Anderton, Jr., agt. Aronson.

that Mr. Seligman, the treasurer, found from the books that that amount was correct. The apparent amount of profit, according to Randall, was $52,285.50. Mr. Randall was of the opinion that several items which had been charged to the construction account should properly have been charged to the expense account. But even if deductions from the amount of apparent profit on account of items fairly chargeable to the expense account should be made, it would seem that a profit of more than $24,661.94 would remain, which would entitled Rudolph Aronson to a profit of $12,330.97, or more than the par value of the stock actually allotted to him.

The testimony also seems to me to establish that whatever irregularities there may have been in the system of keeping the books of the Casino, such books were kept straight and honestly, although confusedly and irregularly.

I think the preponderance of the evidence is in favor of the defendants upon this point, and that as the contract with Rudolph Aronson must be held to have been ratified by the previous action of the stockholders, he would be entitled to receive the shares of stock which were awarded to him at the meetings of July 31st and August 16, 1884, and he, or his assigns, would have been entitled to vote thereon at the annual meetings on the 22d of September, 1884, if those meetings of the directors were properly held.

It appears from the minutes of the meeting of July 31, 1884, that there were present Rudolph Aronson, the president, in the chair, and Messrs. Fish, A. Aronson, Seligman, Weber, O'Sullivan, Doty and Myers. It does not appear that Rudolph Aronson abdicated the chair, nor that any of the proceedings were had without his presence. The same remark may be made as to the meeting of August 16, 1884. Rudolph Aronson presided at that meeting, and there were present Messrs. Seligman, O'Sullivan, Weber, A. Aronson and N. Myers.

The names of the parties who voted on the resolutions then adopted are not given.

Anderton, Jr., agt. Aronson.

I am of the opinion that the presence of Rudolph Aronson at those meetings vitiated the action of the directors in respect to all matters which related to his individual interests. If authority is necessary for this conclusion, the able opinion of justice VAN BRUNT in the case of the Metropolitan Elevated Railway Company agt. Manhattan Railway Company (14 Abbott New Cases, 103, 293, 294), may be cited. In that case, the learned justice, after an elaborate review of numerous cases, at page 293, says: "The rule, therefore, seems to be clearly established that the question of minority cannot be considered in determining the right in equity to avoid a contract. The presence of one disqualified director is just as fatal to action which cannot be repudiated as the existence of a dozen. It being impossible to ascertain the amount of influence which each director exerts, or which he fails to exert in opposition to action in which he is interested, the only rule which can be adopted, or which can be applied with any certainty, is that if there is even one director who is disqualified, the whole action of the board is subject to repudiation" (see also Butts agt. Wood, 37 N. Y., 317).

Unless, therefore, the action of the directors at those meetings has been ratified by the stockholders, the issue of the 246 shares of stock to Rudolph Aronson cannot be upheld by a court of equity.

The annual meeting of the stockholders was held on the 22d of September, 1884. The minutes show that at that meeting 2,900 out of 3,000 shares were represented, and that it was resolved, on motion of Mr. McCaull, that "a committee of five, consisting of Messrs. Roosevelt, Kemeys, Kohlsadt, Seligman and King, be appointed to examine the books and vouchers pertaining to the construction and management of the Casino, since its organization, and also the treasurer's report, and report to a meeting of the stockholders to be held November 11th, at four o'clock, at the Casino, and that said committee are authorized to employ. an expert in the examination of the books of the company, and

Anderton, Jr., agt. Aronson.

that all said books shall be open to them." Mr. Seligman declined to serve upon the committee, but the other gentlemen accepted, and on the 11th of November, 1884, submitted their report to the stockholders, in which they recommended a modification of the contract with Rudolph Aronson, so that instead of receiving one entire half of the net annual proceeds in addition to his salary, he will be entitled to one-half of such net proceeds, after the payment of the dividends, on the stock, as provided in such contract, but not to exceed the sum of $6,000 in addition to his yearly salary, except, however, that if such profits shall exceed the $6,000 of his salary, $6,000 additional net profits to his share, six per cent dividends on the stock and $6,000 for the share of the company, that then and thereafter he shall receive twenty per cent of such additioual profits. The committee also recommended that in view of this action on his part the contract made heretofore with him, the division of profits, the issuing of stock to him therefor, and as promoter of the enterprise, and his management generally be approved, and that that said contract be extended two years beyond its present termination.

