The Marble times and Crystal silver lance., 1901-02-15
Minority Stockholders.

D~~O
tracing attention among investors.
There have been several instances In
! this state of late where the smaller
holder of shares has not received the
hest of treatment at the hands of the
more powerful majority, and this has
called forth number of correspond
ences which have been directed to this
departments. In answer to them, the
general proposition may be laid down
that there is no state in the Union
where the mining laws are so copious
or of such wide spread adaptabillty to
the needs of the carrying out OF the
industry as in Colorado; for the rea-
son, barrying California. mining has
been carried on in this state longer
and more extensively than in any
other state end consequently there
have been more points of law to deter
| mine, more cases to settle. The right
of miner, mine operator and stock
holder are well looked after, and yet
in spite of law, there will be infractions
made. This has been the case and
many investors are previously agitat-
ed as to whether they are entering a
dark alley with a footpad at the other
end of it, when they plunge in mining
stocks. Hardly so, as a number of
GRITTY give strongest proof. The in
fraction had to be committed before
correction could be applied. and since
there have risen cases where rights
have been trespassed upon, the Eastern
and other investor need not be alarm
ed lest there is no remedy. A we'll
known and entirely reliable writer on
mining and mining laws has written
the following upon the question of the
rights of minority stockholders
A corporation in one sense is an
aggregation of co-owners. In law one
co-owner cannot take advantage of
another co-owner in anything that per-
tains to the common property to the
detriment of the other, generally speak
ing. That is, on a piece of land one
co-owner could not allow it to be sold
| for taxes, buy it in and thus acquire
the title to another co-owner's interest.
In corporation the officers and di-
rectors act in a tiduciary capacity.
They represent not their own interests
alone but that of every person owning
stock in the corporation. The writer
has in mind corporation in which a
director, holding the proxies of a ma
jority of the stock, voted large bond.
ed indebtedness upon the company s
property, secured it by mortgage, ex-
pended the greater portion of the bonds
in paying himself a large salary, did
no work upon the mines of the com
pany that required the expenditure oi
money, absorbed the royalties for per
sonal expenses, had the mortgage Sc.
curing the bonded indebtedness fore.
closed, hired an attorney to represent
the corporation in the foreclosure pro.
ceedings, kept the minutes at the di.
rectors meeting which directed the at
torney to make no defense, attended
the sale, bought the property in fo1
his private use and would have used
the proxies of the stockholders to
ratify the whole proceedings -especi-
ally the sale under the foreclosure, al
which he was the purchaser, but for
the fact that proceeding were instituted
in court to set aside the proceedings
divesting the company of its property
by some of the stockholders, before
the full scheme was consumm ated.
Certainly such schemes are the basest
of frauds. Highway robbery is honor
able in comparison, still they are OF
frequent occurrence, and Colorado,
with its many opportunities, is a good
| field for unscrupulous schemers. A
few examples will have q salutary
! effect.
There are number of cases pending
in the state courts based upon fradu.
lent transactions of the officials Of
corporations who have endeavored tC
defraud minority stockholders, gener.
ally by absorbing the property and
securing absolute ownership in them.
selves. The late decision of the state
supreme court in the Wolftone Min
ing company case is the forerunner
of what is in store for others who have
let their cupidity lead them into for
bidden paths. The court says: ''The
directors of corporations are trustees
and agents of shareholders and of cor
poration, and the same rules are ap-
piled to contracts of corporations as
are applied TO the dealings of other
parties holding fiduciary relation to
each other" When it is generally
understood that the rights of all stock
holders in the corporation be they in