The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1891-06-17
COQUARD'S MINING CASE.
Litigation Arising Out Of the Sale Of
the West Granite Conn
pany.
A Question as to What Has
Become of Coquard's
Shares.
Equalixatioh Statistics Required Of Assess-
ors-J Judgments in the District
Court.

ors-Judgmcnts in the District
Court.
There ia a suit pending in the United
States circuit court here of considerable In
terest to people connected with mining
companies. The case is that of l.. A. Co
guard, a well-known mining man of st.
Louis. arising out of the sale of the West
Granite Mining %company's properties to n
syndicate and the organization of the Eliz-
abeth Mining company. Final determine
tion of the controversy has not been reached
yet, but the attorneys have outlined the
points wherein the parties to the suit differ.
II. A.. g. II. A. Glover, OF st. Louis, and Mo-
Connell g. Clayberg, of this CITY, represent
Coquard. Some of the points they make in
their brief are as follows: Our bill of
complaint alleges and the demurrer admits
that on March 20, 1889, he trustees
of the West Granite Mountain Min
ing company entered into a contract with
Lewis M. Rumsey, Moses Rumsey, Charles
J.. Clarke. Chas. ID. Mcclure, Augustus Il.
Ewing. Paul A. Fusz. John j. Taussig,
Wernse and Dieckman, A. j. We'll, Anton
M. Hotter md Henry M. Parchen, as a syn-
dictate for the purchase of the entire prop
erty of the West Granite company, and
that at the time of making the contract
Hotter and Parchen, defendants herein,
we're both member of the board of trustees
of the West Granite, as we'll as members of
the syndicate, making the proposition to
the trustees, and that they acted us such
trustees in the acceptance of the PROPOSE
ton made by the syndicate, and in enter
ing into the contract with the syndicate. 1t
is true that the proposition 30 made WAS
afterwards ratified by q large majority of
tho stockholders at a subsequent meeting,
against the vote, protest and objections of
Coquard. and as thus appears, the convey
ance of the entire property of the West Gran
tie company smade to the trustee of the syn
dictate. for the sum of about $15O,00O, and
a new corporation is formed, styled the
Elizabeth company, with the same amount
of shares as the old company, SOC, 1000, of
which 25O, 600 are taken and held by the
syndicate, and the other 250,OOO are dis
tributed to the stockholders of the old
company in the proportion of one for two.
Thus the syndicate composed of eleven
members receive in equal, or other proper
ton, as agreed upon, 10000 shares of the
new company, thus becoming owner and
acquiring the same property and none
other, as held by the old company, or one
half thereof, and the remaining 25O,O 600
shares of stock are distributed in the pro-
uAAOA w V1o hVOChaO1OOAb
of the old company who may choose or
elect to come in membership in the new
corporation.
"All the members of the syndicate stock
holders in the old mpan and two of
them. az we'll, Hotter and Pnrchen, trustees
of The old corporation. Mere mathemate-
cal calculation shows that the syndicate
stockholders and trustees thus purchase
10000 shares Of stock in the new company
at sixty cents q share. # Messrs. Hotter
and Parohen, trustees all the time, acting
for the benefit of the whole, and not for
themselves, we're owners of stock in the old
corporation, and elected to come in mem
bership in the new corporation, they may
do SO, taking n share for two; and more
over, they receive as members of the syn
dictate, their proportion of the $50, 900
shares taken by them on payment of sixty
cents per share: and this privilege il denied
to every other member of the old company
save those who are members of
the syndicate. Can u things properly
lie? Who authorized the trustees, or
fix upon $160,0O hs the real value of the
entire property of the West Granite COM
pany, and for which 1t was to be sold? Can
the mere force of numbers work this result
RS against the objections of a single dis
senting stockholder? Are the rights of the
majority to be thus subjected to the power
of a mere majority, or of a greater major
ity? If the ~dissentiates had numbered one
less only than the majority, still the con
tention must be that the majority, because
q mere majority, must prevail.
MIR. Coquard, at the time of this trans
action, was the actual owner of SO many
Thousand shares of stock in the West Gran
lite company. What has become of these,
his shares Of stock? Are they still exist
ent? If so, they represent absolutely moth
and description has been sold to the
trustee for the syndicate, by him. the
trustee. conveyed to the syndicate, and BY
the syndicate distributed among them
solves, and the money received has been-is
being-applied to the development of the
property which they themselves 80 acquire.'
Hon. w. W. Dixon and Massena Billiard,
who represent the West Granite company
and the other defendants, say the issues
raised by Coquard are as follows: THAT 1t
is a proposition that a corporation has no
power to sell or dispose of all it's property
to pay it's debts or for any other purpose
unless all of its stockholders consent to
such sale or disposition; second, that the
proposition Of fact that in this case fraud
or collusion Of such character as to avoid
the sale OF the property is sufficiently al
legged and shown"
Among the points they make in reply are
these: "lhe transaction by which the
West Granite parted with its property was
not strictly a sale. 1t was a disposition of
the property which WAS considered to be
for tho best interests of the company, and
was authorized by the statute. The sale
wns made, not by authority of the trustees,
but by authority of the stockholders.
The plaintiff AYERS that he was willing
for the West Granite company to sell it's
property to pay its debts, but was only in
favor of selling for cash, and 80 voted, and
believed this was the only legal way to sell.
Plaintiffs objection, therefore. at hat time,
was not to the regularity of the meeting or
to any fraud in the proceedings. but only
to the manner of exercising the power Of
sale, the plan that was adopted not being
legal in his opinion
No decision has been given as yet on the
questions raised.
Data for Equalization.
The state board of equalization has sent
out to all county assessors a circular letter