The committee also reported that no imputations should rest on any one, for the disappearance of the minute book, and sustained the issue of the stock made to Rudolph Aronson on October 19, 1881. They also reported upon the contract of September 10, 1881, and reached the conclusion which the court upon the trial has reached after hearing all the evidence, that the erasures therein contained were not made with intent to deceive. They also reported upon the issue of the stock on the 16th of August, 1884, and they submitted a resolution embodying their views, and recommending its adoption by the stockholders.

The report of the committee was adopted at this meeting. It does not appear, from the minutes of that meeting, how many of the stockholders were present. There seems to have been a very full attendance, and a very animated discussion as to the

Anderton, Jr., agt. Aronson.

matters which came before the meeting, but the number of shares represented is not given, and I am unable to determine, therefore, whether a majority of all the legal stockholders was present. A motion was made to ascertain whether a quorum was present, and it was put and declared to be lost.

The plaintiff denies the regularity of the proceedings at that meeting, and claims that the resolution submitted by the committee was not adopted by a majority of the legal stockholders. Neither Aronson nor his assignee had a legal right to vote upon the 246 shares issued in August, 1884, because one of the questions before the meeting was, whether the issue of those shares should be approved of and ratified. I cannot, therefore, say! that the stockholders have ratified the action of the directors at the meetings of July 31st and of August 16, 1884.

The action of the stockholders' meeting of November 11, 1884, was, on the 19th of November, 1884, approved of at a meeting of the Board of Directors, but as Rudolph Aronson was present, and there would have been no quorum without his presence, the action taken at that meeting does not aid the defendants in this case (Butts agt. Woods, 37 N. Y., 317, and opinion of VAN BRUNT, J., in the Elevated Railway Cases).

For the reasons above stated, I am of the opinion that the action of the directors of the New York Concert Company (limited) at the meetings of July 31st and August 16, 1884, in respect to the stock of said compnay directed to be issued to Rudolph Aronson, was illegal, and that the action of the said directors, as to the extension of the contract with said Rudolph Aronson, was also illegal, and as it does not affirmatively appear that a majority of the stockholders have ratified the issue of said stock and the approval of said contract, the plaintiff is entitled to judgment, declaring such stock to have been illegally issued, and that the same is void in the hands of Rudolph Aronson, and of his assignees, and also that the extension of the contract with him is illegal and void.

Upon the trial, I understood the counsel for the defendants: to contend that, as Mr. Rothschild and the others, to whom a

Harper et al. agt. Shoppell.

part of the stock had been assigned, gave value therefor, they might stand in a better position than Aronson in respect to such stock, but as they took, subject to all the equities between Aronson and the company or its stockholders, I do not see how that contention can be maintained.

Let findings be prepared in accordance with these views, and settled on five days' notice.

UNITED STATES CIRCUIT COURT.

HARPER et al. agt. SHOPPELL

Copyright-What is not an infringement.

The unauthorized reproduction and sale of a copy of a cut from a copyrighted book or weekly paper is not an infringement upon such copyright.

February, 1886.

Bangs & Stetson, for plaintiffs.

J. W. Hawes, for defendant

WALLACE, J.-The plaintiffs sue at law for an infringement of copyright, and the case has been tried by the court, a jury having been waived. The defendant has not intentionally infringed the plaintiffs' rights, and therefore nominal damages only are claimed. The conceded facts are as follows: The plaintiffs are the proprietors of Harper's Weekly, a copyrighted illustrated newspaper, published weekly, and in March, 1873, they published in that newspaper an impression of a cut entitled "Getting Married, Keeping House," which formed a prominent and considerable part of the newspaper. The cut was made and designed by one Reinhart, a citizen and resident of the United States, who sold it to the plaintiffs. They have never