The evening times., 1898-11-29
The Legality of Stockholders
Agreement Questioned.
VIEWS OF An ATTORNEY
Says Attempt to Corral Stock Will
PrOEe a Failure.
Opinion of "a Prominent Broker.
Easy 20 Put the Price OF
Shares Down.

" Washington business men are still very
fnuch Interested in the effort that Presi-
dent Norris. Of the United States Elec-
tric Light Company, is making to corner
a majority " the stock of the company.
1T is kncRrI that very active canvass
has been made by him and Others and
that he has met with some success,
though n is not known that he has as
vet secured a majority Of the stock.
1t is stated by people who have signed
Mr.. Norris agreement that the price for
which II is promised that the stock shall
be held IL SIZE share. The alleged rea-
son FOR this agreement is that an intend
ing buyer for the company is supposed to
be making efforts TO get the stock AT the
present price. Another reason for this
hard work among the stockholders, is
alleged 10 be the desire Of the present
officenoiders Of the company TO keep
themselves undisturbed in office.
The views Of a prominent lawyer of the
city on Ihe legality Of this agreement is
most interesting at this time He said
yesterday in discussing the matter:
THE effort being made 10y the majority
4liAE4tHAea III LlltN CidlGS E4ttAilt
Lighting Company. to control its stock
for the-neXt twelve months is interesting
and curious. 1t is reported thai proxies
have been procured representing the ma
lority Of shares, and pursuant to con-
tract which provides that no sale shall
b. had except at sl75 per share for con-
siderable period to come. The engineers
Of this movement seem to have entered
into it wiki a blind confidence that they
had perfect right to do what they are
undertaking. and that their steps would
prove effective. venture to say that be-
fore they are through. they will find that
their so-called contract is void, and the
giving Of proxies under ii is a matter of
no considerable consequence.
Their effort is not a new one. Before
now stockholders and directors have
sought to bind up the stock of a corpora
tion so that il could not be freely bought
and sold and that they might be able TO
retain unusual advantages but whenever
il has been attempted the courts have
declared the attempt illegal. The reason
is not far to seek. Such contracts as Mr..
Norris has persuaded his fellow-stockhold-
ers TO enter into have been declared in
restraint Of trade and therefore void, and
The courts nave refused 10 EIIDItt ll4S
contracts and refused to assess damages
in case such contracts were broken. The
courts have considered that NOW. .thstand-
ing The statement of nominal cons.dera-
tion il was their duty to examine and see
81 there was a real consideration back Of
the contract and finding none, they have
considered them rs waste paper. IN the
present instance there is no consideration
for a contract beyond the desire of Mr..
HS to FllFs RfT d
themselves in power but this, however
gratifying 10 them, can hardly be said
To constitute valid consideration IN law.
The decisions referred to are quite in
line with the holdings Of The courts as tc
other contracts in restraint Of trade
II has only been within the narroWest
poss!blo limits that any court has ever
sustained such a contract, but the con-
tract of Mir. Norris is entirely beyond
such limits ] venture TO say that when
nut TO the test this whole attempt tc
corral the stock Of the Lighting Com
pany will prove an abject failure, and
only bring confusion upon lis orisinators.
Another comment that Is being made
regarding this agreement and the outside
people who are supposed TO be buying iha
stock is that it would be very lsy fl
these outsiders TO put the price Of Elec-
tric Light down $50 or so a share and
If they wished Mr. Mearns and Mr..
Hieston, who were recently elzcted difec-
tors in the company, already control
more than 1000 shares of the stock. They
are popularity supposed to be the rep-e-
sentatires Of the New York or p iladel-
phia capitalists who wish to obtain con
troll.
A prominent broker said yesterday re-
garding the operations of these gent e
men:
Mr. Mearns and Mr.. Hieston may at
any time sell thousand shares of Elec
tric Light. There is a very large amount
Of the stock held by the banks az collat-
eral for loans. Ninety dollars a share
was lent on it. If a thousand share
should come out at this time it wou d
send the price down until the banks wer
forced TO dispose of their holdings. Their
Mr. Mearns and Mr.. Hieston could Father
1t in. The price they would ray would
not be Sl75 or $l20 but considerably less.
] believe they could secure 400 mo;e
shares in this way"