The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1901-04-09

are brought before a judicial tribunal.
Justice Dixon says the judgment Of those
on whom the duty Of determining the value
* placed must be- accorded considerable
weight. but il is not final.
Nor Is II necessary. the opinion says.
that conscious generalization or any oth-
or form OF fraudulent conduct on the part
OF these primary values should be shown
10 Justify judicial interposition- Their
honest Judgment. II reached without exam
nation into the elements OF value, or II
used in part upon an estimate Of mat ers
which really are not properly or II plainly
warped by self interest. may lead 10 vio-
lation OF the statutory rule as surely as
would corrupt motive The original issue
of corporate stock Is special junction.
in the exercise Of which the Legislature
has fixed the standard TO be observed. and
II is the duty OF the courts, so far as their
Jurisdiction extends, To see that this stand
ard is not violated either Intentionally or
Internationally.
Justice Dixon points out that under Sec
ton 81. when corporate stock has once
been issued for property purchased. the
Legislature has directed the application OF
another rule. Under such conditions moth
frg but actual fraud IN the transactions
can impair the right Of the stakeholder 90
hold his stock as full paid stock free from
further call Applying the rule as above
laid down. Justice Dixon discusses the
actual value OF the property, the purchase
Of which is contemplated by the issue
OF 81 000. 600 OF stock. He finds II admitted
that the value OF the Guggenheim plant
as physical possessions cid not exceed So
OOoO00 and with the cash TO have been
turned ever. leaving about S23.90.000 10 be
made up in the value Of the good will of
the business and leases and contracts the
nature of which was not at any time dis
closed in the proceedings.
While the defendants claimed the COM
painants had not borne the burden OF proof
cast upon them. Justice Dixon holds that
under the circuns t3nceS tnis rule should
not be vigorously enforced at this stage.
The proofs Justice Dixon says, point
strongly 10 the conclusion that in the nego-
tons between the parties the real value
OF the property TO be acquired had not
been the basis upon which they have de-
termined the amount OF stock To be issued
therefor
The fact that the expected consumma-
ton of the deal caused the. market value
of the stock 10 rise and which was
purchase would not be advantageous to
the stockholders Justice .~ixon finds TO be
without weight. He says that If the in
frinsic value of the stock was only 60 per
cent of its face and an outsider onered
81 Der cent I'm money for additional stock
to re issued. such offer would clearly
be advantageous 10 the company and its
stockholders. but il could not legally be
accepted because tie Legislator mas re-
uured that 100 per cent. whether IN cash or
I'm property shall be received for cooperate
stock.
The court finds that the mere fact that
two thirds OF the directors and stock
holders voted for the purchase cannot pre-
vent review, pointing out that this would
not Justify an issue of stock Tor an llleSi-
mate enterprise. In accordance with these
views the court orders that the stay be
continued enjoining the purchase, and that
proceedings 70 increase the stock should
likewise remain in statue quo pending
of Chancery rs 70 the real value of the
Guggenhcim property.