Akron daily Democrat. [volume] (Akron, Ohio) 1892-1902, 1900-02-27
THIS SUIT OVER COKE
Another Action Was Brought
Against Andrew Carnegie.
CHARGES OF FRAUD ARE ALLEGED.
Cause Of the Proceedings Was tho Fam
GUS Low Price Contract Filed by -Four
H. G. Frick Company ystockholders--Mr.

PITTsBuRG, Feb. 27.--TheSuit to break
the contract existing between the H. @.
Frick Coke company and the Carnegie
Steel company was filed by Attorneys
d. T. Watson, Willis f. McCook and
Johns McCleave, in common pleas court
No. Q.
The plaintiffs named in the bill are
John Walker, John Walker as guardian
OF Andrew Carnegie Wilson, S. L..
Schoonnaker and John Pontefract. The
defendants were the H. G. Frick Coke
company, tho individual members of the
board Of directors and the Carnegie
Steel company, limited.
1t is alleged that the Carnegie Steel
company requires about $500. .000 tons of
coke annually which is manufactured by
the Frlck company. That the Carnegie
Steel company is the holder and owner OF
81, l0f shares of the stock, OF which An
drew Carnegie owns 51,2l3 shares.
Some time In the ycar 1899 the steel
company and Carnegie set up the pretense
that the coke company had contracted TO sell it
coke at sl.s5 ton and after tlijs camo to the
knowledge OF the president Of tho coke com
pany he submitted it for the consideration of
the board Of directors held In October 1899.
Thcrcupon the board passed resolution in
structing tho president to notify the steel
company that the existence Of any such con.
truct was denied.
The bill then recites that previous to Jan. 0,
1900, the board Of directors Of tho coke com
pany was composed Of five nlombcrH, but upon
said date, at meeting Of the stockholders, tho
membership was increased to soyen, md Thos.
Lynck, H. G. Frick, George Lauder, James
Gnyley, A. NJ, Moreland, D. M. Clemson and
Thonins Morrison now compose the board.
That Gayley, Moreland, Clemson or Morrison
were not stockholders or owners of any shares
OF stock of the coke company, and were inter-
ested only by virtue Of owning several inter
est in tho Carnegie Steel company, but that
upon sGid date the steel company transferred
five shares of the coke company's stock to each
Of these four defendants. That, notwithstand.
ing such transfers, the snid shares still remain
In truth the property OF the steel company and
were made only for qualifying the defendants
TO hold tho office Of directors.
Yet tho snid four defendants were placed on
the board Of tho cokc company by tho Carnegie
company to subject the acts and management
OF the coke company to the will and interests Of
the Carnegie Steel company and Andrew Car
negie.
The price Of coke increased until It went to
upwards Of SO ton, On Jan. "a, 1900, a ma.
jority OF said board, pretending that more
than year previous thereto the Coke com.
pany had contracted to sell to the steel com
pany all the coke that the steel company might
require for its furnaces for period of five
years, beginning Jan. l. 1892 at the price OF
sl35 per ton, voted to the Carnegie Steel com
pnny limited n contract for nll the coke said
steel company would use in its furnaces for
five years, commencing Jan. /, 1899, amount.
ing, approximately, to 100000 tons per year
or about one.third Of the entire product oi
said H. o. Frick Coke company, Mt the price of
$l8h per ton; the persons named produced at
said meeting and demanded and procured the
Hate uia 49, ,pnt iph 1,o1
been previously prepared and executed by the
Carnegie Steel company, Limited.
The plaintiffs allege that no agreement to
sell its products to the steel company, as is
pretended az tho excuse for making the said
contract, and no agreement for delivery
throughH period of years at the price named
was at any time made, and the prctense thereof
Is only the creation Of the above named -four
| directors with Carnegie and Lawder, acting in
| the interest Of Carnegie and the steel company
| for the purpose OF putting forth some excuse
| TO cheat and defrnud all the stockholders othei
| than the members of the steel company, and
acted as representative of Carnegie and the
steel company, and not honestly and in good
/ faith for thu coke company They were guilty
not only Of constructive but also Of actua
| fraud.
| 1t is further alleged that the said contract q
! carried out will require II. q. Frick Coke com
| pany to refund to the steel company abou
S506,0O0 on account Of coke sold to said stce
company during the year 1890 and paid for ant
| this, Notwithstanding the fact known to the sait
| defendants, that tho said sums OF money so re
quired to he refunded to the steel compan,
have already been paid out and distributed b,
tho coke company as dividends to the stock
| holders.
| That for the year 1909, IL the pretended con
| tract is carried out 1t will result in loss Il
the coke company OF not less than si,o0o,O0O.
A preliminary injunction, to be made
permanent, is asked.