Page:The Green Bag (1889–1914), Volume 15.pdf/482

 Wrong Without Remedy: A Legal Satire. boots and shoes. Four of these corporations were chartered under the laws of New York, three under those of Massachusetts, and two each under those of Rhode Island and Nevv Jersey. All of these corporations were pros perous and the stocks were paying substan tial dividends. It cost Anderson twenty thou sand dollars for his holdings, but the mills owned by companies in which he was inter ested were among the largest in the land, and he knew that the trust could not dispense with them. On this consideration he relied for his profits. The proposed consolidation had not be come public property when Anderson had bought, and he had been careful to buy only the stock of men who had little or no knowl edge on the subject of the consolidation, and who had not consented thereto. In a short time thereafter Anderson received a circular letter from the officers of each of his eleven companies, setting forth the terms of an offer which had been made for the properties of the corporation. Several of the letters stated that the scheme had already received the ap proval of a majority of the stockholders, and in each case it had received the approval of the board. The scheme involved an ap praisal of each of the properties and a sale of it to the consolidated company; the latter company was to pay in each case the fu1! appraised value of the plant in paid-up stock of the consolidated company, and one-halt that sum in cash. The consolidated company was bonded for the raising of this cash. The recommendation of the scheme from a busi ness standpoint was twofold: The consolida tion would permit economy in production in a variety of ways and the monopoly of the product would enable the company to sell at a higher price. It was therefore not un reasonable to expect that the stock of the new company would sell at par, and if it did, the consolidation would net a handsome profit to the stockholders in the individual mills.

437

Anderson was duly notified of the several stockholders' meetings, and attended them all, in person or by proxy. In each case he filed with the secretary a protest 'against the proposed consolidation. In nine cases out of the eleven, the consolidation was voted unanimously except for Anderson's stock. In the case of one of the New Jersey corpora tions another stockholder besides Anderson voted "No," and Anderson a few days later bought his stock. At the meeting of the stockholders of one of the New York cor porations there was considerable opposition to the sale, and the matter was postponed to a future meeting. This corporation had been more than ordinarily prosperous and many of the stockholders thought its plant should be valued more highly for this reason. The promoters of the consolidation exerted them selves busily to whip this opposition into line. They bought some of the stock out right and gave other stockholders a large cash consideration to vote in favor of the consolidation. They finally settled with all but Anderson; he refused to sell his stock at three times what it had cost him, and they decided to go ahead with the consolidation without his consent. As each of these stockholders' meetings adjourned, Anderson brought a suit in equity against the corporation and its officers, pray ing that they be enjoined from selling to the new corporation. His application for a pre liminary injunction came on first for hearing at Elizabeth, N. J. Anderson cited 2 Cook on Corporations, 670; Kean v. Johnson, 9 N. J. Eq. 401, and Mills v. Central Railroad, 41 N. J. Eq. i, by which he showed that it had been settled law in New Jersey for a generation that the directors of a corpora tion, even where authorized by a majority vote of the stockholders, had no right аз against a single dissenting stockholder to sell all the assets of a prosperous, dividend-pay ing corporation and put it out of business. This, he showed, was particularly true where