
    McVicker vs. Ross and others. Harris vs. The Same. Williams vs. The Same. In the matter of Haskin vs. Ross and others. Fargo and others vs. Blatchford and others.
    In case of the consolidation of two joint stock companies, although a dissenting shareholder, like a retiring partner in an ordinary partnership, is not obliged, in the absence of an express agreement to that effect, to surrender his interest in the property to his remaining associates at an estimated valuation, but has the right to have the valuation actually ascertained by a sale, in the ordinary manner of closing up partnerships where there is no express stipulation; yet where the amount of dissentient stock is quite inconsiderable, in comparison with the stock whose owners have acquiesced in the agreement of consolidation, the court will order the consolidated company to give a bond with sureties, conditioned that, upon the final judgment, all the property transferred to it shall, if so required by the judgment, be delivered into the custody of the court, for the protection of all the shareholders.
    Dissenting stockholders have no absolute right to have a sale at the commencement of the litigation, as soon as the property has been handed over to a receiver. If they are entitled to have the property sold, their right is to have it sold when they have recovered judgment.
    All that they can claim is, that the property shall be preserved dntil judgment, so that their rights, as then ascertained and declared, may be enforced.
    MOTION, in the first three cases, for the appointment of a receiver of the property of the Merchants’ Union Express Company, and in the first four cases for an order removing a receiver of a certain portion of such property, who was appointed by an order made in the fourth action.
   Cardozo, J.

In the first three of the above entitled cases, a motion is made to appoint a receiver of the property of the Merchants’ Union Express Company, and in them and in the matter fourthly above entitled, I am asked to remove Mr. William F. Allen from the position of receiver of a certain portion of such property, to which he was' appointed by an order made in the suit of Haskin v. Ross, &c. I have concluded to deny these applications, except as hereafter stated, for the following reasons:

I think that at this stage of the litigation the relief¡ sought is, under the circumstances, unnecessary for the full protection of the plaintiffs, and would be a needless ■ hardship upon some of the defendants. The amount of dissentient stock is quite inconsiderable, in comparison with the large amount of stock which has acquiesced in the agreement of consolidation; and while I am of the opinion that a dissenting shareholder in these joint stock companies, like a retiring partner in an ordinary partnership, is not to be obliged, certainly, at all events, in the absence of express agreement to that effect, to surrender his interest in the property to his remaining associates at an estimated valuation, but has the right to have the valuation actually ascertained by a sale in the only manner recognized by law for closing up partnerships in the absence of express stipulation; yet the great disparity between the amount of stock assenting and that dissenting, and a just regard for the interests of all the parties concerned in the consolidated company, lead me to the conclusion that such an order should, and I think can, now be made, without disturbing the present condition of affairs, as will make every discontented shareholder perfectly safe until a final decree can be made, settling and adjudging definitely the rights of the parties.

With that view, while denying the motion for a receiver, and vacating the injunction issued, except so far as to prevent any attempt to forfeit stock of dissenting shareholders, I shall do so only on condition that the defendants furnish a bond with sureties, to be approved by one of the justices of this court, conditioned that, upon the final judgment, all the property which belonged to the Merchants’ Union Express Company, and which was transferred to the consolidated company, shall, if so required by the judgment, be delivered into the custody of the court, through such officer for that purpose as it may appoint ; and also that in case by use, lapse of time or otherwise, any of the property shall have diminished in value, then to make the same, by a payment in cash, up to the full value to be ascertained as hereinafter mentioned. This, I think, will protect everybody, without doing harm to any one. The plaintiffs have no absolute right, though it is very common, and indeed most usual to do so, to have a sale at the commencement of the litigation, as soon as the property has been handed over to a receiver. Their right, if they are entitled to have the property sold, is to have it sold when they have recovered judgment. All that they can claim is, that the property shall be preserved until judgment, so that their rights, as then ascertained and declared, may be enforced.

I do not understand the case of Spicer v. Haresceup, decided by udge Daly on. BOth April, to which Mr. Sewell invited my attention, after the argument, to conflict with the general rule that a sale is the only method of closing up a partnership, if the partners cannot agree among themselves upon a division, or some other method. I understand Judge Daly to have done substantially what I have determined to do here. He obliged the defendant to give security, so that the plaintiff should be safe when final judgment was obtained.

To carry my views into effect, there must be a reference to James M. Sweeny, to ascertain and report all the property of every name and description, and the value of each item, which belonged to the Merchants’ Union Express Company, and which was transferred to the consolidated company. And upon the coming in of that report, I will fix the amount of the bond which the consolidated company must give as a condition of retaining the property pending the litigation; thus in effect constituting them receivers pendente lite.

I have intentionally avoided expressing any opinion on the merits, or on the various questions discussed before me'; believing that in the view I have taken.of the present necessities of the case, I ought to leave them to be disposed of upon a regular trial.

Eespecting the application to remove Judge Allen from, the partial receivership which he holds, I think it is sufficient to say that while I do not mean to be understood as approving the method which the parties took to procure that receivership, yet in view of the fact that the receiver is the officer of the court, and under its control, and that the gentleman who holds the position is personally wholly unobjectionable, and might very well have been selected for such a trust, in a perfectly proper and legitimately conducted proceeding, I do not think that it is necessary for me to make any change, at present. This leaves only the case of Fargo &c. v. Blatchford &c., in which the plaintiffs seek to have the consolidation agreement confirmed and to restrain the suits brought to impeach it, and in which they ask the continuation of the preliminary injunction which has been granted.

It may be doubted whether that action can be sustained, but I do not think it necessary to determine the question ; because, after the disposition I have made of the other cases, and in view of the fact that the defendants in this suit can obtain any affirmative relief that they may show themselves entitled to, whether of the character demanded in their complaints in the other cases or otherwise, and that the litigation will be presented in a more convenient form than if conducted in many suits, no harm can be occasioned by-continuing the injunction in this case, and therefore I think it best not to interfere, on a mere motion, with the temporary order, but to leave the defendants to the more solemn and regular course of a demurrer, if they see fit, instead of litigating the whole merits of the controversy, as they can do, in the convenient form which the plaintiffs afford them by this action, to insist upon their right to a determination of the legal objections which they raise to the complaint.

[New York Special Term,

August 2, 1869.

An order to carry these views into effect may be prepared by either party, and may be settled on notice, and either party may make such suggestions for my consideration as he may desire, respecting the provisions of the bond and the order of reference hereinbefore mentioned.

The costs of the motions will be taxed in the causes, and abide the event thereof.

Cardozo Justice.]  