New-York tribune., 1881-12-29
THE COCR1S.
RETAINING STOCK wRoNGFULLY.


James d. Brewster, Edward p. Burgess ard
Others as shareholders OF the Dunderberg Mining Com
pany recently began an action In the supreme Court
against Walter I. Hatch. Charles h. quincy, j. Warren
Brown and others and the Dunderberg Mining Company
10 conrel the individual defendants to account for
s. 600 shares OF stock, alleged TO have been wrouguP
appropriated by them Tho complaint sets forth that
the defendants I'm 1879 obtained from the plaintiffs sub
scrpdons 70 the stock Of corporation to be organized
by the former which 10 be called the Dundcrberg
Mining Company According 70 the terms OF the sub
,cripon the company TO he organized for the pur
pose OF buying certain mines and odes in Colorado TGs
caDa stock was 70 consist Of 10000 shares OF the par
value of 80 share The entire capital stock TO Do
issued to defendant Warren Brown trustee, in
payment for the mining property proposed be acquired
The subscribers accept the stock subscribed for
by them and pay for it at the rate OF - share In
order 70 carry the subscription agreement the sub
scrutOns 20 be paid Ia Walter + Hatch trustee
for rho subscribers. Nc Hatch 10 pay mo
amount rcce we'd BY HIM 70 j. Warren Brown upon tbs
delivery ny the latter Of deed OF the mining property
10 the Dunderbarg Mining Company ITO he organZoD
and Of Of stock which the subscribers had
taken The plaintiffs and Others upon these terms sub
scrbed for 900 shares OF stock in the company and
the company afterwards ORGANIZED The defendants
were named as trustees MI Hatch for himself and the
other defcndant collected from the subscribers for tho
63 600 shares about $25OOOO and thereupon the entire
capa stock the company sucd to tha defendant.
Brown who Issued these subscribers the scrip for tho
shares for which had severay subscribed but
tanned for himself and the remaining defendants
$4,000 shares Of the capital stock Mr.. Brown
and his associates still hold these $4,000
sborcs or their proceeds. The mining property
was purchased by Mr. Brown for 20OO the whole Of
which sum had been realized by him from the sale %
the 60 shores Of stock referred 10. II Is further
ALLEGED that the plliutids did not know that tho
lining property could be bOugh for less than $GOoO00
the whole amount OF the proceeds ~ the entire capital
stock of the company at - a share. hr. Brown
and his associates fraudulaEtv concealed from tho
about S2iOOn0 anl represented that u could not be
bough for then SG09O OOO and in this way obtained
tho issue Brown ~ the entire capital stock ~ ths
COMPANY 10 heuSed I'm payment cf the purchase
Mr. Brown in fact purchased the property with the
Goods OF me shares and retained for himself and
his associatcs the remaining $4,000
The icfandauts put in u demurrer To the complaint
the ground that did not facts sufficient TO consti
tute cause of action The demurrer was argued before
Justice Van Worst, who Yesterday handed down de-
cison I'm which he holds that the facts are very
clearly sufficient 10 maintain the action. He
cpe of Justice equity the defendants could hope 20
retain for themselves the $4,000 shares Of stock Tor
which they had paid no consideration The approprl+
tion is both 10 the corporation and 10 the stoCk
holders" II maintained for the defendants on the
argum, that uudcr true construction or TIE subscr
tIon agreement It would appear that II was simply a
contract according to which the plaintiffs were 10 pay
given amount Of ana receive given NUMBER OF
shares of stock and that they had more interest IN
the subscrbed for by them than any stranger
to the company.
CALENDARS-THURSDAY DECEMBER %.
SUPREME COURT -Reld ~ Lawrence. J. cal
e,da Cd NJ IN