The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1889-12-04
THH FAIR ASSOCIATION
Now Has an Opinion from Two
Lawyers Regarding That
$4,000 OF NEW STOCK
Which MIR, sweepey secured Sub
scrIbers For, and Which tho
Roard Finally Kicked on Let.
tirggo..Mr, Sweeney talks.

uVtGAhl LleShhR W. Wv NNANA W. 40
rectors Of the State Fair Association was
held at the Public Building yesterday
afternoon. The special purpose Of the
meeting was to hear the opinion oil
Messrs. H. NJ, Russell and l., +, Stiiel, to
whom was referred the question as to
whether the Board has the right to issue
SEA, 900 OF new stock, which some friends
of Mr., John NJ, Sweeney desire to take,
and which the Board empowered Mr.,
Sweeney to dispose Of The opinion
was as follows;
To The Wta PiyeiRia STATE FdG and Expedition
association;
GgSTLEMEN:-As We understand the
situation, your Association was fully
organized some years ago and has been
pursuing your business and acquiring
property which was represented by u
certain number OF shares OF stock that
short time ag0 your Board OF Directors
adopted q resolution that your capital
should be Increased by tue issue Of ad.
ditiOnRl stock 10 tho amount OF S25, 900,
ut par, aud appointed u luember OF the
Board to secure subscriptions 10 this adj
ditional stock, without designating the
person or classes OF persons to whom 1t
should be offered.
"TheEe are respectable authorities
which hold that after the complete
organization OF corporation, It Is not
proper for the Board Of Directors to issue
new stock TO increase tho capital except
upon the terms Of first offering the new
stock to the present stockholders in por'
tions proporlIouatu 10 the stock already
held by them, and that only after the
stockholders have declined to subscribe
can tho directors put such stock upon
the outside market. While such rule
seems Gminently Just and fair, We are
not prepared to assert that under all cir.
CumstanCes 1t would be illegal for the
Board Of Directors to issue stock before
first giving the existing stockholders
an opportunity to subscribe for 1t.
"But we have been advised OF these
further facts: The director who was
appointed the agent Of the Board TO
secure subscriptions to this new stock,
instead OF offering the stock generally IN
the market, undertook himself to pur-
chase the whole issue. With this in
view, he rendered to the Board OF Direc-
tors the cash payment for the whole,
and at the meeting Of the Board at which
he was present, aud in the proceedings
Of which he took part, hiS draft for this
cash payment was under resolutions to
that effect, received and retained by the
corporation pending the taking OF advice
as to the legality Of the transaction,
The effect Of completing this transaction
would be for tho Board Of Directors TO
issue the whole OF this new stock to one
Of their own number, and to do 80 by
action In which that one took part.
at might DO that II all Of the stock.
holders OF your Association should
assent to 1t, such transaction could be
lawfully completed. We think II clear,
however, that II could be set aside at tho
instance OF any stakeholder who might
be dissatisfied with 1t.
III, therefore, you do not feel assured
OF the.unanimous consent OF the stock.
holders, we would advise you TO decline
10 complete the transaction, and to pass
a resolution refusing to issue the stock
to tue director referred to and directing
his draft returned to him. ~
"This might well be followed by a
resolution fixing definite time within
which Che stockholders should have the
privilege OF subscribing to this new
stock Ia proportions corresponding to
their present holdings. Should any
stock remain unsubscribed for at the,
end OF the period, you might properly
allow this to be subscribed for by others
Respectfully submitted,
"RussELL q STiFEL."
Tho oulv oc.;nn taken alter the read.
iug Of the opinion Srsa 10 refer y 70 the
regular stockholders mee... ND'en 10
to be held next Saturday evening.
MIR. Sweeney was seen last evening /
and asked as to what lie had To say
regarding the situation. In reply,
he said, II FIRST want you to read tho
resolutions adopted by tho Board at tho |
meeting held November l." and he
handed over the following:
ReSolred, That the capital stock Of this
Association DO increased S25, 900, at par.
RsSOired, That John NJ. Sweeney is
hereby authorized to secure subsCrip.
tons to new stock issue, 10 the amount |
Of 5000 at par, payable % per cent on
subscription, balance on or before Jan.
uary 10, 1890.
ReSolreti, That the Lilly property be ne.
gotiated for at not TO exceed $780,
and the payments arranged to suit pay.
lnents to bU made Oh new stock sub.
sCription.
"Acting under these resolutions" con.
tinued Mr.. Sweeney, II went to work
and got friends Of mine who have
enough confidence in the future OF |
Wheeling and the Fair Association 10
risk putting in big money, to subscribe
for $25, 600 worth Of stock and pay for II |
at par, when the stock already out can
be bought on the streets for Sli aud So.
Last Friday rendered 10 Secretary
Hook a draft for $3.50, being 25 per
cent OF the subscription, and the follow.
Ing receipt, which | asked him 10 sign"
The receipt shown by Mr.. Sweeney read
as follows:
"WmEELiSG, W. Va, Nov. 30, 1880.
Received Of john NJ. Sweeney, Trus.
tee his subscription for $4,000 to the
capital stock OF the West Virginia Ex.
position and State Fair Association being
by the Board OF Directors at
q meeting held November /, 1880, EN-.
John NJ. Sweeney 10 secure
subscriptions for $4,000 increase TO the
capital stock; and l hereby also az.
knowledge receipt Of $0,95O cash, being
% perCentpaymenton said subscription;
balance TO b. paid on or before January
10, 1890, as per said action OF the Board
Of Directors"
"This," continued Mr.. Sweeney, "Mr.
Hook refused TO sign and also TO take my
draft, unless | would allow Mr. Anton
Reymann $4,000 Of the stock. The
Board had tnGtlU no such stinulatIon
with inc, and refused TO agree 10 h and
demanded that the meeting OF tho board
held last Saturday DO CalleA At tbat
Mr.. Hook was ordered 10 Aim
ibis receipt aud receive my draft which
hu did.
According 10 the opinion Of Russell
4 StiiGl ! have been put In false light;
II Is not for myself | want this stock; |
An merely trustee for those who want
lllo stock and who have paid for IL, III
!, u,,ns Loua, an t,,v lutk I'm. Al ID