New-York tribune., 1891-10-16
WHAT WILL JOHN HOEY Dor
NO SIGN OF HIS LINE OF Defence.
SAYING THAT HE WAS DISQUALIFIED FROM
OFFICIAL ACTION As He HAD SOLD


There may be many interesting questions raised when
Che Adams Express Company carries into court its
claims against John Hoey and C1app spooner. the
officers deposcd last Monday on charges Of malfeas
ance There is no sign the part Of Mr.. IIoey and
his frfeEds to what line OF defence will be followed
by them and perhaps that rctcence may be advisable
The line Of attack that will be followed by :he man
ayers OF the Adams Express Company will be indicated
in few days. hut all that is known Of It rests upon
the Sheburne suit which has been heretofore described
The situation is complicated by the discovery that John
Hoey. according 10 the assertion OF Frederick LoveiOy
the new vlcepresdcnt sold out all his stock in the
company previous his entering into the deal for the
acquisition of the Boston Dispatch and the other eN
press lines that turned in 10 the Adams Company
at cost Of SS5o,OOO, OF which 100000 represented
profits 10 the sellers.
The point has been raised that Mr. Hoey dsqual
fed himself to act a. an officer in conducting this deal
when he sold out all his stock. 1t is a law OF the
state that directors in corporations must be stock
holders, and there is doubt that Mr. Hoey dsqual
fed himself when he parted with his last share OF
stock. A prominent lawyer, who may be called into
the case said yesterday not follow that the
acts Of an officer or director are invalid because he has
disqualified himself TO act in that capacity. The latest
decisions Of the courts hold that long as an officer
has the semblance Of authority the corporation cannot
be estopped from the consequences Of his acts. 30
Mr.. Hoey even while acting president when he had
legal authority. committed valid acts in buying sup
plies lending money, making contracts and otherwise
performing the regular duties Of his Office. But the
purchase Of rival collateral express lines is not an
ordinary transaction; it is extraordinary episode
and it therefore is possible that in this particular IN
stance the transaction may be vtated By the act oi
Mr.. Hoey in disqualifying himself from Office by the
sale of all his stock In any event, would seem that
the company had ground for action to recover
the sums Of which il claims it was defIauded
Criticism * heard iu Wall street negligence
Of the managers Of the Adams Express Company in
approving the purchase arranged by Oey and spooner
without closer Investigation. There may be no ground
for action by stockholders against the who have
turned the head officers Of the company. but sur
Prise is expressed that deal could through which
rests upon the facts as alleged by Henry sanford
and his friends that the Adams Company purchased
property actually worth only $4,000 for S75Oooo.
The aston>hment is Increased wien it found that
none Of the managers or directors knew that their
president had parted with al his stock. The courts
have been lenicnt, however. to directors Who have
acted in good faith even when their indifference or
Ignorance has resulted in severe losses to Stock
holders.
There no meeting Of the board Of managers OF the
Adams Express Company yesterday. The new officers
and the committee Of investigation hard at work
all DAY examining the records TO discover whether new
losses might exist and preparing material for tho suits
10 be Instituted against Messrs. Hoey and spoOner.
THE officers inaccessible, and in response TO an
appeal by note PRESIDENT SANFORD DeII out "ou -
Mr.. Sanford bess to be excused has very little to
saw except that steps viii be taken against Mr. H0ey
and Mr. Spooner by the managers 10 recover te MIS-
/ ing property Mr. sanford made 10 response to a
question to Mr. Hoey's sale Of stock. but subse-
quenty Vice President Loveoy authorized the state
ment that Mr.. HOey had sold ont all his Adams stock
prior to the deal with the New England companies, ana
that Mr. spooner had reduced his stock to an nscnh
cant amount