Nature of the Case
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Facts
P was incorporated in 1876, under the General Manufacturing Act of this state, for the purpose, as expressed in the certificate of incorporation, of manufacturing and selling pianofortes and other musical instruments. The business was one of large proportions, which had for many years been conducted by the Steinway family as a copartnership, and the change which was effected by the incorporation was one of form rather than of substance. It continued to be the same in its object and purposes, and under substantially the same ownership and control. The incorporators were the copartners, William Steinway (D), and his brothers, C. F. Theodore Steinway (D) and Albert Steinway (D), by whom all of the assets of the firm were transferred to the corporation in exchange for the greater part of the capital stock, which was fixed at $1,500,000. Among these assets were some 400 acres of land, situated at Astoria, and within the limits of Long Island City, in Queens county. The principal factory and field of mechanical operation was in this city, but it was designed ultimately to transfer the entire manufacturing plant to Astoria. This policy was inherited. The plan was that the growth and expansion of the business would require larger accommodations and also that provision could be made for gathering together, as residents upon the property, the large number of employees in their service, under conditions and influences of exceptional advantage to them and their families, and thus promoting better and more permanent service on their part in their relations to the business. At the time this property was taken over this policy was in the course of execution; a portion of the manufacturing was carried on there, and some houses had been constructed in which employees of the company resided. At present the manufacturing part of the business is almost exclusively located there, and a very large proportion of the employees live on the property in proximity to their work, either in houses owned by the corporation or which they have acquired themselves by purchase from the corporation. D has also, at a very moderate expenditure, contributed specific property and money toward the establishment of a church, a school, a free library, and a free bath--all agencies the usefulness of which in the development of the best industrial results of a community is fully recognized. The employees are skilled operatives, who have been permanently in the service of the company for many years in harmonious relations with their employer, which have been practically uninterrupted by strikes or suspension of business for any cause. It may be fairly inferred from this that this policy of the company in dealing with its operatives has been a wise one, and apart from its moral aspects has materially contributed to the resources of the corporation. The trustees of D have from time to time authorized the expenditure of money in regulating several streets or avenues running through the property, and in the construction of sewers and the supply of water. At the time the property was taken over by D, it had been laid out as a part of the city in which it is, with streets and avenues, and had been subdivided into lots. P contends that all of the disbursements saving only those immediately connected with the works and plant, were improper and not within the competency of the trustees to sanction; that the corporation was actually engaged in an extensive land business, which was outside of its chartered powers; and that the contributions made toward the church, library and kindred enterprises to which I have referred were likewise without authority in law.
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