thereby formed ��� �